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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box
|_| Preliminary Proxy Statement
|X| Definitive Proxy Statement
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MILESTONE SCIENTIFIC INC.
------------------------------------------------
(Name of Registrant as Specified in its Charter)
--------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a(6)(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total Fee Paid:
________________________________________________________________________________
|_| Fee paid previously with preliminary materials
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount previously paid:___________________________________________________
2) Form, Schedule or Registration Statement No.______________________________
3) Filing party:_____________________________________________________________
4) Date Filed:_______________________________________________________________
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<PAGE>
MILESTONE SCIENTIFIC INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON TUESDAY, JUNE 30, 1998
------------------
The Annual Meeting of Stockholders of Milestone Scientific Inc. will be
held in the Board Room of the American Stock Exchange, 86 Trinity Place, New
York, New York, on Tuesday, June 30, 1998 at 8:00 a.m., Eastern Daylight Savings
Time, for the purpose of considering and acting upon the following:
1. Election of eleven (11) Directors.
2. Approval of an amendment to the Company's Stock Option Plan
increasing the number of shares of the Company's Common Stock which may be
issued thereunder from 500,000 to 1,000,000 shares.
3. Confirmation of the appointment of Grant Thornton LLP as auditors
for the fiscal year ending December 31, 1998.
4. Any and all matters incident to the foregoing, and such other
business as may legally come before the meeting and any adjournments or
postponements thereof.
The Board of Directors has fixed the close of business on June 1, 1998 as
the record date for determining the stockholders having the right to notice of
and to vote at the meeting.
By order of the Board of Directors
LEONARD OSSER
Chairman of the Board
Livingston, New Jersey
June 5, 1998
- --------------------------------------------------------------------------------
IMPORTANT: Every stockholder, whether or not he or she expects to attend the
annual meeting in person, is urged to execute the proxy and
return it promptly in the enclosed business reply envelope.
We shall appreciate your giving this matter your prompt
attention.
<PAGE>
MILESTONE SCIENTIFIC INC.
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PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 30, 1998
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Proxies in the form enclosed with this Statement are solicited by Milestone
Scientific Inc. ("Milestone" or the "Company") to be used at the Annual Meeting
of Stockholders to be held in the Board Room of the American Stock Exchange, 86
Trinity Place, New York City, on June 30, 1998 at 8:00 a.m., Eastern Daylight
Savings Time, for the purposes set forth in the Notice of Meeting and this Proxy
Statement. Milestone's principal executive offices are located at 220 South
Orange Avenue, Livingston Corporate Park, Livingston, New Jersey 07039. The
approximate date on which this Statement and the accompanying proxy will be
mailed to Stockholders is June 5, 1998.
THE VOTING AND VOTE REQUIRED
On the record date for the meeting, June 1, 1998, there were outstanding
8,809,182 shares of Common Stock of the Company (the "Common Stock"), each of
which will be entitled to one vote.
Directors are elected by a plurality of the votes cast at the meeting.
Confirmation of the appointment of auditors and approval of the amendment to the
Stock Option Plan (the "Plan") is by the affirmative vote of a majority of the
votes cast at the meeting.
All shares represented by valid proxies will be voted in accordance with
the instructions contained therein. In the absence of instructions, proxies will
be voted FOR each of the stated matters being voted on at the meeting. A proxy
may be revoked by the stockholder giving the proxy at any time before it is
voted, either by oral or written notice, and a prior proxy is automatically
revoked by a stockholder giving a subsequent proxy or attending and voting at
the meeting. Attendance at the meeting, however, in and of itself does not
revoke a prior proxy. In the case of the election of directors, shares
represented by a proxy which are marked "WITHHOLD AUTHORITY" to vote for all
eleven nominees will not be counted in determining whether a plurality vote has
been received for the election of directors. Shares represented by proxies which
are marked "ABSTAIN" on any other proposal will not be counted in determining
whether the requisite vote has been received for such proposal. In instances
where brokers are prohibited from exercising discretionary authority for
beneficial owners who have not returned proxies ("broker non-votes"), those
shares will not be included in the vote totals and, therefore, will have no
effect on the outcome of the vote.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table shows certain information with respect to beneficial
ownership of the Company's Common Stock on April 30, 1998 by all persons known
to be the beneficial owners of more than 5% of its outstanding shares, and by
all Directors and Officers of the Company, as a group:
SHARES
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED % OF CLASS
- ------------------------ ------------------ ----------
Leonard Osser ............................ 1,845,000(1) 20.98%
c/o Milestone Scientific Inc.
220 South Orange Avenue
Livingston Corporate Park
Livingston, NJ 07039
Gintel Asset Management, Inc. ............ 946,600 10.76%
6 Greenwich Office Park
Greenwich, CT 06831
Parker Quillen, Inc. ..................... 577,966 6.57%
c/o Milestone Scientific Inc.
220 South Orange Avenue
Livingston Corporate Park
Livingston, NJ 07039
All Directors and Officers as a
group (12 persons) ...................... 2,714,733(2) 29.2%
- ----------
(1) Consists of 1,336,500 held in the name of Leonard Osser, 500,000 shares
held in the name of U.S. Asian Consulting Group, Inc., an affiliate of Mr.
Osser, and 9,000 shares held by Guarantee and Trust Company for the benefit
of U.S. Asian Consulting Group, Inc. Profit Sharing Plan.
(2) Includes 211,998 shares subject to stock options and 291,963 shares subject
to warrants all of which are exercisable within sixty (60) days of the date
hereof.
2
<PAGE>
ELECTION OF DIRECTORS
Eleven directors are to be elected at the Annual Meeting each for a term of
one year and until the election and qualification of a successor.
It is intended that votes pursuant to the enclosed proxy will be cast for
the election of the eleven nominees named below. In the event that any such
nominee should become unable or unwilling to serve as a Director, the Proxy will
be voted for the election of such person, if any, as shall be designated by the
Board of Directors (the "Board"). Management has no reason to believe these
nominees will not be available for election.
The nominees for election and certain information about them are shown in
the following table:
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT
OWNED ON OF
NOMINEES FOR ELECTION APRIL 30, 1998(1) CLASS
- --------------------- ----------------- -------
<S> <C> <C>
LEONARD OSSER, 50, has been President, Chief Executive
Officer and a director of the Company since July 1991. From
such date until July 1997, he also served as the Chief
Financial Officer of the Company. From 1980 until the
consummation of the Company's public offering in November
1995, he had been primarily engaged as the principal owner
and Chief Executive of U.S. Asian Consulting Group, Inc., a
New Jersey based provider of consulting services in
"work-out" and "turnaround" situations for publicly and
privately owned companies in financial difficulty .......... 1,845,000(2) 20.98%
DANIEL R. MARTIN, 60, has been President, Chief Operating
Officer and a director of the Company since March 1998. From
January 1990 to October 31, 1997, Mr. Martin was the
President, Chief Operating Officer and director, and later
Chief Executive Officer of E-Z-EM, Inc., a manufacturer of
medical devices and pharmaceuticals for diagnostic imaging . 100 *
GREGORY VOLOK, 48, has been Executive Vice-President, Chief
Operating Officer and a director of the Company since
December 1996. He initially joined the Company in March 1996
as the President of Princeton PMC, Inc., a wholly-owned
subsidiary of the Company. For more than ten years prior
thereto, Mr. Volok served in various sales and marketing
executive positions of increasing responsibility with
Dentsply International, Inc. (the world's largest
distributor of dental supplies and equipment), including
serving as the executive responsible for launching its caulk
endodontics line and the executive responsible for domestic
sales of its Cavitron Division ............................. 183,266(3) *
MICHAEL J. MCGEEHAN, 30, has been a Vice-President of the
Company since January 1997 and a director of the Company
since June 1995. From July 1994 through March 1997, he was
the Managing Director of Forefront Information Strategies, a
New Jersey based company specializing in business process
re-engineering and the design and implementation of computer
database systems. In addition, from August 1994 to January
1995, he was a manager for American International Group, a
world-wide property and casualty insurer, where he managed a
staff of 12 database administrators. From January 1991
through July 1994, he held positions with Microsoft
Corporation, first as a database specialist and network
systems engineer and then as a product manager for Microsoft
Access ..................................................... 30,506(4) *
GIOVANNI MONTONCELLO, 51, has been a director of the Company
since June 1995. He has been self-employed as an Interior
Designer in Milan, Italy for more than five years. He has
also served during such period as a part-time instructor in
interior design at the G. Cova Art School in Milan, Italy .. 17,611(5) 2.67%
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT
OWNED ON OF
NOMINEES FOR ELECTION APRIL 30, 1998(1) CLASS
- --------------------- ----------------- -------
<S> <C> <C>
DAVID SULTANIK, 41, has been a director of the Company since
January 1996. He has been the managing/administrative
partner of the Certified Public Accounting firm Sultanik and
Krumholz, LLC since June 1994. For more than five years
prior to that he was a principal at the accounting firm
Perelson, Johnson & Rones, P.C. ............................ 20,000(6) *
STEPHEN A. ZELNICK, 60, has been a director of the Company
since January 1996. He has been a partner in the law firm
Morse, Zelnick, Rose & Lander, LLP since its inception in
August 1995. For more than five years prior to that he was
of counsel to the law firm Dreyer and Traub, LLP ........... 401,000(7) 4.40%*
PAUL GREGORY, 63, has been a director of the Company since
April 1997. Mr. Gregory has been a business and insurance
consultant at Innovative Programs Associates Inc. and Paul
Gregory Associates Inc. since January 1995 and January 1986,
respectively, where he services, among other entities,
foreign and domestic insurance groups, law and accounting
firms and international corporations ....................... 20,150(8) *
LOUIS I. MARGOLIS, 54, has been a director of the Company
since April 1997. Mr. Margolis has been a General Partner of
Pine Street Associates, L.P., a private investment
partnership that invests in other private limited
partnerships, since January 1994. In January 1997, Mr.
Margolis formed and is the President and sole shareholder of
Chapel Hill Capital Corp., a financial services company.
From 1991 through 1993 he was a Member of the Management
Committee of Nomura Securities International. From 1993
through 1995 he was Chairman of Classic Capital Inc., a
registered investment advisor. Mr. Margolis has been a
member of the Financial Products Advisory Committee of the
Commodity Futures Trading Commission since its formation in
1986, a Trustee of the Futures Industry Institute since 1991
and a Trustee of Saint Barnabas Hospital in Livingston, NJ
since 1994 ................................................. 84,000(9) *
LEONARD M. SCHILLER, 56, has been a director of the Company
since April 1997. Mr. Schiller has been a partner in the law
firm of Schiller, Klein & McElroy, P.C. since 1977. He is
also President of The Dearborn Group, a residential property
management and real estate acquisition company. Mr. Schiller
is a member of the Board of Directors of AccuMed
International, Inc., a laboratory diagnostic company ....... 70,594(10) *
LARRY HAIMOVITCH, 52, has been a director of the Company
since October 1997. Mr. Haimovitch has been the President of
Haimovitch Medical Technology Consultants, a San
Francisco-based health care consulting firm, since he formed
the firm in 1990. His firm, whose current area of emphasis
includes minimally-invasive surgical technologies,
specializes in the analysis of the medical device industry
with emphasis on the current trends and future outlook for
emerging medical technology. Mr. Haimovitch also serves as a
director of Cardiac Control Systems, Inc. and
Electropharmacology, Inc., both medical device companies ... 17,356(11) *
</TABLE>
- -------
* Less than 1%
4
<PAGE>
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the filing of this report upon
the exercise of options and warrants or conversion of convertible
securities. Each beneficial owner's percentage ownership is determined by
assuming that options, warrants and convertible securities that are held by
such person (but not held by any other person) and that are exercisable or
convertible within 60 days from the filing of this report have been
exercised or converted. Except as otherwise indicated, and subject to
applicable community property and similar laws, each of the persons named
has sole voting and investment power with respect to the shares shown as
beneficially owned.
(2) Includes 500,000 held in the name of U.S. Asian Consulting Group, Inc., an
affiliate of Mr. Osser, and 9,000 shares held by Guarantee and Trust
Company for the benefit of U.S. Asian Consulting Group Profit Sharing Plan.
(3) Includes 16,666 shares subject to stock options, exercisable within 60 days
of the date hereof at $5.375 per share.
(4) Includes 600 shares held by Mr. McGeehan's wife, 20,000 shares subject to
stock options exercisable within 60 days of the date hereof at $5.375 per
share and 8,332 shares subject to stock options exercisable within 60 days
of the date hereof at $5.125 per share.
(5) Includes 10,000 shares subject to stock options exercisable within sixty
(60) days of the date hereof at $5.375per share.
(6) Includes 15,000 shares subject to stock options, exercisable within 60 days
of the date hereof at $5.375 per share.
(7) Includes (i) an aggregate of 70,000 shares issuable upon exercise of stock
options within 60 days of the date hereof, 50,000 of which are exercisable
at $5.125 per share and 20,000 of which are exercisable at $5.375 per
share, (ii) 55,000 shares held in the name of Cowen & Co. as Custodian for
the Stephen A. Zelnick Profit Sharing Trust ("Cowen & Co."), (iii) 18,000
shares beneficially owned through Erewhon Holdings Company, a partnership
in which Mr. Zelnick is a general partner ("Erewhon"), (iv) 50,000 shares
issuable upon exercise of warrants within 60 days of the date hereof held
in the name of Cowen & Co., (v) 18,000 shares issuable upon exercise of
warrants within 60 days of the date hereof beneficially owned through
Erewhon, (vi) 166,666 shares issuable upon exercise of immediately
exercisable warrants to purchase units comprised of 83,333 shares and
warrants to purchase an additional 83,333 shares registered in the name of
Morse, Zelnick, Rose & Lander, LLP, a limited liability partnership
("MZRL") in which Mr. Zelnick is a general partner. MZRL or partners in
MZRL share beneficial ownership in the securities listed in (i), (iii), (v)
and (vi), above.
(8) Includes 150 shares held by Mr. Gregory's wife and 17,000 shares subject to
stock options, exercisable within 60 days of the date hereof at $5.125 per
share.
(9) Includes 20,000 shares subject to stock options, exercisable within 60 days
of the date hereof at $5.125 per share and 32,000 shares subject to stock
purchase warrants, exercisable within 60 days of the date hereof at
$9.00per share.
(10) Includes 45,000 shares subject to stock options, exercisable within 60 days
of the date hereof at $5.125 per share and 5,297 shares subject to stock
purchase warrants, exercisable within 60 days of the date hereof at $4.72
per share.
(11) Includes 10,000 shares subject to stock options, exercisable within 60 days
of the date hereof at $6.875 per share.
5
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
THE BOARD HELD SEVEN MEETINGS, THE AUDIT COMMITTEE ONE MEETING, AND THE
COMPENSATION COMMITTEE ONE MEETING DURING FISCAL 1997. The Audit Committee is
comprised of Messrs. Margolis, Schiller and Sultanik. The Compensation Committee
is comprised of Messrs. Margolis, Sultanik and Zelnick. There is no nominating
committee. All directors attended more than 75% of the aggregate number of
meetings of the Board and its committees, except for Giovanni Montoncello and
Paul Gregory.
The Compensation Committee reviews and recommends to the Board the
compensation and benefits of all officers of the Company, reviews general policy
matters relating to compensation and benefits of employees of the Company, and
administers the issuance of stock options to the Company's officers, employees,
directors and consultants. The Company has agreed with the placement agent in
its March 1997 private placement financing that until March 13, 2000, all
compensation arrangements between the Company and its directors, officers and
affiliates shall be reviewed by a compensation committee, the majority of which
is made up of independent directors. The Audit Committee meets with management
and the Company's independent auditors to determine the adequacy of internal
controls and other financial reporting matters.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES.
COMPENSATION OF DIRECTORS AND OFFICERS
AND RELATED MATTERS
EXECUTIVE COMPENSATION.
The following Summary Compensation Table sets forth all compensation
earned, in all capacities, during the fiscal years ended December 31, 1997, 1996
and 1995 by (i) the Company's Chief Executive Officer and (ii) the most highly
compensated executive officers, other than the CEO, who were serving as
executive officers at the end of the 1997 fiscal year and whose salary as
determined by Regulation S-B, Item 402, exceeded $100,000 (the individuals
falling within categories (i) and (ii) are collectively referred to as the
"Named Executives").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL ------------------------------------
COMPENSATION AWARDS PAYOUTS
------------ ------------------ ------------
COMMON STOCK ALL OTHER
NAME AND SALARY UNDERLYING OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) (#) ($)
- ------------------ ---- ----------- ------------------ ------------
<S> <C> <C> <C> <C>
Leonard A. Osser .......................... 1997 267,768(1) 150,000
President and CFO 1996 265,719(1)
1995 35,257(1)
Gregory Volok(2) .......................... 1997 120,000 50,000 2,126,670(2)
Executive Vice President 1996 20,000
Joel Warady ............................... 1997 105,000
President of Wisdom 1996 2,019
</TABLE>
- ----------
(1) Does not include $41,538 in 1997, $56,514 in 1996 and 4, 600 in 1995 paid
by the Company to Marilyn Elson and $6,250 in1995 paid to Sultanik and
Krumholz, LLC, certified public accountants, for accounting services. Ms.
Elson, a certified public accountant, is the wife of Leonard A. Osser and
was a partner in Sultanik and Krumholz, LLC, during 1995.
(2) In December 1997, pursuant to an Agreement and Plan of Reorganization, the
Company completed payment for the acquisition of the minority interest in
Princeton PMC by issuing to Mr. Volok 159,900 shares of Common Stock.
6
<PAGE>
STOCK OPTIONS
The following tables show certain information with respect to incentive and
non-qualified stock options granted in 1997 to Named Executives under the
Company's Stock Option Plan and the aggregate value at December 31, 1997 of such
options. The per share exercise price of all options is equal to the fair market
value of a share of Common Stock on the date of grant. No options granted to
Named Executives have been exercised.
<TABLE>
OPTION GRANTS IN 1997
INDIVIDUAL GRANTS OF OPTIONS
<CAPTION>
NUMBER OF PERCENT OF
SHARES OF TOTAL
COMMON OPTIONS
STOCK GRANTED TO EXERCISE
UNDERLYING EMPLOYEES PRICE EXPIRATION
NAME OPTION # IN 1997 ($/SH) DATE
---- ---------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Leonard A. Osser ................. 106,500(1) 27.40% $ 7.00 7/31/02
43,500(1) 11.18% $ 7.56 7/31/02
Gregory Volok .................... 50,000(2) 12.85% $5.375 4/1/02
</TABLE>
- ----------
(1) Options vest on August 1, 1998.
(2) Options vest in three equal annual installments beginning April 2l, 1997.
<TABLE>
AGGREGATED 1997 YEAR END OPTIONS VALUES
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT 12/31/97 AT 12/31/97 (1)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
Leonard A. Osser .................... 0/150,000 $0/$1,419,390
Gregory Volok ....................... 33,333/16,667 $374,996/$187,504
</TABLE>
- ----------
(1) Based on the closing price of $16.625 as quoted on the Nasdaq National
Market.
EMPLOYMENT CONTRACTS
As of January 1, 1998 the Company entered into an Employment Agreement with
Mr. Osser which provides for an initial term expiring on December 31, 2002, with
a two-year non-competition period at the end of the term. The term is
automatically increased for successive one-year periods unless prior to December
1 of any year either party notifies the other of its election not to extend the
term. Under the Agreement Mr. Osser serves as Chief Executive Officer and is
required to work on a full-time basis. Under the Employment Agreement Mr. Osser
receives annual base pay of $350,000, increasing to reflect cost of living
adjustments commencing on January 1, 2001. In addition, during January 1998 and
each of the next four Januarys, the Company shall grant Mr. Osser an option to
purchase 50,000 shares of Common Stock exercisable only during the last 30 days
of the option term unless the Company achieves certain financial goals to be
specified annually by the Compensation Committee. Additionally, as soon as
financial statements for each year commencing with 1998 are completed, the
Company shall grant the executive an additional option to purchase up to 50,000
shares depending upon the achievement of specified performance goals. Further,
Mr. Osser shall receive the opportunity to earn cash bonuses of up to $200,000
per year depending upon the achievement of performance targets to be specified
by the Compensation Committee.
In November 1996, the Company entered into a five-year employment agreement
with Gregory Volok, providing for his employment as Executive Vice-President.
The agreement provides for an annual base salary of $120,000 and an 18 month
non-competition period at the expiration of the term.
7
<PAGE>
In December 1996, the Company entered into an employment agreement with
Joel D. Warady providing for his employment as President and Chief Operating
Officer of Wisdom Toothbrush Co., a wholly-owned subsidiary of the Company
("Wisdom"), for a three-year term at an annual base salary of $105,000. If the
income before Federal income taxes of Wisdom meets certain levels in the years
1997, 1998, and 1999, Mr. Warady will receive stock bonuses of 5,000, 7,000 and
10,000 shares of Common Stock of the Company, respectively. The agreement also
provides for a non-competition period at the end of the term for six months or
one year, depending upon the reason the employment has terminated.
INFORMATION ABOUT EXECUTIVE OFFICERS WHO ARE NOT ALSO DIRECTOR NOMINEES
Joel Warady, a beneficial owner of 25,150 shares of Common Stock of the
Company, has been Vice-President of Milestone since January 1997 and President
of Wisdom for more than five years.
COMPENSATION OF DIRECTORS
Non-employee directors are granted, upon becoming a director, five-year
options to purchase 20,000 shares of Common Stock at an exercise price equal to
the fair market value of a share of Common Stock on the date of grant. They
receive no cash compensation.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From April 1995 until February 28, 1997, Spintech leased its corporate and
administrative offices from LenRon Realty, Inc. ("LenRon"), pursuant to a lease
expiring March 31, 2000. The premises consisted of 1,500 sq. ft. on the first
and second floors of a two-story frame building. According to the terms of the
lease, annual rentals were to increase from $12,600 in the first year to $28,000
in the year 2000 and Spintech was to pay increases in real estate taxes and
certain maintenance costs. Spintech leased additional warehouse and
manufacturing space from LenRon on a month-to-month basis at $1,000 per month.
Leonard Osser founded, is the President and since December 1996 the sole owner
of LenRon. On February 28, 1997, LenRon released Spintech from its continuing
obligations under the lease in anticipation of Spintech's relocation to the
Company's corporate headquarters in New Jersey.
In March 1996, the Company organized Princeton PMC to market and sell
dental products. Initially, Princeton PMC was a joint venture between the
Company and Gregory Volok. In December 1996, it became a wholly-owned subsidiary
when the Company acquired Mr. Volok's one-third interest in Princeton PMC in
exchange for 100 shares of Common Stock and an earnout of up to an additional
159,900 shares based on the Company's future earnings. At such time, Mr. Volok
became Executive Vice-President, Chief Operating Officer and a Director of
Milestone.
From January 1, 1994 through March 1997, Spintech rented from Ronald
Spinello, DDS, on a month-to-month basis, at the rate of $200 per month,
laboratory space located in his home.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors and greater than ten-percent stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the best of the Company's knowledge, based solely on review of the
copies of such forms furnished to the Company, or written representations that
no other forms were required, the Company believes that all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten percent
(10%) shareholders were complied with during 1997, except that Giovanni
Montoncello was late in filing his Form 5, which reported one transaction.
AMENDMENT TO THE STOCK OPTION PLAN
On May 5, 1998 the Board, subject to stockholder approval amended the Stock
Option Plan of the Company (the "Plan") to increase the number of shares of
common stock available which may be issued thereunder from 500,000 to 1,000,000
shares. The Board recommends that the stockholders approve the amendment to the
Plan. Stock options to purchase an aggregate of 62,000 shares of Common Stock
have been granted under the Plan to four executive officers, including the
Company's Chief Executive Officer, eight outside directors
8
<PAGE>
and one former director and two employees of the Company. Exercise of options
for shares in excess of 500,000 are conditioned upon stockholder approval of the
Amendment The exercise price of the options granted pursuant to the Plan must
equal or exceed the fair market value of a share of Common Stock on the date of
grant. On June 4, 1998, the closing price of the stock of the Company on the
American Stock Exchange was $10-1/2. In addition, the Company has granted
options, outside the plan, for 261,000 shares to 11 consultants, including two
directors. The exercise price of each of these options was at or greater than
fair market value on the date of grant.
The purpose of the Plan is to provide incentives to officers, key
employees, directors, independent contractors and agents whose performance will
contribute to the long-term success and growth of the Company, to strengthen the
ability of the Company to attract and retain officers, key employees, directors,
independent contractors and agents of high competence, to increase the identity
of interests of such people with those of the Company's stockholders and to help
build loyalty to the Company through recognition and the opportunity for stock
ownership. The Plan is administered by the Compensation Committee of the Board.
TERMS OF OPTIONS
The Plan permits the granting of both incentive stock options and
non-qualified stock options. Generally, the option price of both incentive stock
options and non-qualified stock options must be at least equal to 100% of the
fair market value of the shares on the date of grant. The maximum term of each
option is ten years. For any participant who owns shares possessing more than
10% of the voting rights of the Company's outstanding shares of Common Stock,
the exercise price of any incentive stock option must be at least equal to 110%
of the fair market value of the shares subject to such option on the date of
grant and the term of the option may not be longer than five years. Options
become exercisable at such time or times as the Board may determine at the time
it grants options.
FEDERAL INCOME TAX CONSEQUENCES
Non-qualified Stock Options. The grant of non-qualified stock options will
have no immediate tax consequences to the Company or the employee. The exercise
of a non-qualified stock option will require an employee to include in his gross
income the amount by which the fair market value of the acquired shares on the
exercise date (or the date on which any substantial risk of forfeiture lapses)
exceeds the option price.
Upon a subsequent sale or taxable exchange of the shares acquired upon
exercise of a non-qualified stock option, an employee will recognize long or
short-term capital gain or loss equal to the difference between the amount
realized on the sale and the tax basis of such shares.
The Company will be entitled (provided applicable withholding requirements
are met) to a deduction for Federal income tax purposes at the same time and in
the same amount as the employee is in receipt of income in connection with the
exercise of a non-qualified stock option.
Incentive Stock Options. The grant of an incentive stock option will have
no immediate tax consequences to the Company or the employee. If the employee
exercises an incentive stock option and does not dispose of the acquired shares
within two years after the grant of the incentive stock option nor within one
year after the date of the transfer of such shares to him (a "disqualifying
disposition"), he will realize no compensation income and any gain or loss that
he realizes on a subsequent disposition of such shares will be treated as a
long-term capital gain or loss. For purposes of calculating the employee's
alternative minimum taxable income, however, the option will be taxed as if it
were a non-qualified stock option.
ELIGIBILITY
Under the Plan, incentive stock options may be granted only to officers and
employees and non-qualified stock options may be granted to officers, employees
as well as directors, independent contractors and agents. The Company has no
present plans or understandings to grant any other Options under the Plan.
Persons eligible to receive options consist primarily of five (5) officers and
twelve (12) key employees.
The Company believes that the Amendment Plan should be approved so that
sufficient shares of Common Stock are available for grant to key employees,
officers and directors as well as independent contractors and agents upon whose
performance and contribution the long-term success and growth of the Company is
dependent.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
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CONFIRMATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board proposes that the stockholders ratify the appointment of Grant
Thornton LLP as the Company's independent accountants for 1998. Grant Thornton
LLP were the Company's independent accountants for 1997. The report of Grant
Thornton LLP with respect to the Company's financial statements appears in the
Company's Annual Report for the fiscal year ended December 31, 1997. A
representative of Grant Thornton LLP will be at the Annual Meeting of
Stockholders and will have an opportunity to make a statement if he desires to
do so and will be available to respond to appropriate questions. In the event
the stockholders fail to ratify the appointment, the Board will consider it a
directive to consider other accountants for a subsequent year.
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
MISCELLANEOUS
OTHER MATTERS
Management knows of no matter other than the foregoing to be brought before
the Annual Meeting of Stockholders, but if such other matters properly come
before the meeting, or any adjournment thereof, the persons named in the
accompanying form of proxy will vote such proxy on such matters in accordance
with their best judgment.
REPORTS AND FINANCIAL STATEMENTS
Milestone's Annual Report for the year ended December 31, 1997 including
Audited Financial Statements is included with this proxy material. Such Report
and Financial Statements contained therein are not incorporated herein by
reference and are not considered part of this soliciting material.
A copy of the Company's Annual Report on Form 10-KSB, without exhibits,
will be provided without charge to any stockholder submitting a written request.
Such request should be addressed to Thomas Stuckey, Chief Financial Officer,
Milestone Scientific Inc., 220 South Orange Avenue, Livingston Corporate Park,
Livingston, New Jersey 07039.
SOLICITATION OF PROXIES
The entire cost of the solicitation of proxies will be borne by Milestone.
Proxies may be solicited by directors, officers and regular employees of
Milestone, without extra compensation, by telephone, telegraph, mail or personal
interview. Solicitation is not to be made by specifically engaged employees or
paid solicitors. Milestone will also reimburse brokerage houses and other
custodians, nominees and fiduciaries for their reasonable expenses for sending
proxies and proxy material to the beneficial owners of its Common Stock.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1999 Annual
Meeting must be received by the Company for inclusion in the Company's proxy
statement relating to that meeting not later than March 1, 1999. Such proposals
should be addressed to Michael McGeehan, Vice President, Milestone Scientific
Inc., 220 South Orange Avenue, Livingston Corporate Park, Livingston, New Jersey
07039.
EVERY STOCKHOLDER, WHETHER OR NOT HE OR SHE EXPECTS TO ATTEND THE ANNUAL
MEETING IN PERSON, IS URGED TO EXECUTE THE PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED BUSINESS REPLY ENVELOPE.
By order of the Board of Directors
LEONARD OSSER
Chairman of the Board
Livingston, New Jersey
June 5, 1998
10
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MILESTONE SCIENTIFIC INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING
ON JUNE 30, 1998
The undersigned hereby appoints Leonard Osser, Daniel Martin and Michael J.
McGeehan and each of them, with full power of substitution, the attorneys and
proxies of the undersigned to attend the Annual Meeting of Shareholders of
Milestone Scientific Inc. to be held June 30, 1998 at 8:00 a.m., and at any
adjournment thereof, hereby revoking any proxies heretofore given, to vote all
shares of Common Stock of the Company held or owned by the undersigned as
indicated on the proposals as more fully set forth in the Proxy Statement, and
in their discretion upon such other matters as may come before the meeting.
1. ELECTION OF DIRECTORS--Leonard Osser, Daniel R. Martin, Gregory Volok,
Michael J. McGeehan, Giovanni Montoncello, David Sultanik, Stephen A.
Zelnick, Paul Gregory, Louis I. Margolis, Leonard M. Schiller and Larry
Haimovitch.
|_| FOR all nominees |_| WITHHOLD AUTHORITY to vote for all nominees FOR
all nominees, EXCEPT nominee(s) written below.
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2. The approval of an amendment to the Company's Stock Option Plan.
FOR |_| AGAINST |_| ABSTAIN |_|
3. Confirmation of the appointment of Grant Thornton LLP as auditors for the
fiscal year ending December 31, 1998
FOR |_| AGAINST |_| ABSTAIN |_|
(Continued, and to be signed, on Reverse Side)
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(Continued from previous page)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR IF NO
DIRECTION IS INDICATED, WILL BE VOTED FOR EACH OF THE PROPOSALS.
The undersigned hereby acknowledges receipt of the Notice of, and Proxy
Statement for, the aforesaid Annual Meeting.
DATED: ___________________________, 1998
________________________________________
(Signature of Stockholder)
________________________________________
(Signature of Stockholder)
DATE AND SIGN EXACTLY AS NAME APPEARS
HEREON, EACH JOINT TENANT MUST SIGN,
WHEN SIGNING AS ATTORNEY, EXECUTOR,
TRUSTEE, ETC., GIVE FULL TITLE. IF
SIGNER IS CORPORATION, SIGN IN FULL
CORPORATE NAME BY AUTHORIZED OFFICER.
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