AMERICAN BIO MEDICA CORPORATION
102 Simons Road
Ancramdale, New York 12503
800-227-1243
September 5, 1997
Dear Fellow Shareholder:
The Fiscal 1998 Annual Shareholders' Meeting of American Bio Medica
Corporation will be held at 10:00 a.m. on Tuesday, September 23, 1997 at Albany
Marriott Hotel, 189 Wolf Road, Albany, New York 12205. Enclosed you will find
formal Notice of Annual Meeting, Proxy and Proxy Statement, detailing the
matters which will be acted upon. Directors and Officers of the Company will be
present to help host the meeting and to respond to any questions from our
shareholders. I hope you will be able to attend.
Please sign, date and return the enclosed Proxy without delay in the
enclosed envelope. If you attend the Meeting, you may vote in person even if you
have previously mailed a Proxy by withdrawing your Proxy vote at the meeting.
Any shareholder giving a proxy may revoke the same at any time prior to the
voting of such proxy by giving written notice of revocation to the Secretary, by
submitting a later dated proxy or by attending the Meeting and voting in person.
The Company's Annual Report on Form 10-KSB (including audited financial
statements) for the fiscal year ended April 30, 1997, accompanies this Proxy
Statement. The Annual Report is not a part of the proxy soliciting material. All
shares represented by proxies will be voted at the Meeting in accordance with
the specifications marked thereon, or if no specifications are made, (a) as to
Item 1, the Proxy confers authority to vote for all of the five persons listed
as candidates for a position on the Board of Directors, (b) as to Items 2 and 3,
the Proxy confers authority to vote "For", and (c) as to any other business
which comes before the Meeting, the Proxy confers authority to vote in the proxy
holder's discretion.
The Company's Board of Directors believes that a favorable vote for each
candidate for a position on the Board of Directors and for all other matters
described in the attached Notice of Annual Meeting and Proxy Statement is in the
best interests of the Company and its shareholders and unanimously recommends a
vote "FOR" all candidates and all other matters. Accordingly, we urge you to
review the accompanying material carefully and to return the enclosed Proxy
promptly.
Thank you for your investment and continued interest in American Bio Medica
Corporation.
Sincerely,
/s/Stan Cipkowski
Stan Cipkowski,
President and
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NOTICE OF FISCAL 1998 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF AMERICAN BIO MEDICA CORPORATION:
NOTICE is hereby given that the Fiscal 1998 Annual Meeting of Shareholders
(the "Meeting") of American Bio Medica Corporation will be held at 10:00 a.m. on
Tuesday, September 23, 1997 at Albany Marriott Hotel, 189 Wolf Road, Albany, New
York 12205, for the following purposes:
1. Election of Directors for the ensuing year.
2. Approval of the appointment of independent auditors for fiscal year 1998.
3. Approval of the adoption by the Board of Directors of the Fiscal 1998
Nonstatutory Option Plan.
4. Transaction of such other business as may properly come before the Meeting,
or any adjournments thereof.
Only shareholders of record at the close of business on August 29, 1997 are
entitled to notice of and to vote at the Meeting or any adjournments thereof.
Your attention is directed to the Proxy Statement accompanying this notice
for a more complete statement regarding matters proposed to be acted upon at the
meeting.
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY, FOR WHICH A RETURN ENVELOPE IS
PROVIDED. YOUR PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS EXERCISE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Edmund Jaskiewicz
Edmund Jaskiewicz,
Secretary to the Board of Directors
September 5, 1997
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PROXY STATEMENT
FOR FISCAL 1998 ANNUAL MEETING OF SHAREHOLDERS
AMERICAN BIO MEDICA CORPORATION
102 Simons Road
Ancramdale, New York 12503
Solicitation of the enclosed fiscal 1998 proxy is made by and on behalf of
the Board of Directors (the "Board of Directors") of American Bio Medica
Corporation (the "Company") to be used at the Fiscal 1998 Annual Meeting of
Shareholders to be held at 10:00 a.m. on Tuesday, September 23, 1997 at Albany
Marriott Hotel, 189 Wolf Road, Albany, New York 12205 and at any adjournments
thereof. The mailing date of this Proxy Statement and the accompanying Proxy is
September 5, 1997.
All properly executed proxies delivered pursuant to this solicitation will
be voted at the Annual Meeting in accordance with any instructions thereupon.
Any person signing and mailing the enclosed proxy may, nevertheless, revoke the
proxy at any time prior to the actual voting thereof by attending the Annual
Meeting and voting in person, by providing written notice of revocation of the
proxy or by submitting a signed proxy bearing a later date. Any written notice
of revocation should be sent to the attention of the Secretary of the Board at
the address above.
A copy of the Company's Annual Report for the fiscal year ended April 30,
1997 is enclosed with these materials, but should not be considered proxy
solicitation material.
Shareholder nominations for Directors and shareholder proposals for the
Fiscal 1999 Annual Meeting should be sent to the Company in writing on or before
June 30, 1998. The Company has received no shareholder nominations or proposals
for the Fiscal 1998 Annual Meeting.
The Company has fixed the close of business on August 29, 1997 as the
record date for determination of shareholders entitled to notice of and to vote
at the meeting or any adjournments thereof. As of the record date, the Company
had one class of shares outstanding - common shares, $.01 par value per share
("Common Shares"). As of August 29, 1997, there were 13,680,627 outstanding
Common Shares, each share entitled to one vote on each matter to be voted on at
the Annual Meeting. The holders of a majority of shares entitled to vote and
represented in person or by proxy at the Annual Meeting will constitute a quorum
for the transaction of business at the Annual Meeting. In general, Common Shares
represented by a properly signed and returned proxy card will be counted as
Common Shares present and entitled to vote at the meeting for purposes of
determining a quorum, without regard to whether the card reflects abstentions
(or is left blank) or reflects a "broker non-vote" on a matter (i.e., a card
returned by a broker because voting instructions have not been received and the
broker has no discretionary authority to vote). Holders of Common Shares are not
entitled to cumulative voting rights.
The election of a nominee for director requires approval of such nominee by
a plurality of the Common Shares present and entitled to vote in person or by
proxy; and the approval of each of the other proposals described in the Proxy
Statement requires the approval of a majority of the Common Shares present and
entitled to vote in person or by proxy on that matter (and at least a majority
of the minimum number of votes necessary for a quorum to transact business at
the Annual Meeting).
SOLICITATION OF PROXIES
The cost of the proxy solicitations will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by the directors,
officers and employees of the Company, without additional compensation, by
personal interview, telephone, telegram or otherwise. Arrangements may
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also be made with brokerage firms or other custodians, nominees or fiduciaries
for the forwarding of soliciting material to the beneficial owners of Common
Shares of the Company held of record by such persons, and the Company will
reimburse such respective brokers, custodians, nominees and fiduciaries for the
reasonable out-of-pocket expenses incurred by them in connection therewith.
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
As of August 29, 1997, there were 13,680,627 Common Shares outstanding and
entitled to vote at the Annual Meeting. Each Common Share is entitled to one
vote on each of the matters to be voted on at the Annual Meeting. The table on
the following page sets forth, as of August 29, 1997, the beneficial ownership
of each current director, each of the executive officers named in the Summary
Compensation Table, the executive officers and directors as a group and each
shareholder, known to management of the Company, to own beneficially more than
5% of the outstanding Common Shares. Unless otherwise indicated, the Company
believes that the beneficial owner set forth in the table has sole voting and
investment power.
Title of Name of Amount and Nature Percent of
Class Beneficial Owner of Beneficial Ownership(1) Class(1)
-------- ---------------- -------------------------- -----------
Common Stan Cipkowski (2) 3,045,998 (3) 21.8%
Shares 102 Simons Road
Ancramdale, NY 12603
Common Edmund Jaskiewicz (2) 3,171,372 (4) 23.0%
Shares 1730 M Street, NW
Washington, DC 20036
Common Jay Bendis (2) 818,999 (5) 5.9%
Shares 71 Springcrest Drive
Akron, Ohio 44333
Common Jasper R. Clay, Jr. 10,000 (6) 0.1%
Shares 4964 Moonfall Way
Columbia, Maryland 21044
Common John F. Murray 10,000 (7) 0.1%
Shares 1821 Lyons Road
Pompano Beach, Florida 33063
Common Henry J. Wells, Ph.D. (2) 73,584 (8) 0.5%
Shares 9421 Book Row
Columbia, Maryland 21046
Common Douglas Casterlin (2) 187,500 (9) 1.4%
Shares 65 Malloy Road
Ghent, New York 12065
Common Thomas P. Monahan (2)
Shares 208 Lexington Avenue -0- 0.0%
Paterson, New Jersey 07502
Common Directors and executive 7,317,453 50.4%
Shares officers as a group (8 persons)
---------------------------
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1. Pursuant to the rules of the Securities and Exchange Commission, Common
Shares which are not outstanding but which a person has the right to
acquire within 60 days of August 29, 1997 are considered as shares
outstanding for purposes of computing the percentage of Common Shares owned
by such person, but such shares are not deemed outstanding for the purposes
of computing the percentage of Common Shares owned by any other person.
2. Named executive officer.
3. Includes 303,250 shares issuable upon the exercise of nonstatutory options
granted pursuant to the 1996 Nonstatutory Option Plan.
4. Includes 123,417 shares issuable upon the exercise of nonstatutory options
granted pursuant to the 1996 Nonstatutory Option Plan.
5. Includes 173,000 shares issuable upon the exercise of nonstatutory options
granted pursuant to the 1996 Nonstatutory Option Plan.
6. Includes 10,000 shares issuable upon the exercise of nonstatutory options
granted pursuant to the 1996 Nonstatutory Option Plan.
7. Includes 10,000 shares issuable upon the exercise of nonstatutory options
granted pursuant to the 1996 Nonstatutory Option Plan.
8. Includes 73,584 shares issuable upon the exercise of nonstatutory options
granted pursuant to the 1996 Nonstatutory Option Plan.
9. Includes 150,000 shares issuable upon the exercise of nonstatutory options
pursuant to the 1996 Nonstatutory Option Plan.
SUMMARY COMPENSATION TABLE
The following table provides information as to annual, long-term and other
compensation paid by the Company to its Chief Executive Officer and to each of
the other named executive officers of the Company who earned in excess of
$100,000 per year for services rendered in all capacities to the Company.
- --------------------------------------------------------------------------------
Long Term Compensation
Annual Compensation Awards Payouts
-------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted All
Name and Annual Stock Options LTIP Other
Principal Fiscal Salary Bonus Compen- Awards SARs Payouts Compen-
Position Year ($) ($) sation ($) (#) ($) sation
- ----------
Stan 1997 $99,068 $5,232
Cipkowski 1996 $44,000 $5,371
President 1995 $50,000 $4,339
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Option/SAR Grants in Last Fiscal Year Table
The following table provides information as to options granted to the named
executive officers during fiscal 1997. No separate stock appreciation rights
("SARs") were granted in fiscal 1997.
Potential
Realizable Value at Assumed
Annual Rates of Stock Price
Appreciation For Option Term
Individual Grants
Number of Percent of
Securities Total
underlying Options
Options Granted to Exercise or
Granted Employees in Base Price Expiration
Name Fiscal Year ($/share) Date 5% 10%
---- ----------- ------------ ------------ --------- -------- --------
Stan Cipkowski 550,000 36.7% $3.00 6/27/99 $680,299 $930,351
Aggregated Options Granted and Exercised in Last Fiscal Year and
Fiscal Year End Option/SAR Values
The following tables sets forth certain information concerning the number
of stock options held by the named Officers as of April 30, 1997.
Number of Shares Dollar value of
underlying unexercised
unexercised (in-the-money) options/
options/warrants on warrants on
04/30/97 04/30/97
Shares
Acquired
on Value
Exercise Realized Non- Non-
(*) ($) Exercisable Exercisable Exercisable Exercisable
Stan Cipkowski 181,500 $95,250 303,250 -0- $246,391 -0-
Compensation of Directors
Directors who are not employees nor officers of the Company ("Outside
Directors") are awarded 10,000 options at the time of appointment. Outside
Directors receive a fee of $500 for attending meetings of the Board, and are
reimbursed for their out-of pocket expenses in connection therewith.
Board of Directors' Report on Executive Compensation
The compensation of the Company's executive officers and key managers,
("executives") is reviewed and approved annually by the Board of Directors. The
Board of Directors has established a Compensation/Option Committee. In addition
to reviewing and approving executive officers' salary and bonus arrangements,
the Board of Directors establishes policies and guidelines for other benefits
and administers the awards of stock options pursuant to the Company's stock
option plans.
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Compensation Policies and Procedures Applicable to Executives for Fiscal 1997
General. Compensation of the Company's executives is intended to attract,
retain and award persons who are essential to the corporate enterprise. The
fundamental policy of the Company's executive compensation program is to offer
competitive compensation to executives that appropriately rewards the individual
executive's contribution to corporate performance. The Board of Directors
utilizes subjective criteria for evaluation of individual performance and relies
substantially on the executives in doing so. The Board focuses on two primary
components of the Company's executive compensation program, each of which is
intended to reflect individual and corporate performance: base salary
compensation and long-term incentive compensation. The Company has not paid cash
incentive bonuses during fiscal 1997.
Base Salary Compensation. Executives' base salaries are determined
primarily by reference to compensation packages for similarly situated
executives of companies of similar size or in comparable lines of business with
whom the Company expects to compete for executive talent and with reference to
the revenues, gross profits and other financial criteria of the Company. The
Board also assesses subjective qualitative factors to discern a particular
executive's relative value to the corporate enterprise in establishing base
salaries. The salaries of the four executive officers have been determined by
employment agreements. No bonuses were awarded to executives in fiscal 1997. The
Board intends to award year-end bonuses to executives, pursuant to their
employment contracts, based on the gross revenues of the Company.
Long-Term Incentive Compensation. It is the Board's philosophy that
significant stock ownership by management creates a powerful incentive for
executives to build long-term shareholder value. Accordingly, the Board believes
that an integral component of executive compensation is the award of
equity-based compensation, which is intended to align executives' long-term
interests with those of the Company's shareholders. Awards of stock options to
executives have historically been at then-current market prices. The Board
believes that option grants should be considered on an annual basis.
The Company's proposed Fiscal 1998 Nonstatutory Stock Option Plan (the
"Fiscal 1998 Plan") authorizes the Board or the Option Committee to grant
nonstatutory stock options to employees of the Company. The Committee will
determine the prices and terms at which such options are granted. The Committee
uses stock options as a significant element of the compensation package of
executive officers, because it believes options provide an incentive to
executives to maximize stockholder value and because they compensate executives
only to the extent that the Company's stockholders receive a return on their
investment. In determining the total number of shares of Common Shares to be
covered by option grants to executive officers in a given year, the Committee
will take into account the number of outstanding Common Shares, the number of
shares reserved for issuance under the Company's Fiscal 1997 Nonstatutory Stock
Option Plan and Fiscal 1998 Plan, recommendations of management concerning
option grants to employees below executive level, and the Company's projected
hiring needs for the coming year. In making individual stock option grants to
executives, the Committee will consider the same factors considered in the
determination of base salary levels, as well as the stock and option holdings of
each executive and the remaining vesting schedule of such executive's options.
CEO Stan Cipkowski's Compensation. In reviewing and approving Mr.
Cipkowski's fiscal 1997 compensation, the Board of Directors considered the same
criteria detailed herein with respect to executives in general. Mr. Cipkowski's
base salary for fiscal 1997 was established at $99,000 which is below the
midpoint of base compensation for CEOs of comparable companies. This amount
represented a 125% increase over the base salary which was awarded to Mr.
Cipkowski in fiscal 1996.
5
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Audit Committee. This committee makes recommendations to the Board of
Directors with respect to the Company's financial statements and the appointment
of independent auditors, reviews significant audit and accounting policies and
practices, meets with the Company's independent public accountants concerning,
among other things, the scope of audits and reports, and reviews the performance
of the overall accounting and financial controls of the Company. The Committee
was established in July, 1997. Members of the Audit Committee are Stan
Cipkowski, Jasper R. Clay, Jr. and John F. Murray.
Compensation/Option Committee. This committee makes recommendations to the
Board of Directors relating to salaries, bonuses and other compensation and
benefits of executive officers, reviews and advises management regarding
benefits and other terms and conditions of compensation of management and
administers the Company's stock option plans. The Committee was established in
July, 1997. Members of the Compensation/Option Committee are Stan Cipkowski,
Jasper R. Clay, Jr. and John F. Murray.
The Board of Directors does not have a standing nominating committee.
Nominations for election to the Board of Directors may be made by the Board of
Directors, or by any shareholder entitled to vote for the election of directors.
Nominations made by shareholders must be made by written notice received by the
Secretary of the Company by June 30 of the year preceding the annual meeting or
within ten days of the date on which notice of a special meeting for the
election of directors is first given to shareholders.
Special meetings are held from time to time to consider matters for which
approval of the Board of Directors is desirable or is required by law. One
meeting of the Board of Directors was held during fiscal 1997. The Audit and
Compensation/Option Committees were not estabished until the first quarter of
Fiscal 1997; the Audit Committee has met once, but the Compensation/Option
Committee has not yet met.
PERFORMANCE TABLE
The following graph compares the cumulative returns of $100 invested on May
1, 1993 in (a) the Company, (b) the S&P 500 and (c) the American Stock Exchange
Biotech Index.
5/1/93* 5/1/94* 5/1/95* 5/1/96* 5/1/97*
------- ------- ------- ------- -------
American
Bio Medica
Corporation $100.00 $101.33 $34.66 $541.33 $1,024.00
S&P 500 $100.00 $102.43 $116.83 $148.70 $181.40
AMEX Biotech
Index $100.00 $77.42 $70.62 $132.83 $115.35
- -----------------
*or the next trading day if the date fell on a weekend or holiday.
6
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PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Directors elected at the Annual Meeting will serve until the next
Annual Meeting of Shareholders and until their successors are elected and
qualified. The Board of Directors of the Company has nominated Stan Cipkowski,
Edmund Jaskiewicz, Jay Bendis, Jasper R. Clay, Jr. and John F. Murray.
Stan Cipkowski (49 years old) founded the predecessor of the Company in
1982 and has been an officer and director of the Company since its incorporation
in April 1986. From 1982 to 1986, he was sole proprietor of American Micro
Media, the Company's predecessor, which was acquired by the Company. In
addition, from 1983 to 1987, Mr. Cipkowski was a general partner of Florida
Micro Media, a Fort Lauderdale-based marketer of educational software and was a
principal shareholder and Chief Financial Officer of Southeast Communications
Group, Inc., a publisher of direct response media. In 1982, he became a
consultant to Dialogue Systems, Inc., a New York-based developer of training and
communications materials, where he served as Vice-President of Sales and
Marketing. From 1977 to 1982, he was employed by Prentice-Hall Publishing
Company, reaching the position of National Sales Manager. Prior to 1977 he was
employed as an accountant for the New Seabury Corporation and as Mid-West Area
Manager for the Howard Johnson Company.
Edmund Jaskiewicz (74 years old) is a lawyer-engineer. He has practiced
international patent and corporate law as a sole practitioner since 1963 and has
served as Chairman of the Board of Directors since 1992. From 1953 to 1963 Mr.
Jaskiewicz was associated with Toulmin and Toulmin, Esqs., Washington, D.C. From
1960 to 1962, he resided in Frankfurt, Germany managing that firm's local
office. From 1952 to 1953 he was with the Patent Section of the Bureau of
Ordinance of the Department of the Navy working on patent infringement and
licensing matters. He received his J.D. in 1952 from George Washington
University Law School and his B.S. in Engineering from the University of
Connecticut in 1947.
Jay Bendis (50 years old) has been an independent consultant to biomedical
companies since 1990, specializing in commercializing new concept products in
both domestic and international markets. From 1990 to 1992, he served as
Vice-President of Sales and Marketing for Scientific Imaging Instruments where
he was a principal shareholder . From 1985 to 1990, Mr. Bendis served as
National Sales Manager of the XANAR Laser Corp., a division of Johnson &
Johnson, where he directed its national sales force and developed its marketing
strategy for integrating high power lasers into the hospital market. From 1979
to 1984, he was the Eastern Area Sales and Marketing Manager for the IVAC Corp.,
a division of Eli Lilly. Prior to 1979, Mr. Bendis held sales management
positions with Xerox Corporation and A.M. International. Mr. Bendis earned his
B.A. in Marketing/Management from Kent State University and is currently a
member of the Edison BioTechnology Center Advisory Council for the State of
Ohio.
John F. Murray (64 years old) has served as Chief Financial Officer of
Federal Supply, Inc., Pompano Beach, Florida since April, 1994. From 1988 to
1994, Mr. Murray served as Controller for Bio Therapeutics, Inc., Woodbridge,
New Jersey. He also was Controller of Shortline, a group of transportation
companies, from 1982 to 1988 and, from 1974 to 1982, of Kleber Tire & Rubber
Corp. Mr. Murray was Director of Accounting for Western Union Telegraph Company
from 1972 to 1974 and Senior Accountant for S.D. Leidesdorf & Co (now
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<PAGE>
Ernst & Young) from 1969 to 1972. Mr. Murray received his B.B.A. in Accounting
from the Baruch School of the City University of New York in 1968 and became a
Certified Public Accountant in the State of New York in 1974.
Jasper R. Clay, Jr. (52 years old) served as a United States Parole
Commissioner from 1984 to 1996 and from 1991 to 1996, as Vice-Chairman of the
United States Parole Commission and Chairman of the National Appeals Board. He
served as final authority for all decisions relating to parole, revocation,
imposition or modification of parole conditions, or denial of discharge from
supervision. From 1976 to 1984, Mr. Clay was State of Maryland Parole
Commissioner and from 1969 to 1976, he was an Associate Member of the State of
Maryland Board of Parole.
Mr. Clay served as an Associate Member of the State of Maryland Board of
Parole from 1969 to 1976, District Supervisor of the Baltimore City District
Office in 1968, Staff Specialist-Training and Development for the Maryland
Division of Parole and Probation from 1966 to 1968, Parole and Probation Agent I
and II, Baltimore District, Office of the Maryland Division of Parole and
Probation from 1958 to 1966 and as a Psychiatric Aide at the Spring Grove State
Hospital from 1957 to 1958. He received an Honorable Discharge from the United
States Army Infantry as a First Lieutenant in 1956. He is active in a number of
professional organizations including the American Correctional Association
(where he is presently a member of the Awards Committee), the Association of
Paroling Authorities International (where he serves as an officer) and the
National Council of Crime and Delinquency.
Mr. Clay earned his B.A. in Psychology from Morgan State University in 1954
and attended the graduate school at Loyola College in the areas of Guidance,
Counseling and Psychology.
It is the intention of the persons named as proxies in the accompanying
proxy, unless instructed otherwise, to vote for the persons nominated by the
Board. If any nominee should become unavailable to serve, the proxy may be voted
for the election of such substitute nominee as may be designated by the Board.
The Board has no reason to believe that any of the nominees will be unable to
serve if elected.
Any proposals to nominate a director or directors, other than those persons
nominated by the Board, must be made in person at the meeting. The Board is not
aware of any other proposals or nominations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE-NAMED NOMINEES.
PROPOSAL NO. 2 - APPROVING THE APPOINTMENT OF RICHARD A. EISNER & COMPANY,
LLP AS INDEPENDENT AUDITORS FOR FISCAL 1997
The Board of Directors appointed Richard A. Eisner & Company, LLP as
independent public accountant to audit the financial statements for Fiscal 1998
and has determined that it would be desirable to request that the shareholders
approve such appointment. A representative of Richard A. Eisner & Company, LLP
is expected to attend the meeting with the opportunity to make a statement
and/or to respond to appropriate questions from shareholders. Shareholder
approval is not required for the appointment of Richard A. Eisner &
8
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Company, LPL since the Board of Directors has the responsibility for selecting
auditors. However, the appointment is being submitted for the approval at the
Annual Meeting. No determination has been made as to what action the Board would
take if shareholders do not approve the appointment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF RICHARD A. EISNER
& COMPANY, LLP AS INDEPENDENT AUDITORS.
PROPOSAL NO. 3 - APPROVING THE ADOPTION OF THE COMPANY'S FISCAL 1998
NONSTATUTORY STOCK OPTION PLAN.
The Board of Directors has adopted the Company's Fiscal 1998 Nonstatutory
Stock Option Plan (the "Plan"). 1,000,000 Common Shares were reserved under the
Plan. The Plan is administered by the Compensation/Option Committee of the Board
of Directors.
Stock options under the Plan ("Plan Options") may be granted to employees,
officers, directors, consultants of the Company or any other parties who have
made a significant contribution to the business and success of the Company. The
exercise price of Plan Options under the Plan may be more, equal to or less than
the then current market price of the Common Shares as deemed to be appropriate.
Options granted under the Plan will not qualify as "incentive stock options"
under Section 422 of the Code.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE ADOPTION OF
THE FISCAL 1998 NONSTATUTORY STOCK OPTION PLAN.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act 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 shareholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company, the Company believes that during fiscal 1997 all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten percent
beneficial owners were complied with.
REVOCABILITY OF PROXY
Shares represented by valid proxies will be voted in accordance with
instructions contained therein, or, in the absence of such instructions, in
accordance with the Board of Directors' recommendations. Any shareholder of the
Company has the unconditional right to revoke his or her proxy at any time prior
to the voting thereof by any action inconsistent with the proxy, including
notifying the Secretary of the Company in writing, executing a subsequent proxy,
or personally appearing at the Annual Meeting and casting a contrary vote.
However, no such revocation will be effective unless and until such notice of
revocation has been received by the Company at or prior to the Annual Meeting.
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PROPOSALS OF SHAREHOLDERS
A proper proposal submitted by a shareholder in accordance with applicable
rules and regulations for presentation at the Company's Annual Meeting of
Shareholders for fiscal 1999 and received at the Company's executive offices no
later than June 30, 1998, will be included in the Company's Proxy Statement and
form of proxy relating to such Annual Meeting.
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for
action at the meeting other than the matters set forth herein. Should any other
matter requiring a vote of shareholders arise, the proxies in the enclosed form
confer upon the person or persons entitled to vote the shares represented by
such proxies the discretionary authority to vote the same in accordance with
their best judgment in the interest of the Company.
METHOD OF COUNTING VOTES
Unless a contrary choice is indicated, all duly executed proxies will be
voted in accordance with the instructions set forth on the proxy card. A broker
non-vote occurs when a broker holding shares registered in street name is
permitted to vote, in the broker's discretion, on routine matters without
receiving instructions from the client, but is not permitted to vote without
instructions on non-routine matters, and the broker returns a proxy card with no
vote (the "non-vote") on the non-routine matter. Under the rules and regulation
of the primary trading markets applicable to most brokers, both the election of
directors or the ratification of the appointment of accountants are routine
matters on which a broker has the discretion to vote if instructions are not
received from the client in a timely manner. Under New York law, broker
non-votes will have no impact on the election of directors or the ratification
or the appointment of the Company's independent auditors. Abstentions will be
counted as present for purposes of determining a quorum but will not be counted
for or against the election of directors or the ratification of independent
auditors. As to Item 1, the Proxy confers authority to vote for all of the five
persons listed as candidates for a position on the Board of Directors even
though the block in Item 1 is not marked unless the names of one or more
candidates are lined out. The Proxy will be voted "For" Items 2 and 3 unless
"Against" or "Abstain" is indicated. If any other business is presented at the
meeting, the Proxy shall be voted in accordance with the recommendations of
Management.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-KSB
The Company has filed with the Securities Exchange Commission its Annual
Report on Form 10-KSB. A copy of the Form 10-KSB for fiscal 1997 has been sent
to all shareholders with this proxy statement. The Annual Report is not a part
of the proxy soliciting material.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Edmund Jaskiewicz
Edmund Jaskiewicz
Secretary to the Board of Directors
September 5, 1997
10
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PROXY
FISCAL 1997 ANNUAL MEETING OF SHAREHOLDERS
AMERICAN BIO MEDICA CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION
The undersigned Shareholder of American Bio Medica Corporation, having
received the Notice dated September 5, 1997, of the Fiscal 1998 Annual Meeting
of Shareholders, hereby nominates, constitutes, appoints and authorizes Stan
Cikpowski and Edmund Jaskiewicz, and each of them with full power to act alone,
as proxies with full power of substitution, for me and in my name, place and
stead, to vote all the Common Shares of said corporation standing in my name on
its books on August 29, 1997, at the Fiscal 1998 Annual Meeting of Shareholders
to be held at 10:00 a.m. on Tuesday, September 23, 1997 at Albany Marriott
Hotel, 189 Wolf Road, Albany, New York 12205 or at any adjournments thereof,
with all the power the undersigned would possess if personally present, as
follows:
1. The election of the five (5) directors listed in the Proxy Statement
dated September 5, 1997, accompanying the Notice of said meeting for terms of
one year each and until their successors are elected and qualify. CUMULATIVE
VOTING IS NOT PERMITTED.
IF YOU WISH YOUR VOTES TO BE CAST FOR ALL OF THE FIVE (5) PERSONS LISTED
BELOW, PLACE AN "X" IN THIS BOX |_|.
IF YOU DO NOT WISH TO VOTE FOR ALL OF THE CANDIDATES, LINE OUT THE NAMES OF
PERSONS FOR WHOM YOU DO NOT CHOOSE TO VOTE:
DIRECTORS:
Stan Cipkowski
Edmund Jaskiewicz
Jay Bendis
John F. Murray
Jasper R. Clay, Jr.
2. Approval of the appointment of Richard A. Eisner & Company, LLP as
independent auditors for Fiscal year 1998.
FOR |_| AGAINST |_| ABSTAIN |_|
3. Adoption of the Fiscal 1998 Nonstatutory Option Plan.
FOR |_| AGAINST |_| ABSTAIN |_|
4. Upon such other business as may be brought before the meeting or any
adjournments thereof. The Board of Directors at present knows of no other
business to be presented.
<PAGE>
THIS PROXY CONFERS AUTHORITY TO VOTE FOR ALL OF THE FIVE PERSONS LISTED
EVEN THOUGH THE BLOCK IN ITEM 1 IS NOT MARKED UNLESS THE NAMES OF ONE OR MORE
CANDIDATES ARE LINED OUT. THIS PROXY WILL BE VOTED "FOR" ITEMS 2 AND 3 ABOVE
UNLESS "AGAINST" OR "ABSTAIN" IS INDICATED. IF ANY OTHER BUSINESS IS PRESENTED
AT SAID MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF MANAGEMENT.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND THE COST OF
SAME IS BORNE BY THE CORPORATION. THIS PROXY MAY BE REVOKED BY WRITING THE
SECRETARY TO THE BOARD, AMERICAN BIO MEDICA CORPORATION, 102 SIMONS ROAD,
ANCRAMDALE, NEW YORK 12503 OR IN PERSON AT THE FISCAL 1998 ANNUAL MEETING OF
SHAREHOLDERS AT ANY TIME PRIOR TO ITS EXERCISE.
Date:
Name:
Beneficial Shareholder (Please Print)
Address:
Signature(s)
(All Shareholders must sign)
NUMBER OF SHARES VOTING
IF SHARES ARE NOT REGISTERED IN YOUR NAME, PLEASE GIVE THE NAME AND ADDRESS
OF THE PERSON OR ENTITY IN WHOSE NAME THEY ARE REGISTERED.
(This must be completed if applicable)
Please date, fill in your complete name and address and sign above exactly
as your name or names appear hereon, and return this proxy promptly in the
enclosed envelope. When signing as attorney, executor, administrator, trustee
or guardian, please give full title. If there is more than one fiduciary, all
should sign. All joint owners must sign.
<PAGE>
Fiscal 1998 Nonstatutory Stock Option Plan
Exhibit 1
AMERICAN BIO MEDICA CORPORATION
NONSTATUTORY STOCK OPTION PLAN
July 21, 1997
1. Purpose
The purpose of this Nonstatutory Stock Option Plan (hereinafter referred to
as the "Plan"), is to provide a special incentive to selected individuals who
have made significant contributions to the business and success of AMERICAN BIO
MEDICA CORPORATION, (hereinafter referred to as the "Company"). The Plan is
designed to accomplish this purpose by offering such individuals options
("Option") to purchase the common shares of the Company ("Shares") so that they
will share in the Company's success.
2. Administration
The Plan shall be administered by the Board of Directors of the Company or
by an option committee to be established by the board of directors of the
Company. If an option committee administers the Plan, it shall consist of three
or more members, at least one of whom shall be neither an officer nor an
employee of the Company. (The board of directors or an option committee shall be
referred to as the "Board" herein.)
The Board shall have authority, consistent with the Plan, (a) to determine
which individuals shall be granted Options; (b) to determine the time or times
when Options shall be granted and the number of Shares to be subject to each
Option; (c) to determine the exercise price of the Shares subject to each Option
and the method of payment of such price; (d) to determine the time or times when
each Option becomes exercisable and the duration of the exercise period, subject
to the limitations contained in Paragraph 6(b); (e) to prescribe the form or
forms of the instruments evidencing any Options granted under the Plan and of
any other instruments required under the Plan and to change such forms from time
to time; (f) to adopt, amend and rescind rules and regulations for the
administration of the Plan and the Options and for its own acts and proceedings;
and (g) to decide all questions and settle all controversies and disputes which
may arise in connection with the Plan. All decisions, determinations and
interpretations of the Board shall be binding on all parties concerned.
Fiscal 1998 Nonstatutory Stock Options Plan - 1
<PAGE>
3. Participants
The Participants in the Plan shall be employees, officers, directors,
consultants of the Company or any other parties who have made a significant
contribution to the business and success of the Company, as may be selected from
time to time by the Board in its discretion. In any grant of Options after the
initial grant, Participants who were previously granted Options or sold Shares
under the Plan may be included or excluded.
4. Limitations
No Option shall be granted under the Plan after April 30, 2001, but Options
theretofore granted may extend beyond that date. Subject to adjustment as
provided in Section 8 of the Plan, the number of Shares which may be issued
under the Plan shall not exceed one million (1,000,000) in the aggregate. To the
extent that any Option granted under the Plan shall expire or terminate
unexercised or for any reason become unexercisable as to any Shares subject
thereto, such Shares shall thereafter be available for further grants under the
Plan, within the limit specified above.
5. Shares to be Issued
Shares to be issued under the Plan may constitute an original issue of
authorized Shares or may consist of previously issued Shares acquired by the
Company, as shall be determined by the Board. The Board and the proper officers
of the Company shall take any appropriate action required for such issuance. The
maximum number of Shares which may be issued under the Plan is one million
(1,000,000) Shares.
6. Terms and Conditions of Options
All Options granted under the Plan shall be subject to the following terms
and conditions (except as provided in Section 7) and to such other terms and
conditions as the Board shall determine to be appropriate to accomplish the
purposes of the Plan:
(a) Exercise price. The exercise price under each Option shall be
determined by the Board and may be more, equal to or less than the
then current market price of the Shares as the Board may deem to be
appropriate: provided, however, that in the event an option committee
shall determine to grant an option at less than 85% of the then
current market price of the Shares, such Option shall not be granted
by the option committee without the prior approval of the Board of
Directors.
(b) Period of Options. The period of an Option shall not exceed five years
from the date of grant.
(c) Exercise of Options.
(i) Each Option shall be made exercisable at such time or times,
whether or not in installments, as the Board shall prescribe at
the time the Option is granted.
(ii) A person electing to exercise an Option shall give written notice
to the Company, as specified by the Board, of his/her election
and of the number of Shares he/she has elected to purchase, such
notice to be accompanied by such instruments or documents as may
be required by the Board, and shall at the time of such exercise
tender the purchase price of the Shares he/she has elected to
purchase.
(d) Payment for Issuance of Shares. Upon exercise of any Option granted
hereunder, payment in full shall be made at the time of such exercise
for all such Shares then being purchased.
The Company shall not be obligated to issue any Shares unless and until, in
the opinion of the Company's counsel, all applicable laws and regulations have
been complied with, nor, in the event the Shares at the time are not listed upon
any stock exchange, unless and until the Shares to be issued have been listed or
authorized to be added to the list upon official notice of issuance upon such
exchange, nor unless or until all other legal matters in connection with the
issuance and delivery of Shares have been approved by the Company's counsel.
Without limiting the generality of the foregoing, the Company may require from
the Participant such investment representation or such agreement, if any, as
counsel for the Company may consider necessary in order to comply with the
Securities Act of 1933 as then in effect, and may require that the Participant
agree that any sale of the Shares will be made only in such manner
Fiscal 1998 Nonstatutory Stock Options Plan - 2
<PAGE>
as is permitted by the Board and that a Participant will notify the Company when
he/she intends to make any disposition of the Shares whether by sale, gift or
otherwise. The Participant shall take any action reasonably requested by the
Company in such connection. A Participant shall have the rights of a stockholder
only as to Shares actually acquired by him/her under the Plan.
(e) Transferability of Options. No Option may be transferred by the
Participant otherwise than by will or by the laws of descent and
distribution, and during the Participant's lifetime the Option may be
exercised only by the Participant.
(f) Termination of Employment. If the Participant is an employee and
his/her employment terminates for any reason other than his/her death,
the Participant may, unless discharged for cause, thereafter exercise
his/her Option as provided below, but only to the extent the
Participant was entitled to exercise the Option on the date when
his/her employment terminated. If such termination of employment is
voluntary on the part of the Participant, he/she may exercise his/her
Option only within ten days after the date of termination of
employment (unless a longer period not in excess of three months is
allowed by the Board). If such termination of employment is
involuntary on the part of the Participant, he/she may exercise
his/her Option only within three months after the date of termination
of employment. In no event, however, may such Participant exercise
his/her Option at a time when the Option would not be exercisable had
the Participant remained an employee or when the termination was for
cause. For purposes of this subsection (f), a Participant's employment
shall not be considered terminated in the case of sick leave or other
bona fide leave of absence approved by the Company or a subsidiary, or
in the case of a transfer to the employment of a subsidiary or to the
employment of the Company. Anything herein to the contrary
notwithstanding, an Option may be exercised only to the extent
exercisable on the date of termination of employment by death or
otherwise.
(g) Retirement or Resignation. If prior to the expiration date of a
Participant's Option an Optionee shall retire or resign with the
Company's consent such Option may be exercised in the same manner as
if the Optionee had continued in the Company's employ; provided,
however, the Board may terminate, at any time prior to exercise, all
unexercised Options if it shall determine that the retired or
resigning Participant Optionee has engaged in any activity detrimental
to the Company's interest.
(h) Death. If a Participant dies at a time when he/she is entitled to
exercise an Option, then at any time or times within one (1) year
after his/her death (or such further period as the Board may allow)
such Option may be exercised, as to all or any of the Shares which the
Participant was entitled to purchase immediately prior to his/her
death, by his/her executor or administrator or the person or persons
to whom the Option is transferred by will or the applicable laws of
descent and distribution, and except as so exercised such Option shall
expire at the end of such period. In no event, however, may an Option
be exercised after the expiration of the Option period.
7. Replacement Options
The Company may grant Options under the Plan on terms differing from those
provided for in Section 6 where such Options are granted in substitution for
Options held by employees of other corporations who concurrently become
employees of the Company or a subsidiary as the result of a merger,
consolidation or other reorganization of the employing corporation with the
Company or subsidiary, or the acquisition by the Company or a subsidiary of the
business, property or stock of the employing corporation. The Board may direct
that the substitute Options be granted on such terms and conditions as the Board
considers appropriate in the circumstances.
Fiscal 1998 Nonstatutory Stock Options Plan - 3
<PAGE>
8. Changes in Stock
In the event of a stock dividend, stock split or recapitalization or merger
in which the Company is the surviving corporation, or other similar capital
change, the number and kind of Shares or securities of the Company to be subject
to the Plan and to Options then outstanding or to be granted thereunder, the
maximum number of Shares or securities which may be issued or sold under the
Plan, the exercise price and other relevant provisions shall be appropriately
adjusted by the Board, the determination of which shall be binding on all
persons.
9. Employment Rights
The adoption of the Plan or the granting of an Option does not confer upon
any individual any right to employment or continued employment with the Company
or a subsidiary, as the case may be, nor does it interfere in any way with the
right of the Company or a subsidiary to terminate the employment of any of its
employees at any time.
10. Amendment
The Board may at any time discontinue granting Options under the Plan. The
Board of the Company may at any time or times amend the Plan or amend any
outstanding Option or Options for the purpose of satisfying the requirements of
any changes in applicable laws or regulations or for any other purpose which may
at the time be permitted by law provided, however, that, except to the extent
required or permitted under Section 8, no such amendment shall void or diminish
Options previously granted without the consent of the Participant, nor shall any
amendment increase or accelerate the conditions and actions required for the
exercise of an Option unless the Participant shall have been discharged from the
Company's employment for cause.
Adopted by the Board of Directors
on June 21, 1997
Fiscal 1998 Nonstatutory Stock Options Plan - 4
<PAGE>
