<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
AMERICAN BIOMED, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2),
or Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to this controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid: not applicable
[ ] 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 Number:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
AMERICAN BIOMED, INC.
10077 GROGANS MILL ROAD, SUITE 100
THE WOODLANDS, TEXAS 77380
November 3, 1997
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders (the
"Annual Meeting") of American BioMed, Inc. (the "Company") to be held on
December 19, 1997 at 5:00 PM Eastern Standard time, at the offices of Klehr,
Harrison, Harvey, Branzburg & Ellers located at 1401 Walnut Street,
Philadelphia, Pennsylvania 19102.
At the Annual Meeting you will be asked to elect four directors of the Company.
In view of the importance of the actions to be taken at the Annual Meeting, you
are urged to read the accompanying Proxy Statement carefully, and regardless of
the number of shares you own, we request that you complete, sign, date and
return the enclosed proxy promptly in the accompanying prepaid envelope. You
may, of course, attend the Annual Meeting and vote in person, even if you have
previously returned your proxy. The Company's Board of Directors believes that
the election of each of the director-nominees are in the best interest of the
Company and its stockholders and therefore strongly recommends that you vote
FOR each of the directors nominated by the Company.
STEVEN B. RASH
President and Chief Executive Officer
<PAGE> 3
AMERICAN BIOMED, INC.
10077 GROGANS MILL ROAD, SUITE 100
THE WOODLANDS, TEXAS 77380
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 19, 1997
Notice is hereby given that the Annual Meeting (the "Annual Meeting")
of the stockholders of American BioMed, Inc., a Delaware corporation (the
"Company"), will be held on Friday, December 19, 1997 at 5:00 PM Eastern
Standard time, at the offices of Klehr, Harrison, Harvey, Branzburg & Ellers,
located at 1401 Walnut Street, Philadelphia, Pennsylvania 19102 for the
following purposes:
1. To elect a board of four directors.
2. To transact such other business as may properly come before
the Annual Meeting.
A record of the stockholders was taken at the close of business
November 3, 1997, and only those stockholders of record on that date will be
entitled to notice of and to vote at the Annual Meeting. A list of
stockholders will be available commencing Tuesday, December 9, 1997 and may be
inspected prior to the Annual Meeting during normal business hours at the
offices of the Company, 10077 Grogans Mill Road, Suite 100, The Woodlands,
Texas 77380.
Your participation in the Company's affairs is important. To ensure
your representation, if you do not expect to be present at the Annual Meeting,
please sign and date the enclosed proxy and return it promptly in the enclosed
addressed stamped envelope.
By Order of the Board of Directors
STEVEN B. RASH
President and Chief Executive Officer
November 3, 1997
<PAGE> 4
AMERICAN BIOMED, INC.
10077 GROGANS MILL ROAD, SUITE 100
THE WOODLANDS, TEXAS 77380
PROXY STATEMENT
This Proxy Statement and form of proxy are being mailed to
stockholders on or about November 10, 1997 in connection with the solicitation
by the Board of Directors of American BioMed, Inc., a Delaware corporation (the
"Company"), of proxies to be voted at the annual meeting of the Company's
stockholders (the "Annual Meeting") to be held in Philadelphia, Pennsylvania on
December 19, 1997, and at any adjournment thereof, for the purposes set forth
in the accompanying notice.
Because many stockholders are unable to attend the Annual Meeting, the
Board of Directors solicits proxies to ensure that each stockholder has an
opportunity to vote on all matters scheduled to come before the Annual Meeting.
Stockholders are urged to carefully read the material in this Proxy Statement
and register their votes by marking the appropriate boxes on the enclosed proxy
and to sign, date and return the proxy in the enclosed addressed stamped
envelope. Proxies will be voted in accordance with the directions specified
thereon and otherwise in accordance with the judgment of the persons designated
as the holders of proxies. Abstentions and broker non-votes will be treated as
present at the Annual Meeting for purposes of determining the presence or
absence of a quorum, but will be disregarded in the calculation of a plurality
or of total votes cast. Broker non-votes will be treated as not present and
not entitled to vote on any matter as to which a broker has indicated that it
does not have authority to vote. Any proxy on which no direction is specified
will be voted: (1) FOR election of all nominees for director named herein; and
(2) in the discretion of the persons designated as the holders of proxies, on
any other matter which may properly come before the Annual Meeting. A
stockholder may revoke a proxy by delivering to the Company written notice of
revocation, delivering to the Company another signed proxy signed on a later
date, or appearing at the Annual Meeting and voting in person.
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
OUTSTANDING VOTING SECURITIES 3
ELECTION OF DIRECTORS 3
Nominees 3
Activity, Structure and Compensation of the Board of Directors and Certain Committees 4
Vote Required for Election 4
OTHER INFORMATION 5
Security Ownership of Certain Beneficial Owners and Management 5
Executive Officers 6
Executive Compensation 6
Employment Agreements 7
Compensation Committees Interlocks and Insider Participation 7
Board Compensation Committee Report on Executive Compensation 7
Performance Graph 9
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 10
Auditors 11
Section 16(a) Beneficial Ownership Reporting Compliance 11
Miscellaneous Matters 11
</TABLE>
<PAGE> 6
OUTSTANDING VOTING SECURITIES
The number of voting securities of the Company outstanding on November
3, 1997, the record date for the determination of stockholders entitled to vote
at the Annual Meeting (the "Record Date"), was 17,297,568 shares of Common
Stock, each of which is entitled to one vote on all matters properly brought
before the Annual Meeting. Holders of a majority of the shares of Common Stock
entitled to vote must be present, in person or by proxy, to constitute a quorum
for the transaction of business.
ELECTION OF DIRECTORS
At the Annual Meeting, four directors are to be elected, each director
to hold office until the next annual meeting of stockholders or until his
successor is duly elected and qualified. The persons named in the accompanying
proxy have been so designated by the Board of Directors, and unless authority
is withheld, they intend to vote for the election of the nominees named below
to the Board of Directors. If any nominee should become unavailable for
election, the proxy may be voted for a substitute nominee selected by the
persons named in the proxy or the Board of Directors may be reduced
accordingly; however, the Board of Directors is not aware of any circumstances
likely to render any nominee unavailable.
NOMINEES
Certain information regarding each of the nominees is set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR SINCE
---- --- -------- --------------
<S> <C> <C> <C>
Steven B. Rash 49 Director, President and Chief 1995
Executive Officer
Lawrence M. Hoffman (+ o) 54 Director 1991
Claudio M. Guazzoni (o) 35 Director 1996
Richard S. Serbin (+) 53 Director 1996
</TABLE>
- ---------------
(+) Member, Audit Committee
(o) Member, Compensation Committee
STEVEN B. RASH has served as President, Chief Executive Officer and director of
the Company since July 15, 1995. Mr. Rash was appointed Chairman of the Board
on February 4, 1997. From 1994 until June 1995, Mr. Rash served as Vice
President of Operations of Blue Rhino Corporation, an industrial products
manufacturer. From 1992 to 1994, Mr. Rash served as President of the Technical
Services Division of the Maxum Health Corporation, a company engaged in
providing mobile MRI services. From 1989 to 1992, Mr. Rash served as the
President of Intex Medical Technologies, Inc., a medical equipment
manufacturer. Prior thereto, Mr. Rash held various positions with BOC Group,
PLC, an international manufacturer of industrial gases and healthcare products
and services. Mr. Rash holds an MBA from Southern Illinois University and
served for four years in the U.S. Army, where he reached the rank of Captain.
LAWRENCE M. HOFFMAN has served as a director of the Company since April 1991
and as Vice President of Corporate Relations from July 1990 to December 1991,
when he was appointed Vice President of Business Development, a position he
held until June 28, 1995. From March 28, 1995 until June 28, 1995, Mr. Hoffman
served as the interim Treasurer. Mr. Hoffman has over 30 years experience in
securities trading and investment banking. He has held senior management
positions with Glorc Forgan Wm. R. Staats, DuPont & Co., Burnham & Co., and
Dean Witter. Mr. Hoffman founded and was Chairman of Nicholas, Lawrence & Co.,
an investment banking firm that specialized in biotechnology research and
institutional trading. Since 1989, Mr. Hoffman has served as President and
Chief Executive Officer of the Aberlyn Group, Inc., a firm specializing in
providing investment banking services to biotechnology companies. He has
managed a number of public offerings and is a director of four life sciences
companies.
<PAGE> 7
Chairman of Nicholas, Lawrence & Co., a securities brokerage firm specializing
in institutional trading and biotechnology companies. Mr. Hoffman holds a B.S.
in Economics from New York University.
CLAUDIO M. GUAZZONI has served as a director of the Company since March 7,
1996. Mr. Guazzoni is the President and Chief Executive Officer of Zanett
Capital, Inc. ("Zanett") and has served in that capacity since 1993. He is
engaged in the business of providing financial and strategic consulting
services to business entities. Prior to his service at Zanett, Mr. Guazzoni
was a Money Manager with Delphi Capital Management, Inc. in 1992 and an
associate with Salomon Brothers, Inc. from 1985 to 1991.
RICHARD S. SERBIN has served as a director of the Company since July 17, 1996.
Since 1991, Mr. Serbin has served as Executive Vice President and a director of
Bio-Imaging Technologies, Inc. which provides specialized consulting services
to pharmaceutical and biotechnology companies. From January 1991 to March
1992, Mr. Serbin was Chairman of the Board of Radius Scientific, Inc., a
medical communications company which he founded. From June 1989 to January
1990, he served as President of Bradley Pharmaceuticals, Inc. and from
September 1988 to May 1989, held the position of Senior Vice President of
Lifetime Corporation, a holding company whose major asset, Kimberly Quality
Care, is a provider of home healthcare and temporary nursing services. Mr.
Serbin is a registered patent attorney, registered pharmacist, a member of the
Board of Trustees of the Mountainside Hospital and a member of the Board of
Health of Roseland, New Jersey. Mr. Serbin holds a B.S. from Rutgers College
of Pharmacy, a J.D. from Seton Hall Law School and a LL.M in Trade Regulation
from New York University School of Law.
ACTIVITY, STRUCTURE AND COMPENSATION OF THE BOARD OF DIRECTORS AND CERTAIN
COMMITTEES
The Company's operations are managed under the broad supervision of
the Board of Directors, which has responsibility for the establishment and
implementation of the Company's general operating philosophy, objectives, goals
and policies. During 1996 the Board of Directors convened on a combined total
of 10 regularly and specially scheduled meetings, and each director except Mr.
Serbin attended at least 75% of the meetings held by the Board and any Board
committees on which he served during his tenure in 1996.
AUDIT COMMITTEE. The Audit Committee assists the Board in fulfilling
its responsibilities to stockholders and other matters relating to the
corporate accounting and reporting practices of the Company and the quality and
integrity of the financial reports of the Company. The Audit Committee
recommends the engagement or discharge of the Company's independent auditors,
reviews with the independent auditors the plan, scope and timing of their
audits, reviews the auditors' fees and, after completion of the audit, reviews
the auditors' report with the auditors and management. The Audit Committee is
charged with satisfying the Board that the activities of the Company's
independent auditors and the internal control procedures are reasonably
designed to assure sound accounting procedures, adequate reserves, the
safekeeping of the Company's assets and properties and the proper control of
income and expenditures. The Audit Committee also performs a number of other
review functions related to auditing the financial statements and internal
controls. From January 1, 1996 to November 26, 1996 Mr. Hoffman served as the
sole member of the Audit Committee. Effective November 26, 1996 Messrs.
Hoffman and Serbin were elected to serve on the Audit Committee.
COMPENSATION COMMITTEE. The Compensation Committee reviews and
recommends to the Board the direct and indirect compensation and employee
benefits of senior executive officers and key officers and employees. The
Compensation Committee is also responsible for reviewing significant personnel
compensation policies and benefits programs and major changes thereto. In
addition, the Compensation Committee reviews management's long-range planning
for executive development and succession, establishes and periodically reviews
policies on management perquisites, and performs certain other review functions
relating to management compensation and employee relations policies. Mr.
Hoffman was the sole member of the Compensation Committee from January 1, 1996
to November 26, 1996 at which time Mr. Guazzoni was added to the Committee.
DIRECTOR COMPENSATION. During the year ended December 31, 1996, no
compensation was paid by the Company for service on the Board of Directors.
<PAGE> 8
VOTE REQUIRED FOR ELECTION
The four nominees who receive a plurality of votes cast by the holders
of Common Stock entitled to vote at the Annual Meeting shall be the duly
elected directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL FOUR NOMINEES TO THE
COMPANY'S BOARD OF DIRECTORS.
OTHER INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table presents certain information regarding the
beneficial ownership of Common Stock at the Record Date by (a) each stockholder
known by the Company to be the beneficial owner of more than five percent of
the outstanding shares of Common Stock, (b) each director and nominee, (c) each
executive officer named in the Summary Compensation Table (see "Executive
Compensation" below) and (d) all directors and executive officers as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT OF SHARES
OF BENEFICIAL OWNER (1) BENEFICIALLY OWNED (2)(3) PERCENT OF CLASS
-------------------- ------------------- ----------------
<S> <C> <C>
Steven B. Rash 528,900(4) 3.0%
Lawrence M. Hoffman 1,275,674(5)(6) 7.1%
18 Winter Place
Aberdeen, New Jersey 07747
Claudio M. Guazzoni 975,306(7) 5.3%
10 E. 76th Street
New York, New York 10021
Richard S. Serbin 22,000(8) .1%
61 Monroe Avenue
Roseland, New Jersey 07064
All Executive Officers and Directors as a Group 2,807,880(9) 14.2%
(5 persons)
</TABLE>
- --------------------
(1) Unless otherwise specified, the address of each beneficial owner is
American BioMed, Inc., 10077 Grogans Mill Road, Suite 100, The
Woodlands, Texas 77380.
(2) Unless otherwise noted, the Company believes that all persons named in
the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them.
(3) A person is deemed to beneficially own shares of Common Stock
underlying options, warrants or other convertible securities if the
stock can be acquired by such person within sixty days.
(4) Mr. Rash has options to purchase 1,527,000 shares of which only
527,000 are exercisable within sixty days.
(5) Includes 425,000 shares issuable upon the exercise of warrants held by
Aberlyn Capital Management ("Aberlyn Partnership"). Mr. Hoffman owns
a limited partnership interest in Aberlyn Partnership, and is an
officer, director and stockholder of Aberlyn Capital Management, Inc.
which is a general partner of Aberlyn Partnership. Also includes
322,000 shares which may be acquired upon the exercise of options by
Mr. Hoffman.
(6) Includes 115,000 shares owned by Aberlyn Holding Company ("Aberlyn
Holding"), the parent company of Aberlyn Partnership and Aberlyn
Capital Management, Inc. Mr. Hoffman is the Chairman of the Board and
Chief Executive Officer of Aberlyn Holding.
(7) Includes 953,306 shares issuable upon the exercise of warrants held by
Zanett Capital, Inc. ("Zanett") or its assigns. Mr. Guazzoni is
President and Chief Executive Officer of Zanett. Also includes 22,000
shares which may be acquired upon the exercise of options by Mr.
Guazzoni.
(8) Includes 22,000 shares issuable upon the exercise of options.
(9) Includes 2,498,306 shares which may be acquired upon the exercise of
options or warrants.
<PAGE> 9
EXECUTIVE OFFICERS
The executive officers of the Company serve at the pleasure of the
Board of Directors and are subject to annual appointment by the Board at its
first meeting following the annual meeting of stockholders. All of the
Company's executive officers are listed in the following table, and certain
information concerning those officers who are not also members of the Board of
Directors follows the table:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Steven B. Rash 49 President, Chief Executive Officer and
Chairman of the Board
Colene Stigler Blankinship, CPA 47 Controller and Chief Accounting Officer
Secretary and Treasurer
</TABLE>
COLENE STIGLER BLANKINSHIP, CPA joined the Company February 7, 1995 as
Controller and became the Chief Accounting Officer November 1995. She was
elected Secretary and Treasurer on February 4, 1997. From 1992 through 1994,
Ms. Blankinship served as Controller of Excel Resources, Inc., a gas marketing
company in Houston, Texas. She has 13 years experience in public accounting
which includes 9 years with the local firm of Tribolet, Fuller & Associates,
P.C., Humble, Texas. Ms. Blankinship attended Texas Tech University and North
Harris County College and is a CPA. Ms. Blankinship is a national director of
the American Society of Women Accountants, a position she has held since July
1996.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth certain summary
information concerning the compensation paid or accrued during the fiscal years
ended December 31, 1996, 1995, and 1994 to the Company's Chief Executive
Officer and to each of the other executive officers of the Company whose annual
compensation exceeded $100,000 for the fiscal year ended December 31, 1996 (the
"Named Executive Officers"), for services during the fiscal years ended
December 31, 1996, 1995, and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- --------------------------------------------------------------------------------------------------------------
Other
Annual Restricted Shares/ All
Name and Compen- Stock Options/ LTIP Other
Principal Year Salary Bonus sation Award(s) SARs Payouts Compensation
Position ($) ($) ($)(1) ($) (#) ($) ($)
<S> <C> <C> <C> <C>
Steven B. Rash 1996 141,875 7,496
President, Chief 1995 61,875(2) 19,941(3) 600,000(4)
Executive Officer
</TABLE>
- ----------------------
(1) Cost of life insurance and auto allowance.
(2) Annual compensation of $135,000 prorated from July 16, 1995, when Mr.
Rash began his service with the Company.
(3) Includes relocation expenses paid in the amount of $19,745.
(4) Represents options issued in connection with a three-year employment
agreement, vesting on various dates during the term of the agreement.
See "Employment Agreements."
<PAGE> 10
No stock options were granted during the fiscal year ended December
31, 1996 to any of the named executive officers.
The following table sets forth certain information with respect to
each exercise of stock options during the fiscal year ended December 31, 1996
by each of the named executive officers and the number and value of unexercised
options held by such named executive officers as of December 31, 1996.
AGGREGATED OPTION EXERCISES IN 1996 FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FISCAL YEAR-END FISCAL YEAR-END
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) ($)
<S> <C> <C> <C> <C>
Steven B. Rash 0 0 150,000/450,000 131,250/393,750
</TABLE>
EMPLOYMENT AGREEMENTS
Steven B. Rash entered into a three-year employment agreement (the
"Agreement") with the Company dated July 15, 1995. Pursuant to the Agreement,
Mr. Rash is employed as President and Chief Executive Officer of the Company.
The Agreement provides for a salary of $135,000 per year with annual increases
plus bonuses of up to 50% and an option to purchase 600,000 shares of common
stock. The options vest as follows: options to purchase 100,000 shares at
July 15,1995, options to purchase 50,000 shares at July 15, 1996, options to
purchase 50,000 shares at July 15, 1997, options to purchase 200,000 shares
either when the stock price reaches $3.00 per share for 30 consecutive trading
days or July 15, 1998, whichever is earlier, and options to purchase 200,000
shares either when the stock price reaches $5.00 per share for 30 consecutive
trading days or July 15, 1998, whichever is earlier.
In recognition of Mr. Rash's record of performance his employment
contract was extended in February 1997 to December 31, 1999, and on May 19,
1997, he was granted options to purchase 900,000 shares of Common Stock at an
exercise price of $.6875 to vest equally on December 31, 1997, December 31,
1998 and December 31, 1999.
COMPENSATION COMMITTEES INTERLOCKS AND INSIDER PARTICIPATION
Until June 1995, the Company did not have a Compensation Committee.
Compensation matters were determined by the Board of Directors. In June 1995,
the Board created and appointed a Compensation Committee. Effective November
26, 1996 the Board of Directors elected Messrs. Hoffman and Guazzoni to serve
on the Compensation Committee. Mr. Hoffman is a consultant of the Company and
was Vice President of Corporate Relations from July 1990 to December 1991 and
from December 1991 to June 28, 1995 served as Vice President of Business
Development. In addition, Mr. Hoffman served as the Company's interim
Treasurer from March 28, 1995 until June 28, 1995. (See "Certain Relationships
and Related Transactions.")
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Report of the Compensation Committee shall
not be deemed incorporated by reference by any general statement incorporating
by reference this Proxy Statement into any filing under the Securities Act of
1933, as amended (the "Securities Act") or under the Exchange Act, except to
the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
<PAGE> 11
The Company believes that executive compensation should be closely
related to the value delivered to stockholders. This belief has been adhered
to by developing incentive pay programs which provide competitive compensation
and reflect Company performance.
COMPENSATION PHILOSOPHY
In designing its compensation program, the Company follows its belief
that compensation should reflect the value created for stockholders while
supporting the Company's strategic business goals. In doing so, the
compensation programs reflect the following themes:
o Compensation should encourage increased stockholder value.
o Compensation programs should support the short- and long-term
business goals and objectives of the Company.
o Compensation programs should reflect and promote the Company's
values, and reward individuals for outstanding contributions
toward business goals.
o Compensation programs should enable the Company to attract and
retain highly qualified professionals.
PAY MIX AND MEASUREMENT. The Company's executive compensation is based
on three components: base salary, short-term incentives and long-term
incentives, each of which is intended to serve the overall compensation
philosophy.
BASE SALARY AND SHORT-TERM INCENTIVE. The Company's salary levels are
intended to be consistent with competitive pay practices and level of
responsibility, with salary increases reflecting competitive trends, the
overall financial performance of the Company and general economic conditions.
A portion of each employee's salary is also increased in recognition of
individual merit. This merit increase is determined by the assessment of the
performance of the individual, and level of experience, ability and knowledge
of the job. Bonus awards may also be provided if the Board of Directors
determines that the individual has achieved, or aided in the achievement of, a
pre-set corporate, individual project development or financial goal.
LONG-TERM INCENTIVES. Stock options are granted from time to time to
reward employee contributions, as well as to recognize the employee's potential
contribution to the Company's growth and profitability. In addition, the
Company has issued stock and stock options to certain officers in lieu of
salary.
CHIEF EXECUTIVE OFFICER COMPENSATION. In connection with his
appointment to the positions of President and Chief Executive Officer of the
Company in July 1995, Mr. Rash entered into a three-year employment agreement
with the Company that entitles him to receive a base salary of $135,000 per
year. See "Employment Agreements" and "Executive Compensation." As an
incentive to accept employment with the Company, Mr. Rash was also granted
options to purchase 600,000 shares of Common Stock and was remunerated for his
relocation expenses. The options vest as follows: options to purchase 100,000
shares at July 15, 1995, options to purchase 50,000 shares at July 15, 1996,
options to purchase 50,000 shares at July 15, 1997, options to purchase 200,000
shares either when the stock price reaches $3.00 per share for 30 consecutive
trading days or July 15, 1998, whichever is earlier, and options to purchase
200,000 shares either when the stock price reaches $5.00 per share for 30
consecutive trading days or July 15, 1998, whichever is earlier.
In recognition of Mr. Rash's record of performance his employment
contract was extended in February 1997 to December 31, 1999, and on May 19,
1997, he was granted options to purchase 900,000 shares of Common Stock at an
exercise price of $.6875 to vest equally on December 31, 1997, December 31, 1998
and December 31, 1999.
In general, the Compensation Committee determines the Chief Executive
Officer's compensation by evaluating such person's experience, length of
service and the overall success of the Company's operations, and will follow
such criteria to establish Mr. Rash's and any successor Chief Executive
Officer's compensation in subsequent years.
The Compensation Committee of the Board of Directors
Lawrence M. Hoffman
Claudio Guazzoni
<PAGE> 12
PERFORMANCE GRAPH
The following performance graph (the "Performance Graph") compares the
performance of the Common Stock to the Index for the NASDAQ Stock Market* (U.S.
Companies) and the Index for U.S. companies in the Surgical, Medical and Dental
Instruments and Supplies Industry, Standard Classification Code Number
3840-3849* (the "Peer Group Index"). The Performance Graph assumes that the
value of the investment in the Common Stock and each index was $100 at December
31, 1991 and that all dividends were reinvested. The Company's Common Stock
traded on the NASDAQ Small-Cap Market from October 22, 1991 through October 13,
1994. The Company was delisted from the Small-Cap Market on October 13, 1994
and is currently traded in the over-the-counter market on the NASD's OTC
Bulletin Board(TM). Quotes on which the Performance Graph below is based
represent "interdealer" prices without adjustment or markups, markdowns or
commissions and do not necessarily represent actual transactions. The
Performance Graph shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the Securities Act or the Exchange Act, except to the extent the Company
specifically incorporates the information by reference, and shall not be
otherwise deemed filed under such Acts.
[CHART GRAPH]
- ------------------
* Prepared by the Center for Research in Security Prices on September 22, 1997.
<PAGE> 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company enters into transactions with related parties only on
terms the Company believes to be comparable to or better than those that would
be available from unaffiliated parties. In the Company's view, all the
transactions described below meet that standard.
Lawrence M. Hoffman, currently a director, stockholder and paid consultant of
the Company and formerly a Vice President, is a limited partner of Aberlyn
Capital Management Limited Partnership ("Aberlyn") and is an officer, director
and stockholder of Aberlyn Capital Management, Inc., the general partner of
Aberlyn. Effective December 31, 1992, the Company and Aberlyn entered into a
Patent Assignment and License Agreement (the "Patent and License Agreement")
pursuant to which the Company assigned patents owned by the subsidiary, Cathlab
Corporation (the "Cathlab Patents"), to Aberlyn in return for $500,000. The
Cathlab Patents were exclusively licensed back to the Company for three years
for a monthly license fee of $16,355, after which Aberlyn was required to
reassign the Cathlab Patents to the Company in exchange for $50,000. Under its
terms, if the Company declined to purchase the Cathlab Patents, the Patent and
License Agreement would automatically be extended for an additional nine months
for a monthly license fee of $17,099, after which the Cathlab Patents would
automatically revert back to the Company.
The Company and Aberlyn entered into an equipment lease effective May 13,
1993 (the "Equipment Lease") pursuant to which the Company assigned certain
equipment to Aberlyn in consideration of $205,000. The equipment was
exclusively leased back to the Company for three years for a monthly fee of
$6,706, after which Aberlyn was required to return the equipment to the Company
in exchange for $20,500. Under the terms, if the Company opted not to purchase
the equipment, the Equipment Lease would automatically be extended for an
additional three months for a monthly payment of $7,011, after which the
equipment would automatically revert back to the Company.
Effective August 13, 1993, the Company and Aberlyn entered into an additional
equipment lease (the "Second Equipment Lease") pursuant to which the Company
assigned certain equipment to Aberlyn in consideration of $100,000. The
equipment was exclusively leased back to the Company for three years for a
monthly fee of $3,271, after which Aberlyn was required to return the equipment
to the Company in exchange for $10,000. If the Company declined to purchase the
equipment, the term of the Second Equipment Lease was to be automatically
extended for an additional three months for a monthly payment of $3,420, after
which the equipment would automatically revert back to the Company.
The Company and Aberlyn entered into an agreement effective March 28, 1994
whereby the terms of the Patent and License Agreement, the Equipment Lease and
the Second Equipment Lease were modified. The payment terms of the license fee
pursuant to the Patent and License Agreement were revised to semiannual
payments of $97,445 and the payment terms of the Equipment Lease were similarly
revised to semiannual payments of $39,100 and $20,281, respectively. In
consideration to Aberlyn for making these modifications, the Company issued
warrants to Aberlyn to purchase 150,000 shares of the Company's common stock at
an exercise price of $1.50 per share exercisable over a five-year period. On
May 28, 1996, Aberlyn and the Company reached an agreement to restructure the
Leases which resulted in a revised schedule of lease payments over a
twenty-four month period, with the initial payment commencing on June 1, 1996.
The payments were based on an outstanding principal amount of approximately
$500,000 and total accrued interest of approximately $148,000. In addition,
115,000 shares of Common Stock were issued in payment of consulting fees,
investment banking service fees and accumulated miscellaneous expenses totaling
$115,728.
On February 18, 1996, the Company and Zanett Capital, Inc. ("Zanett"), a
financial consulting firm, signed an agreement whereby Zanett agreed to help
the Company raise capital pursuant to an offshore private placement of equity.
Claudio M. Guazzoni, a member of the Company's Board of Directors, is Zanett's
President and Chief Executive Officer. As a retainer for availability of
services by Zanett, the Company agreed to grant Zanett warrants to purchase
shares of common stock at a rate of 1 for every 10 shares of Common Stock or
warrants issued in connection with equity and bridge financings raised by
Zanett. Each of the warrants will be exercisable at an exercise price of $0.50
per share for five years from the date it is granted, which shall be the date
of the closing of the particular equity or bridge financing in question. During
1996 through the efforts of Zanett, the Company sold 1,250,001 shares of Common
Stock, 1,390 shares of Series A Preferred and 1,500 shares of Series B
Preferred pursuant to Regulation S of the Securities Act of 1933, as amended.
In connection with these placements, the Company issued warrants to purchase
811,310 shares of Common Stock to Zanett or, upon assignment by Zanett, to
unrelated third-parties. The exercise price of the warrants
<PAGE> 14
issued in connection with the Series A Preferred and common stock is $0.50.
Those issued in connection with Series B are exercisable at $1.40 per share.
In addition a 10% placement fee of approximately $319,000 has been paid to
Zanett or their designated representative in connection with the sale of the
Series A and Series B Preferred.
In September 1996, Zanett was granted a warrant to purchase 25,000 shares of
Common Stock at $.9375 in connection with the placement of bridge financing.
The warrants are exercisable for five years.
The Company does not have a policy against employing relatives. During the
years ended December 31, 1996, 1995 and 1994, the Company paid salaries and
wages to relatives of officers of the Company amounting to $22,692, $51,600,
and $88,776, respectively.
AUDITORS
Coopers & Lybrand L.L.P., certified public accountants ("C&L"), have
served as the independent auditors of the Company since 1990. It is not
proposed that any formal action be taken at the Annual Meeting with respect to
the continued employment of C&L, inasmuch as no such action is legally
required. Representatives of C&L plan to attend the Annual Meeting and will be
available to answer appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires a company's directors and
executive officers, and persons who own more than 10% of the equity securities
of the company to file with the Securities and Exchange Commission (the "SEC")
initial reports of ownership and reports of changes in ownership of the Common
Stock.
Based solely on a review of the forms the Company has received or
prepared, the Company believes that during the year ended December 31, 1996,
all filing requirements applicable to the Company's directors, officers and
greater than 10% stockholders were met except for Mr. Serbin who was late in
filing a Form 3 and Messrs. Hoffman and Guazzoni who were late in filing all
their forms.
MISCELLANEOUS MATTERS
The annual report on Form 10-K/A-1 covering the fiscal year ended
December 31, 1996 accompanies this Proxy Statement. Any stockholder proposals
to be included in the Board of Directors' solicitation of proxies for the 1998
annual meeting of stockholders must be received by the Company at its principal
executive offices, located at 10077 Grogans Mill Road, Suite 100, The
Woodlands, Texas 77380, no later than May 15, 1998. The cost of soliciting
proxies in the accompanying form will be borne by the Company. In addition to
solicitations by mail, a number of regular employees of the Company may, if
necessary to assure the presence of a quorum, solicit proxies in person or by
telephone. The persons designated to vote shares covered by the Board of
Directors' proxies intend to exercise their judgment in voting such shares on
other matters that may properly come before the Annual Meeting. Management of
the Company does not expect that any matters other than those referred to in
this Proxy Statement will be presented for action at the Annual Meeting.
By Order of the Board of Directors,
STEVEN B. RASH
President and Chief Executive Officer
<PAGE> 15
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AMERICAN BIOMED, INC.
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE
ANNUAL MEETING OF DECEMBER 19, 1997
The undersigned stockholder of American BioMed, Inc. (the "Company") hereby
appoints Steven B. Rash and Colene Stigler Blankinship, or either of them, the
true and lawful attorneys, agents and proxies of the undersigned, each with full
power of substitution, to vote on behalf of the undersigned at the Annual
Meeting of Stockholders of the Company to be held at the offices of Klehr,
Harrison, Harvey, Branzberg & Ellers, located at 1401 Walnut Street,
Philadelphia, Pennsylvania 19102, on Friday, December 19, 1997, at 5:00 PM,
Eastern Standard Time, and at any adjournments of said meeting, all of the
shares of the Company's Common Stock in the name of the undersigned or which the
undersigned may be entitled to vote.
1. THE ELECTION OF DIRECTORS
[ ] For the election of Steven B. Rash, Lawrence M. Hoffman, Claudio
M. Guazzoni and Richard S. Serbin, as directors.
[ ] WITHHOLD AUTHORITY to vote for ALL directors listed above.
[ ] WITHHOLD AUTHORITY to vote ONLY for the directors written on the
line below:
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(THIS PROXY MUST BE DATED AND SIGNED ON THE REVERSE SIDE.)
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<PAGE> 16
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(CONTINUED FROM OTHER SIDE)
2. In their discretion, upon such other matters as may properly come before
the meeting; hereby revoking any proxy or proxies heretofore given by the
undersigned.
The Board of Directors recommends a vote FOR the nominees and if no
specification is made, the shares will be voted FOR election of the nominees
named herein.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders, the Proxy Statement and the Annual Report furnished herewith.
<TABLE>
<C> <C>
Dated , 1997
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Stockholder's Signature
PROXY -----------------------------------------------------
FOR Signature if held jointly
ANNUAL
MEETING Signature should agree with name printed hereon. If
OF stock is held in the name of more than one person,
STOCKHOLDERS EACH joint owner should sign. Executors,
administrators, trustees, guardians and attorneys
should indicate the capacity in which they sign.
Attorneys should submit powers of attorney.
</TABLE>
PLEASE MARK, SIGN, DATE AND RETURN IN THE ENVELOPE ENCLOSED
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