UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box: |_|
|X| Preliminary Proxy Statement |_| Confidential, for Use of the
|_| Definitive Proxy Statement Commission Only (as permitted
|_| Definitive Additional Materials by Rule 14a-6(e)(2))
|_| Soliciting Material Under ss.240.14a-12
AMERICAN BIO MEDICA CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(1) Title of each class of securities to which transaction applies:
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
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|_| Check box if any part of the fee is offset as provided by Exchange Act
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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|_| Fee paid previously with preliminary materials.
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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:
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(4) Date Filed:
[LOGO]
AMERICAN BIO MEDICA CORPORATION
122 Smith Road
Kinderhook, New York 12106
April 26, 2006
Dear Fellow Shareholder:
You are cordially invited to attend the 2006 Annual Meeting of
Shareholders of American Bio Medica Corporation (the "Company"), which will be
held on June 13, 2006 at 10:00 a.m., eastern standard time, at the Holiday Inn
located at 3 Empire Drive, Rensselaer, New York 12144 (the "Annual Meeting").
The attached Notice of Annual Meeting and proxy statement describe the
formal business that we will transact at the Annual Meeting. The Company's
Annual Report on Form 10-KSB (including audited financial statements) for the
fiscal year ending December 31, 2005 accompanies this Proxy Statement. The
Annual Report is not a part of the proxy soliciting material. In addition to the
formal items of business, management will report on the operations and
activities of the Company and you will have an opportunity to ask questions.
Directors and officers of the Company will be present to respond to any
questions you may have.
The Board of Directors of the Company has determined that an affirmative
vote on each matter to be considered at the Annual Meeting is in the best
interests of the Company and its shareholders and unanimously recommends a vote
"FOR" each of these matters.
Please complete, sign and return the enclosed proxy card promptly, whether
or not you plan to attend the Annual Meeting. Your vote is important regardless
of the number of shares you own. Voting by proxy will not prevent you from
voting in person at the Annual Meeting but will assure that your vote is counted
if you cannot attend.
On behalf of the Board of Directors and the employees of American Bio
Medica Corporation, we thank you for your continued support and look forward to
seeing you at the Annual Meeting.
Sincerely yours,
/s/ Melissa A. Decker
---------------------
Melissa A. Decker
Corporate Secretary
[LOGO]
AMERICAN BIO MEDICA CORPORATION
122 Smith Road
Kinderhook, New York 12106
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date: June 13, 2006
Time: 10:00 a.m., Eastern Standard Time
Place: The Holiday Inn
3 Empire Drive
Rensselaer, New York 12144
At our 2006 Annual Meeting, we will ask you to:
1. Elect six directors for staggered terms commencing with the ensuing year
and until their successors shall be elected and duly qualified. Two
directors to serve a one-year term, expiring at the 2007 Annual Meeting,
two directors to serve a two-year term expiring at the 2008 Annual Meeting
and two directors to serve a three-year term expiring at the 2009 Annual
Meeting. The following directors are being nominated:
o Anthony G. Costantino, Ph.D. (2007) o Carl Florio (2007)
o Edmund M. Jaskiewicz (2008) o Daniel W. Kollin (2008)
o Stan Cipkowski (2009) o Richard P. Koskey (2009)
2. To act upon a proposal to amend and restate the Company's Bylaws so as to
stagger the terms board members will serve.
3. Transact any other business as may properly come before the Annual Meeting.
You may vote at the Annual Meeting if you were a shareholder of American Bio
Medica Corporation at the close of business on April 14, 2006, the record date.
By Order of the Board of Directors
/s/ Melissa A. Decker
-----------------------------------------
Kinderhook, New York Melissa A. Decker
April 26, 2006 Corporate Secretary
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You are cordially invited to attend the Annual Meeting. It is important that
your shares be represented regardless of the number of shares you own. The Board
of Directors urges you to sign, date and mark the enclosed proxy card promptly
and return it in the enclosed envelope. Returning the proxy card will not
prevent you from voting in person if you attend the Annual Meeting.
================================================================================
[LOGO]
AMERICAN BIO MEDICA CORPORATION
122 Smith Road
Kinderhook, New York 12106
PROXY STATEMENT
General
American Bio Medica Corporation is a New York corporation ("ABMC" or the
"Company"). The term "Annual Meeting," as used in this proxy statement, includes
any adjournment or postponement of such meeting.
We have sent you this proxy statement and enclosed proxy card because the
Board of Directors is soliciting your proxy to vote at the Annual Meeting. This
proxy statement summarizes the information you will need to know to cast an
informed vote at the Annual Meeting. You do not need to attend the Annual
Meeting to vote your shares. You may simply complete, sign and return the
enclosed proxy card and your votes will be cast for you at the Annual Meeting.
This process is described below in the section entitled "Voting."
We began mailing this proxy statement, the Notice of Annual Meeting and
the enclosed proxy card on or about May 22, 2006 to all shareholders entitled to
vote. In this mailing, we also included our Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2005, however it should not be considered proxy
solicitation material.
Shareholders entitled to vote; Record Date
If you owned common stock of ABMC at the close of business on April 14,
2006, (the "Record Date"), you are entitled to vote at the Annual Meeting, or
any adjournments thereof. On the Record Date, the Company had one class of
voting shares outstanding - common shares, $.01 par value per share ("common
shares") and there were 21,359,768 shares of common stock outstanding and no
shares of preferred stock outstanding.
Procedure for Submitting Shareholder Proposals
Shareholder nominations for directors and/or shareholder proposals for the
next Annual Meeting of Shareholders must be received by the Company in writing
on or before January 15, 2007 and must otherwise comply with the requirements of
Rule 14a-8 of the Securities Exchange Act of 1934 (the "Exchange Act"). The
Company has not received any shareholder proposals or shareholder nominations
for directors for this Annual Meeting.
Voting
You are entitled to one vote at the Annual Meeting for each common share
of ABMC that you owned as of the close of business on April 14, 2006. The number
of shares you own (and may vote) is listed on your proxy card.
Voting by attending the meeting. A shareholder may vote his or her shares
in person at the Annual Meeting. A shareholder planning to attend the meeting
should bring proof of identification for entrance to the meeting. If your shares
are not registered in your own name, you will need appropriate documentation to
vote personally at the Annual Meeting. Examples of such documentation include a
broker's statement, letter or other document that will confirm your ownership of
shares of American Bio Medica Corporation.
1
Voting by proxy card. All shares entitled to vote and represented by
properly executed proxy cards received prior to the Annual Meeting and not
revoked, will be voted at the Annual Meeting in accordance with the instructions
indicated on those proxy cards. If no instructions are indicated on a properly
executed proxy card, the shares represented by that proxy card will be voted as
recommended by the Board of Directors. If any other matters are properly
presented for consideration at the Annual Meeting, including, among other
things, consideration of a motion to adjourn the Annual Meeting to another time
or place (including, without limitation, for the purpose of soliciting
additional proxies), the persons named in the enclosed proxy card and acting
thereunder generally will have discretion to vote on those matters in accordance
with their best judgment. The Company does not currently anticipate that any
other matters will be raised at the Annual Meeting.
For the election of directors, the six nominees who receive the most votes
for each seat will be elected to the six available memberships on the Board
(i.e. by a plurality of votes). If you return a signed proxy form or attend the
Annual Meeting but choose to abstain from voting on any proposal, you will be
considered present at the Annual Meeting and not voting in favor of the
proposal. Since most proposals pass only if they receive favorable votes from a
majority of votes present at the Annual Meeting, the fact that you are
abstaining and not voting in favor of a proposal will have the same effect as if
you had voted against the proposal.
Effect of Broker Non-Votes
If your broker holds shares that you own in "street name," the broker may
vote your shares on the proposals listed above even if the broker does not
receive instructions from you. If your broker does not vote on a proposal, this
will constitute a "broker non-vote." A broker non-vote would have no effect on
the outcome of Proposal 1 because only a plurality of votes cast is required to
elect a director.
Quorum
A quorum of shareholders is necessary to hold a valid meeting. If the
holders of at least a majority of the total number of the outstanding shares of
common stock entitled to vote are represented in person or by proxy at the
Annual Meeting, a quorum will exist. We will include proxies marked as
abstentions and broker non-votes to determine the number of shares present at
the Annual Meeting. Holders of common shares are not entitled to cumulative
voting rights.
Revocability of Proxy.
Any proxy card given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. A proxy card may be revoked (1)
by filing with the Corporate Secretary of the Company, at or before the taking
of the vote at the Annual Meeting, a written notice of revocation or a duly
executed proxy card, in either case later dated than the prior proxy card
relating to the same shares, or (2) by attending the Annual Meeting and voting
in person (although attendance at the Annual Meeting will not of itself revoke a
proxy). Any written notice of revocation or subsequent proxy card must be
received by the Corporate Secretary of the Company prior to the taking of the
vote at the Annual Meeting. Such written notice of revocation or subsequent
proxy card should be hand delivered to the Corpoate Secretary of the Company or
should be sent so as to be delivered to American Bio Medica Corporation, 122
Smith Road, Kinderhook, New York 12106, Attention: Corporate Secretary.
2
Solicitation of Proxies
ABMC will pay the costs of soliciting proxies from its shareholders.
Without additional compensation, directors, officers or employees of ABMC may
solicit proxies by mail, telephone, and other electronic forms of communication
or in person.
ABMC will also reimburse banks, brokers, nominees and other fiduciaries
for the expenses they incur in forwarding the proxy materials to you.
Arrangements may 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. ADP has been retained to assist in soliciting proxies at a
fee of approximately $6,000 plus distribution costs and other costs and
expenses.
Security Ownership of Management and Certain Beneficial Owners
As of April 14, 2006, there were 21,359,768 common shares outstanding of
which 21,359,768 common shares are entitled to vote at the Annual Meeting. The
following table sets forth, as of April 14, 2006 the beneficial ownership of the
Company's common shares by (i) each director, (ii) each nominee for director,
(iii) each of the executive officers named in the Summary Compensation Table;
(iv) all directors and executive officers of the Company as a group; and (v)
each shareholder, known to management of the Company, to beneficially own more
than five percent (5%) of the outstanding common shares.
The number and percentage of shares beneficially owned is determined under
the rules of the U.S. Securities and Exchange Commission, and the information is
not necessarily indicative of beneficial ownership for any other purpose. Under
such rules, beneficial ownership includes any shares as to which the individual
has sole or shared voting power or investment power and also any shares which
the individual has the right to acquire within 60 days after April 14, 2006
through the exercise of any stock option, exchange of Exchangeable Shares or
other right. Unless otherwise indicated, each person has sole voting and
investment power (or shares such powers with his or her spouse) with respect to
the shares shown as beneficially owned.
Name and Address Number of Securities
Title of Class of Beneficial Owner Beneficially Owned* Percent of Class
-------------- ------------------- ------------------- ----------------
Common Stan Cipkowski
C/O 122 Smith Road
Kinderhook, NY 12106 2,331,500(1) 10.5%
Common Edmund M.Jaskiewicz
C/O 122 Smith Road
Kinderhook, NY 12106 2,068,155(2) 9.6%
Common Martin R. Gould
C/O 122 Smith Road
Kinderhook, NY 12106 365,000(3) 1.7%
Common Keith E. Palmer
C/O 122 Smith Road
Kinderhook, NY 12106 240,000(4) 1.1
Common Richard P. Koskey
C/O 122 Smith Road
Kinderhook, NY 12106 64,750(5) **
Common Daniel W. Kollin
C/O 122 Smith Road
Kinderhook, NY 12106 75,750(6) **
Common Anthony G Costantino
C/O 122 Smith Road
Kinderhook, New York 12106 62,000(7) **
Common Carl A. Florio
C/O 122 Smith Road
Kinderhook, NY 12106 61,830(8) **
Common Marathon Capital Management
PO Box 771
Hunt Valley, MD 21030 1,333,750 6.2
Common Directors and Executive Officers
as a group (8 persons) 5,268,985(9) 22.8%
3
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* The number of shares noted for each individual is based upon information
obtained from their Section 16(a) filings with the United States
Securities and Exchange Commission.
** Less than one percent (1%).
(1) Includes 838,500 common shares subject to stock options exercisable within
60 days of April 14, 2006.
(2) Includes 151,500 common shares subject to stock options exercisable within
60 days of April 14, 2006.
(3) Includes 360,000 common shares subject to stock options exercisable within
60 days of April 14, 2006.
(4) Includes 200,000 common shares subject to stock options exercisable within
60 days of April 14, 2006 and 12, 500 common shares subject to warrants
exercisable within 60 days of April 14, 2006.
(5) Includes 44,750 common shares subject to stock options exercisable within
60 days of April 14, 2006.
(6) Includes 75,750 common shares subject to stock options exercisable within
60 days of April 14, 2006.
(7) Includes 62,000 common shares subject to stock options exercisable within
60 days of April 14, 2006.
(8) Includes 49,830 common shares subject to stock options exercisable within
60 days of April 14, 2006.
(9) Includes an aggregate of 1,794,840 common shares subject to stock options
or warrants exercisable within 60 days of April 14, 2006.
DISCUSSION OF PROPOSALS RECOMMENDED BY BOARD
Proposal No. 1
Election of Directors
General
The Nominating Committee of the Board of Directors has nominated six
persons for election as directors at the Annual Meeting of Shareholders. If you
elect the nominees and Proposal No. 2 (Amendment and Restatement of the
Company's Bylaws) is approved, each will hold office for the term set forth
opposite their names or until their successors have been elected. If you elect
the nominees and Proposal No. 2 is not passed, each will serve until the next
Annual Meeting of Shareholders or until their successors have been elected.
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 of Directors. 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 of Directors. The Board of Directors has no reason to believe that any
of the nominees will be unable to serve if elected.
Name Age Term Expires Position(s) held Director Since
---- --- ------------ ---------------- --------------
Anthony G. Costantino, Ph.D. 46 2007 Director 2004
Carl A. Florio 57 2007 Director 2004
Edmund M. Jaskiewicz 82 2008 President/Director 1992
Daniel W. Kollin 64 2008 Director 2004
Stan Cipkowski 57 2009 Chief Executive Officer/Director 1986
Richard P. Koskey 66 2009 Director 2003
4
The principal occupation and business experience during at least the last 5
years of each nominee for election as director are set forth below.
Directors Nominated for Terms Expiring in 2007
Anthony G. Costantino, Ph.D. was appointed to our Board of Directors in June
2004. Since September 2002, he has served as Vice President, Laboratory
Operations for National Medical Services, Inc. From September 1991 until August
2002, he held various positions within American Medical Laboratories, Inc., with
the most recent being Sr. Vice President and Director until August 2002. Dr.
Costantino received his Ph.D., in Forensic Toxicology from the University of
Maryland, School of Medicine in 1991, his M.S. in Pharmacology/Toxicology, from
Duquesne University in 1984 and his B.S. in Pharmacy from Duquesne University in
1983.
Carl A. Florio joined our Board of Directors in August 2004. Mr. Florio served
as President and CEO of Hudson River Bancorp, Inc. from 1996 until 2005 when
Hudson River BanCorp, Inc. was acquired by First Niagara Financial Group, Inc.
(NASDAQ:FNFG). Upon completion of the acquisition, Mr. Florio was appointed
Regional President - Eastern New York of First Niagara Financial Group, Inc. Mr.
Florio received his B.S. in public accounting from the State University of New
York at Albany in 1971.
Directors Nominated for Terms Expiring in 2008
Edmund M. Jaskiewicz has been one of our directors since 1992 and was appointed
President in September 2003. Mr. Jaskiewicz is a lawyer-engineer. He has
practiced international patent and corporate law as a sole practitioner since
1963, and served as our Chairman of the Board of Directors from 1992 until 1999.
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.
Daniel W. Kollin was re-appointed to our Board of Directors in January 2004. He
previously served on our Board of Directors from February 2003 until he resigned
in September 2003. Since 1990, Mr. Kollin has been Managing Director of BioMed
Capital Group, Ltd. He has over 20 years experience in investment banking,
venture capital and corporate management. He received his MBA from The Wharton
School of The University of Pennsylvania. He currently serves on the Board of
Directors of IsoTis Orthobiologics (TORONTO:ISO).
Directors Nominated for Terms Expiring in 2009
Stan Cipkowski founded our predecessor in 1982. He has been a member of our
Board of Directors since our incorporation in April 1986 and was re-appointed
Chief Executive Officer in September 2004. Mr. Cipkowski had previously resigned
as the Company's Chief Executive Officer in January 2001. From January 2001
through July 2003, Mr. Cipkowski served as an Executive Vice President of the
Company. Mr. Cipkowski remained an employee of the Company after his resignation
as Executive Vice President and re-assumed the position of Chief Executive
Office in September 2004. He reorganized the Company as American Bio Medica
Corporation in 1992 and is the inventor of the Rapid Drug Screen(R). Mr.
Cipkowski attended Mater Christi Seminary and St. Louis University from 1965 to
1969. Mr. Cipkowski is currently a member of the Board of Directors of Premier
Mortgage Resources, Inc. (OTCPK: PMRS.PK)
Richard P. Koskey was appointed to our Board of Directors in October 2003. Mr.
Koskey brings over 30 years of financial experience as a Certified Public
Accountant. Since 1975, he has been a managing principal of Pattison, Koskey,
Howe & Bucci, P.C., a regional accounting firm. Mr. Koskey received his B.A.
from Duke University in 1963. He also serves on the Board of Directors of First
Niagara Financial Group, Inc. (NASDAQ:FNFG).
5
================================================================================
The Board of Directors unanimously recommends a vote "FOR" all of the nominees
for election as directors
================================================================================
INFORMATION ABOUT THE BOARD OF DIRECTORS AND MANAGEMENT
Board of Directors
ABMC's Board of Directors currently consists of six members. The Board of
Directors has nominated six directors for election at the 2006 Annual Meeting of
Shareholders.
The Board of Directors oversees our business and monitors the performance
of our management. The Board of Directors does not involve itself in the
day-to-day operations of the Company. Our executive officers and management
oversee our day-to-day operations. Our directors fulfill their duties and
responsibilities by attending regular meetings of the Board, which are currently
held on a bi-monthly basis. Special meetings may be held from time to time to
consider matters for which approval of the Board of Directors is desirable or is
required by law. Our directors also discuss business and other matters with our
key executives and our principal external advisors (legal counsel, auditors, and
other consultants) when necessary.
The Board of Directors held six regular meetings and no special meetings
during the fiscal year ended December 31, 2005. Each incumbent director, other
than Anthony G. Costantino, attended at least 75% of the meetings of the Board
of Directors.
Compensation of Directors
Directors who are not employees or officers of the Company ("Independent
Directors") receive a fee of $2,500 for attending meetings of the Board in
person and $1,250 for attendance at telephonic meetings of the Board, and are
reimbursed for out-of-pocket expenses incurred in attending such meetings.
Those Independent Directors who are members of the Company's Compensation
and/or Audit Committees of the Board of Directors receive a fee of $1,000 for
attending meetings of the Committees in person and $500 for attendance at
telephonic meetings of the Committees, and are reimbursed for out-of-pocket
expenses incurred in attending such meeting.
Code Of Ethics
The Company has adopted a Code of Ethics that applies to all employees,
including but not limited to the principal executive officer, principal
financial officer, principal accounting officer or controller, or person
performing similar functions. The Board of Directors will review the code of
Ethics on a regular basis and propose or adopt additions or amendments to the
Code of Ethics as appropriate. A copy of the Company's Code of Ethics can be
found on its website located at www.abmc.com, under the section title
"Corporate", "Officers and Directors". A copy of the Code of Ethics may also be
obtained free of charge by sending a written request to the Corporate Secretary,
American Bio Medica Corporation, 122 Smith Road, Kinderhook, New York 12106.
Independent Directors
We use the National Association of Securities Dealers ("NASD") listing
standards and SEC rules and regulations to determine the independence of our
directors. For a director to be independent under NASD's rules, the director
must be a person other than an officer or employee of the company or its
subsidiaries or any other individual having a relationship, which, in the
opinion of the company's board of directors, would interfere with the exercise
of independent judgment in carrying out the responsibilities of a director. The
following persons cannot considered independent:
6
o a director who is, or at any time during the past three years was,
employed by ABMC or by any parent or subsidiary of ABMC;
o a director who accepted or who has a family member who accepted any
payments from ABMC or any parent or subsidiary of ABMC in excess of
$60,000 during any period of twelve consecutive months within the three
years preceding the determination of independence, other than (i)
compensation for board or board committee service; (ii) payments arising
solely from investments in ABMC's securities; (iii) compensation paid to a
family member who is a non-executive employee of ABMC or a parent or
subsidiary of ABMC; (iv) benefits under a tax-qualified retirement plan,
or non-discretionary compensation; (v) loans from a financial institution
provided that the loans (1) were made in the ordinary course of business,
(2) were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable
transactions with the general public, (3) did not involve more than a
normal degree of risk or other unfavorable factors, and (4) were not
otherwise subject to the specific disclosure requirements of SEC
Regulation S-K, Item 404; (vi) payments from a financial institution in
connection with the deposit of funds or the financial institution acting
in an agency capacity, provided such payments were (1) made in the
ordinary course of business; (2) made on substantially the same terms as
those prevailing at the time for comparable transactions with the general
public; and (3) not otherwise subject to the disclosure requirements of
SEC Regulation S-K, Item 404; or (vii) loans permitted under Section 13(k)
of the Act;
o a director who is a family member of an individual who is, or at any time
during the past three years was, employed by ABMC or by any parent or
subsidiary of ABMC as an executive officer;
o a director who is, or has a family member who is, a partner in, or a
controlling shareholder or an executive officer of, any organization to
which ABMC made, or from which ABMC received, payments for property or
services in the current or any of the past three fiscal years that exceed
5% of the recipient's consolidated gross revenues for that year, or
$200,000, whichever is more, other than (i) payments arising solely from
investments in the company's securities; or (ii) payments under
non-discretionary charitable contribution matching programs;
o a director who is, or has a family member who is, employed as an executive
officer of another entity where at any time during the past three years
any of the executive officers of ABMC serve on the compensation committee
of such other entity; or
o a director who is, or has a family member who is, a current partner of
ABMC's outside auditor, or was a partner or employee of ABMC's outside
auditor who worked on ABMC's audit at any time during any of the past
three years.
The Board of Directors has determined that Anthony G. Costantino, Daniel
W. Kollin, Richard P. Koskey and Carl A. Florio, a majority of the Board of
Directors, are independent directors under NASD's rules.
In accordance with NASD's rules, independent directors meet in executive
sessions when required in conjunction with regularly schedule meeting of the
Board of Directors, outside of the presence of non-independent directors.
NASD rules, as well as SEC rules, impose additional independence
requirements for all members of the Audit Committee. Specifically, in addition
to the independence requirements discussed above, independent audit committee
members must: (1) not accept, directly or indirectly, any consulting, advisory,
or other compensatory fees from ABMC or any subsidiary of ABMC other than in the
member's capacity as member of the Board of Directors and any Board of
Directors' committee and (2) not be an affiliated person of ABMC or any
subsidiary of ABMC.
7
Audit Committee Financial Expert
At least one member of the Audit Committee must be financially
sophisticated, in that he or she has past employment experience in finance or
accounting, requisite certification in accounting, or other comparable
experience or background which results in the individual's financial
sophistication, including but not limited to being or having been a chief
executive officer, chief financial officer or other senior officer with
financial oversight responsibilities. The Board has determined that independent
board members Mr. Koskey and Mr. Florio both meet these requirements.
Committees of the Board of Directors
The Board of Directors of ABMC has established the following committees:
Nominating
The Nominating Committee currently consists of three members, all of whom
the Board has determined are independent as defined by NASD listing requirements
and SEC rules and regulations. Members of the Nominating Committee are Carl A.
Florio, Daniel W. Kollin, and Anthony G. Costantino. Mr. Florio serves as the
Chairman of this Committee. The nominating committee is governed by a charter it
has adopted. The charter was filed as Exhibit B to the Company's Proxy Statement
filed on May 12, 2004 with the Securities and Exchange Commission. The purpose
of the Nominating Committee is to review, and make recommendations related to,
qualified candidates for election to the Board of Directors. Nominations may be
made by any member of the Board of Directors, or by any shareholder entitled to
vote for the election of directors. Nominations made by shareholders for the
next Annual Meeting must be made in writing and received by the Company by
January 15, 2007, at the following address: Attention Corporate Secretary,
American Bio Medica Corporation, 122 Smith Road, Kinderhook, New York, 12106.
The nominating committee will consider all candidates identified through the
processes described above, whether identified by the committee or by a
shareholder, and will evaluate each of them on the same basis. The Nominating
Committee met one time in the fiscal year ended December 31, 2005 and the slate
of Directors and their terms for this Proxy were determined.
Compensation and Option Committees
The Compensation 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. The Company's Option Committee is a
sub-committee of the Compensation Committee and administers the Company's stock
option plans. The Compensation and Option Committees met formally twice, and met
informally several times throughout the fiscal year ended December 31, 2005. All
of the members attended 100% of the formal meetings held by the Compensation and
Option Committees.
As of the date of this report, the Compensation and Option Committees were
comprised of board members Daniel W. Kollin, Richard P. Koskey and Carl A.
Florio, all of whom the Board has determined are independent, as defined by NASD
listing rules and SEC rules and regulations. Mr. Kollin serves as the Chairman
of this Committee.
Compensation Committee's Report
The compensation of the Company's executive officers and key managers
("executives") is reviewed and approved annually by the Board of Directors. In
addition to reviewing and approving executives' salaries and bonus arrangements,
the Compensation Committee establishes policies and guidelines for other
benefits.
8
Compensation Policies and Procedures Applicable to Executives for the fiscal
year ended December 31, 2005
General. Compensation of the Company's executives is intended to attract,
retain and reward 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 Compensation Committee
utilizes subjective criteria for evaluation of individual performance and relies
substantially on the executives in doing so. The Committee 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 bonus program based upon profitability and the market value of
the Company's securities.
Cash 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 which the
Company expects to compete for executive talent and with reference to the
revenues, gross profits and other financial criteria of the Company. The
Committee also assesses subjective qualitative factors to discern a particular
executive's relative value to the corporate enterprise in establishing base
salaries. During the fiscal year ended December 31, 2005, the salary of both the
Chief Executive Officer and the Chief Financial Officer were established in
their employment agreements.
Bonus Programs. The Company is currently evaluating bonus programs to
compensate its executive officers, senior management and mid-level managers.
Such a bonus program will be based upon the Company's sales and profitability
and the market value of the Company's securities. In the past, the Company has
utilized stock options as a form of long-term incentive compensation, however
going forward the Company does not plan to widely issue stock options to its
employees, officers or directors, rather the issuance of stock options will be
reserved for unique circumstances.
Compensation of the CEO. In reviewing and approving Mr. Cipkowski's
compensation for the fiscal year ended December 31, 2005, the Board of Directors
considered the same criteria detailed herein with respect to executives in
general. Mr. Cipkowski's base annual salary was below the midpoint of base
compensation for CEOs of comparable companies. Mr. Cipkowski's annual salary
throughout the fiscal year ended December 31, 2005 was $180,000. Mr. Cipkowski
entered into an employment agreement with the Company on December 29, 2005. The
employment agreement automatically renews unless 60 days advance written notice
is given by either side and provides for an annual base salary of $198,000
beginning January 1, 2006, a car allowance, health benefits and participation in
a management bonus program, if such a program is adopted. No stock options were
issued to Mr. Cipkowski in the fiscal year ended December 31, 2005.
Other Executive Management Compensation. Keith E. Palmer, the Company's
Chief Financial Officer and Executive Vice President of Finance received a base
annual salary of $130,000 throughout the fiscal year ended December 31, 2005.
Mr. Palmer entered into an employment agreement with the Company on December 28,
2005. The employment agreement automatically renews unless 60 days advance
written notice is given by either side and provides for an annual base salary of
$143,000 beginning January 1, 2006, a car allowance, health benefits and
participation in a management bonus program, if such a program is adopted. Mr.
Palmer received a stock option grant covering 50,000 common shares on March 16,
2005. This option vested 100% on December 14, 2005. Martin R. Gould, the
Company's Chief Science Officer and Executive Vice President of Technology is
currently an at-will employee and receives an annual salary of $130,000. Mr.
Gould received a stock option grant covering 20,000 common shares on June 7,
2005. This option vested 100% on December 14, 2005.
The Compensation Committee
Daniel W. Kollin, Chairman
Richard P. Koskey
Carl A. Florio
9
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 Audit Committee
formally met six times and informally met several times in the fiscal year ended
December 31, 2005. The Audit Committee charter requires four Audit Committee
meeting per fiscal year. Members Koskey and Florio attended 100% of the meeting
while member Costantino attended 66% of the meetings.
As of the date of this report, the Audit Committee is comprised of three
members, all of whom the Board has determined are independent directors, (as
independence is defined in Rule 4200(a)(15) of the National Association of
Securities Dealers ("NASD") listing standards, as applicable and as may be
modified or supplemented), as required by Rule 4350(d)(2) of the NASD listing
standards. Members of the Audit Committee are Richard P. Koskey, Carl A. Florio
and Anthony G. Costantino. Mr. Koskey serves as the Chairman of this Committee.
The Board of Directors has adopted an Audit Committee charter, which was
previously filed as an Exhibit to the Company's Proxy Statement filed on August
27, 2001 with the Securities and Exchange Commission. The Audit Committee
Charter was amended in April 2004 and the revised charter was filed as Exhibit A
to the Company's Proxy Statement filed on May 12, 2004 with the Securities and
Exchange Commission.
Audit Committee Report
The Audit Committee reviews the Company's financial reporting process on
behalf of the Board. Management has the primary responsibility for the financial
statements and the reporting process. The Company's independent public
accountants are responsible for expressing an opinion on the conformity of the
Company's audited financial statements to generally accepted accounting
principles upon completion of their audit.
In this context, the Audit Committee reviewed and discussed with
management and the independent public accountants, the audited financial
statements for the fiscal year ended December 31, 2005 (the "Audited Financial
Statements"). The Audit Committee has discussed with the independent public
accountants the matters required to be discussed by Statement on Auditing
Standards No. 61 (Codification of Statements on Auditing Standards, AU ss. 380)
as may be modified or supplemented. In addition, the Audit Committee has
received the written disclosures and the letter from the independent public
accountants required by Independence Standards Board Standard No.1 (Independence
Standards Board Standard No.1, Independence Discussions with Audit Committees),
as may be modified and supplemented, and has discussed with the independent
public accountants their independence from the Company and its management.
Based on reviews and discussions with the independent public accountants,
the Audit Committee recommended to the Board of Directors that the Audited
Financial Statements be included in the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 2005, for filing with the Securities and
Exchange Commission.
The Audit Committee members do not serve as professional accountants or
auditors and their functions are not intended to duplicate or to certify the
activities of management and the independent auditors. The Committee serves a
board-level oversight role where it receives information from, consults with and
provides its views and directions to, management and the independent public
accountants on the basis of the information it receives and the experience of
its members in business, financial and accounting matters.
The Audit Committee
Richard P. Koskey, Chairman
Carl A. Florio
Anthony G. Costantino
10
Communications with Directors and Committees and Attendance at Annual Meetings
Shareholders may communicate with members of the Company's Board of
Directors and its Committees by writing to American Bio Medica Corporation, 122
Smith Road, Kinderhook, New York 12106, Attn: Corporate Secretary. The Corporate
Secretary will disseminate the communication(s) to the appropriate
individual(s).
Directors are expected to prepare themselves for and attend all meetings
of the Board of Directors, the Annual Meeting of Shareholders and the meetings
of the committees on which they serve, with the understanding that on occasion a
director may be unable to attend a meeting. All of the members of our Board of
Directors attended the 2005 Annual Meeting of Shareholders.
Additional Executive Officers and Senior Management
In addition to Mr. Cipkowski, our Chief Executive Officer, and Mr.
Jaskiewicz, our President, both referenced earlier in this statement, the
following table sets forth the names, ages, positions/offices held, the term of
the positions/offices held of additional executive officers and senior
management.
Martin R. Gould 54 CSO, Exec Vice Pres., Technology 1998
Keith E. Palmer 45 CFO, Exec. Vice Pres. Finance, Treasurer 2000
Todd Bailey 35 Vice President, Sales & Marketing 2001
Dr. Henry J. Wells, Ph.D. 75 Vice President, Product Development 1998
Martin R. Gould joined us in 1998. He was appointed our Executive Vice
President, Technology in 2003 and currently also services as our Chief Science
Officer. Prior to becoming our CSO, he was our Vice President of Technology. Mr.
Gould is a biomedical scientist with more than 30 years of experience in the
diagnostic and chemical fields. He has an extensive background in research and
development, manufacturing, quality control/assurance, as well as business
development and sales and marketing. Mr. Gould served as Vice President and
General Manager of Neogen Corp. (NASDAQ:NEOG) until 1997. Mr. Gould received a
Masters in Biomedical Science and Biomedical Engineering from Drexel University
in 1982, and a BS degree from Delaware Valley College in 1973.
Keith E. Palmer joined us in October 2000 as our Vice President, Finance, Chief
Financial Officer and Treasurer and served as a member of our Board of Directors
from October 2003 until June 2004. He is a Certified Public Accountant with over
20 years experience in accounting, finance, strategic planning, and merger and
acquisitions. From 1998 until joining us, Mr. Palmer was Director of Finance and
Controller of Matthew Bender, a division of Lexis Publishing, a legal publisher.
At Matthew Bender he was responsible for management of financial reporting and
analysis, accounting and control, strategic planning and numerous Finance and
Operational integration efforts. Mr. Palmer received his MBA in Finance from
Sage Colleges in 1995 and his BBA in Accounting from Siena College in 1983.
Todd Bailey joined us in April 2001 as a Director of Business Development and
subsequently was promoted to Director of National Accounts. In September 2003,
he was appointed Vice President of Sales & Marketing. Prior to joining us, Mr.
Bailey was Substance Abuse Account Manager for Roche Diagnostics Corporation
where he was responsible for territory sales of point-of-collection tests for
drugs of abuse to Fortune 500 manufacturers and state agencies. Mr. Bailey
received a B.S. in communications from St. Cloud University in 1994.
11
Henry J. Wells, Ph.D. joined us as a contract chemist in 1995. In 1998 he became
a full-time employee as our Vice President of Product Development. From 1990 to
1998, Dr. Wells worked as a contract chemist with the title of Vice President
Science and Technology for New Horizons Diagnostics, Inc. where he adapted
immuno-chemical technologies for detection of infectious diseases. Dr. Wells
earned his Ph.D. in Biochemistry from the University of Pittsburgh in 1966, his
M.A. from University of Pennsylvania in 1972 (honorary) and his B.S. in
Chemistry from the University of Pittsburgh in 1958.
Executive Compensation
The following table sets forth for fiscal years ended December 31, 2005,
December 31, 2004, and December 31, 2003, the compensation paid by the Company
to its Chief Executive Officer(s) and any other executive officers who earned in
excess of $100,000 (the "Named Officers") based on salary and bonus.
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards
------------------------------------------------------------ ----------------------
Other Annual Securities Underlying
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) Options/SARs (#)
--------------------------- ---- ---------- --------- ---------------- ---------------------
Stan Cipkowski(1) 12/31/05 $180,000 $ 0 $ 8,400(2) 0
Chief Executive Officer 12/31/04 $180,000 $ 0 $ 0 338,500(3)
12/31/03 $186,923(4) $ 0 $ 0 0
Keith E. Palmer 12/31/05 $130,000 $ 0 $ 8,200(2) 50,000
Chief Financial Officer 12/31/04 $130,000 $ 0 $ 0 0
Executive Vice President 12/31/03 $135,000(5) $10,000 $ 0 50,000
Finance
Martin R. Gould 12/31/05 $130,000 $ 6,300(2) 20,000(6)
Chief Science Officer 12/31/04 $129,385(7) $ 0 $ 0 10,000(8)
Executive Vice President 12/31/03 $109,154(9) $ 0 $ 0 150,000
Technology
Douglas Casterlin(10) 12/31/04 $146,326(11) $ 0 $ 0 0
Executive Vice-President 12/31/03 $145,384(12) $10,000 $ 0 0
Operations
Donal V. Carroll(13) 12/31/04 $ 0 $ 0 $ 1,500(14) 0
Chief Executive Officer 12/31/03 $ 0(15) $ 0 $ 3,000(14) 329,000(16)
Gerald A. Moore(17) 12/31/03 $170,000(18) $10,000 $ 7,500(2) 75,000(19)
Chief Executive Officer
12
(1) Mr. Cipkowski was appointed Chief Executive Office in September 2004 at an
annual salary of $180,000. Previously he served as an Executive Vice
President of the Company until July 2003. From July 2003 until September
2004, he was an employee of the Company.
(2) Car Allowance.
(3) Mr. Cipkowski's option grant representing 338,500 common shares issued to
him on June 29, 1999 at an exercise price of $2.50 naturally expired on
June 29, 2004. Mr. Cipkowski was issued a new grant representing 338,500
common shares on June 30, 2004. This option vested 100% on June 30, 2005.
(4) Mr. Cipkowski's actual annual salary was $180,000. The additional amount
in this figure is due to timing of pay period within the year.
(5) Mr. Palmer's actual annual salary is $130,000. The additional amount in
this figure is due to timing of pay periods within the year.
(6) Mr. Gould's option grant representing 20,000 common shares issued to him
on June 6, 2000 at an exercise price of $1.37 naturally expired on June 6,
2005. Mr. Gould was issued a new grant representing 20,000 common shares
on June 7, 2005. This option vested 100% on December 14, 2005.
(7) Mr. Gould's annual salary was increased effective January 1, 2004 from
$114,000 to $130,000.
(8) Mr Gould's option grant representing 10,000 common shares issued to him on
May 12, 1999 at an exercise price of $2.50 naturally expired on May 12,
2004. Mr. Gould was issued a new grant representing 10,000 common shares
on June 8, 2004. This option vested 100% on May 13, 2005.
(9) Mr. Gould's actual annual salary through August 2003 was $102,000. It was
increased in September 2003 to $114,000.
(10) Mr. Casterlin resigned as the Company's Executive Vice President in
January 2004 at an annual salary of $140,000. No amounts were paid, and no
securities were issued to Mr. Casterlin in 2005 and no information is
required.
(11) Mr. Casterlin was to be paid severance through March 31, 2005, however Mr.
Casterlin elected to be paid in a lump sum payout of $127,000, paid in
three monthly installments in 2004.
(12) Mr. Casterlin's actual annual salary in 2003 was $140,000. The additional
amount in this figure is due to timing of pay periods within the year
(13) Mr. Carroll was appointed CEO in October 2003 and subsequently removed
from the position of CEO in January 2004. He remained a member of our
Board of Directors until June 2004. No amounts were paid, and no
securities were issued to Mr. Carroll in 2005 and therefore no information
is required.
(14) This amount was for Mr. Carroll's attendance at meetings of the Company's
Board of Directors.
(15) The Company had previously reported the amount of $32,000 as Mr. Carroll's
compensation in the fiscal year ending December 31, 2003, and that the
Company has not paid this amount to Mr. Carroll but accrued the amount on
the Company's books. This accrual was reversed in June 2004.
(16) 300,000 of these options were subsequently cancelled by the Company upon
Mr. Carroll's removal from the office of Chief Executive Officer.
(17) Mr. Moore resigned as the Company's Chairman, President and CEO in
September 2003 and was paid for his services through August 2003. No
amounts were paid, and no securities were issued to Mr. Moore in 2005
therefore no information is required.
(18) Mr. Moore's actual annual salary in 2003 was $180,000. Mr. Moore was paid
through August 2003. This amount also includes $50,000 that was paid to
Mr. Moore in 2003 for a portion of his 2002 salary that was deferred.
(19) These option grants were subsequently cancelled by the company in
September 2003.
13
Option Grants in Fiscal Year Ended December 31, 2005
The following table sets forth information concerning the grant of stock
options to the named executive officers during the fiscal year ended December
31, 2005:
Individual Grants
---------------------------------------------------
Number of % of Total
Shares Options
Underlying Granted to Exercise
Options Employees in Price Per Expiration
Name Granted Year(1) Share Date
---- ------- ------- ----- ----
Stan Cipkowski 0 0% -- --
Douglas Casterlin(2) 0 0% -- --
Keith E. Palmer(3) 50,000 26.4% $0.94 3/16/15
Donal V. Carroll(4) 0 0% -- --
Martin R. Gould(5) 20,000 10.6% $0.85 6/07/15
(1) The Company granted 189,500 options representing common shares to
employees in the fiscal year ended December 31, 2005.
(2) Mr. Casterlin resigned at Executive Vice President on January 30, 2004.
(3) Option vested 100% on December 14, 2005.
(4) Mr. Carroll was removed as Chief Executive Office on January 21, 2004.
(5) Mr Gould's option grant representing 20,000 common shares issued to him on
June 6, 2000 at an exercise price of $1.37expired on June 6, 2005. Mr.
Gould was issued a new grant representing 20,000 common shares on June 7,
2005. This option vested 100% on December 14, 2005.
Aggregated Option Exercise in the Fiscal Year Ended December 31, 2005 and Fiscal
Year-End Option Values
The following table sets forth information concerning the exercise of
stock options during the fiscal year ended December 31, 2005 by the named
executive officers, and their options outstanding at fiscal year end.
Aggregate Option/SAR Exercises in Fiscal Year and TP-End Option/SAR Values
Number of Securities Underlying Value of Unexercised
Unexercised Options/SARs at In-the Money Options/SARs
FY-End (#) at FY-End ($)(1)
Shares ------------------------------- -------------------------
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
Stan Cipkowski 0 $ 0 838,500 0 $ 72,695 $ 0
Douglas Casterlin(2) 0 $ 0 300,000 0 $ 10,500 $ 0
Keith E. Palmer 0 $ 0 200,000 0 $ 37,000 $ 0
Donal V. Carroll(3) 0 $ 0 29,000 0 $ 3,480 $ 0
Martin R. Gould 0 $ 0 360,000 0 $ 40,600 $ 0
14
(1) Value of Unexercised In-The-Money Options at Fiscal Year End is
calculated by using the high sale price of the common shares on
December 30, 2005 which was $1.15, less the exercise price of the
in-the-money exercisable options which is then multiplied by the
number of common shares covered under the option(s).
(2) Mr. Casterlin resigned as Executive Vice President on January 30,
2004
(3) Mr. Carroll was removed from the office of CEO on January 21, 2004.
Certain Relationships and Related Transactions
During the fiscal years ended December 31, 2005 and December 31, 2004, the
Company paid an aggregate of $125,000 and $113,000 respectively, to Edmund
Jaskiewicz, the Company's President and Chairman of the Board of Directors, in
consideration of his services as patent and trademark counsel to the Company,
services as a member of its Board of Directors, and reimbursed expenses related
to same.
During the fiscal year ended December 31, 2005, the Company paid an
aggregate of $151,000 to one of our vendors for products and services. This
amount was related to the vendor's assembly of our products. The spouse of our
Chief Scientific Officer, Martin Gould, owns 50% of this vendor, which is a
private company. The amounts paid to the vendor in fiscal year ended December
31, 2004 were not material, as the vendor did not provide us with the assembly
services noted above in 2004.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the 1934 Act requires the Company's executive 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"). Executive
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 as of the date of this report, all executive officers, directors and
greater than ten percent beneficial holders have complied with all Section 16(a)
requirements.
Proposal No. 2
Directors' Proposal to Amend and Restate the Company's Bylaws to Classify the
Board of Directors
Article III, Section 2 of our current Amended and Restated Bylaws
(attached as Appendix A to this Proxy Statement) provides for the annual
election of all directors at annual meetings of shareholders. Any director may
tender their resignation at any time or be removed from their seat by a majority
vote of the shareholders. Any director who is elected in the interim to fill a
vacancy or a newly created directorship, shall hold office until the next annual
meeting of shareholders and until his successor has been elected and qualified.
The Board of Directors believes that the current bylaws of the Company
should be amended to allow for a classified or staggered board and they have
therefore unanimously adopted resolutions, subject to shareholder approval,
approving and declaring the advisability of an amendment to Article III, Section
2 of our Amended and Restated Bylaws to classify the Board of Directors.
15
Classified or staggered boards have been widely adopted and have a long
history in corporate law. Proponents of classified boards assert they promote
the independence of directors because directors elected for multi-year terms are
less subject to outside influence. Proponents of a staggered system for the
election of directors also believe it provides continuity and stability in the
management of the business and affairs of a company because a majority of
directors always have prior experience as directors of the company. This
continuity and long-term focus is particularly important to immunoassay device
manufacturing organizations, such as ours, where product and technology
development can be complex and long-term. Proponents further assert that
classified boards may enhance shareholder value by forcing an entity seeking
control of a target company to initiate arms-length discussions with the board
of a target company because the entity is unable to replace the entire board in
a single election.
On the other hand, some investors view classified boards as having the
effect of reducing the accountability of directors to shareholders because
classified boards limit the ability of shareholders to evaluate and elect all
directors on an annual basis. The election of directors is a primary means for
shareholders to influence corporate governance policies and to hold management
accountable for implementing those policies. In addition, opponents of
classified boards assert that a staggered structure for the election of
directors may discourage proxy contests in which shareholders have an
opportunity to vote for a competing slate of nominees and therefore may erode
shareowner value.
The Board of Directors has considered carefully the advantages and
disadvantages of implementing a classified board structure, and has concluded
that it would be in the best interests of the company and its shareholders to
implement the classified board. If Proposal No. 2 is approved by the majority
vote of the shareholders, Article III, Section 2 of our Amended and Restated
Bylaws will be revised. The new form of our Amended and Restated Bylaws is
attached as Appendix B to this Proxy Statement.
================================================================================
The Board of Directors unanimously recommends a vote "FOR" Proposal No. 2
================================================================================
Independent Public Accountants
The Company selected UHY LLP ("UHY") to be its independent public
accountants for the fiscal year ending December 31, 2005 and has selected UHY
LLP to continue to be its independent public accountants for the fiscal year
ending December 31, 2006. Representatives of UHY LLP are expected to attend the
Annual Meeting and will have an opportunity to make a statement and/or to
respond to appropriate questions from shareholders.
On August 3, 2004, PricewaterhouseCoopers LLP ("PwC") notified the Company
that it would resign as the Company's independent registered public accounting
firm upon completion of the review procedures regarding the interim financial
statements of the Company as of June 30, 2004 and for the three- and six-month
periods ended June 30, 2004. PwC completed its review procedures on August 10,
2004 and thereafter ceased its relationship as the independent registered public
accounting firm for the Company.
The reports of PwC on the Company's financial statements as of and for the
years ended December 31, 2003 and 2002 contained no adverse opinion or
disclaimer of opinion and were not modified or qualified as to uncertainty,
audit scope, or accounting principle, except that their report for the year
ended December 31, 2002 contained explanatory language regarding substantial
doubt about the Company's ability to continue as a going concern. A decision to
dismiss PwC was not recommended or approved by the audit committee or other
committee of the board of directors or the board of directors of the Registrant
because PwC resigned.
During the years ended December 31, 2003 and 2002 and through August 10,
2004, there were no disagreements with PwC on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, which disagreements if not resolved to the satisfaction of PwC would
have caused them to make reference thereto in their reports on the financial
statements for such years.
16
The Company filed a current report on Form 8-K regarding this matter on
August 10, 2004, that was subsequently amended, and it is incorporated herein by
reference.
On October 14, 2004 the Company engaged UHY to serve as the Company's
independent registered public accounting firm for the fiscal year ending
December 31, 2004. UHY's engagement as the Company's new independent public
accountants was effective for the fiscal quarter ending September 30, 2004. The
Company's engagement of UHY was approved by its Audit Committee. The Company
filed a current report on Form 8-K regarding this matter on October 18, 2004,
and it is incorporated herein by reference.
Audit fees
The aggregate fees billed by UHY to the Company for the fiscal years ended
December 31, 2005 and December 31, 2004, for the audit of financial statements
and review of financial statements included in the Company's Form 10-QSB, or
services that were normally provided by UHY in connection with statutory or
regulatory filings or engagements were $87,028 and $72,197, respectively.
No fees were billed by PwC in the fiscal year ended December 31, 2005 for
the audit of the Company's annual financial statements and review of financial
statements included in the Company's Form 10-QSB, or services that would
normally be provided by PricewaterhouseCoopers LLP in connection with statutory
and regulatory filings or engagements as PwC was no longer the Company's
independent registered public accounting firm. The aggregate fees billed by PwC
to the Company in the fiscal year ended December 31, 2004 for professional
services rendered for the audit of the Company's annual financial statements and
review of financial statements included in the Company's Form 10-QSB, or
services that were normally provided by PricewaterhouseCoopers LLP in connection
with statutory and regulatory filings or engagements for these fiscal years,
were $151,500
Audit Related Fees
There were no Audit Related Fees billed by UHY to the Company in the
fiscal years ended December 31, 2005 and December 31, 2004.
There were no Audit Related Fees billed by PwC to the Company in the
fiscal years ended December 31, 2005 or December 31, 2004.
Tax Fees
There were no fees billed by UHY to the Company in the fiscal years ended
December 31, 2005 or December 31, 2004 for professional services related to tax
compliance, tax advice, and tax planning.
The aggregate fees bill by PwC to the Company in the fiscal years ended
December 31, 2005 and December 31, 2004 for professional services related to tax
compliance, tax advice and tax planning were $0 and $19,985, respectively. These
fees in fiscal year ended December 31, 2004 were for services related to the
preparation and filing of the Company's tax returns.
All Other Fees
There were no Other Fees billed by UHY in the fiscal year ended December
31, 2005 or December 31, 2004.
17
There were no Other Fees billed by PwC in the fiscal years ended December
31, 2005 and December 31, 2004.
There were no other fees billed by UHY and/or PwC for services rendered to
the Company other than the services described herein and the Audit Committee has
considered whether the provision of these services is compatible with
maintaining the independence of our public accountants. Pursuant to Rule
2-01(c)(i), prior to the engagement of an independent public accountant by the
Company to render audit or non-audit services, the Company's Audit Committee
approves the engagement. All of such services performed by UHY and PwC were so
approved.
Performance Graph
The following graph compares the cumulative total return for the periods
indicated for each of (a) the Company's common shares, (b) the Standard & Poors
500 Stock Index (the "S&P 500") and (c) the NASDAQ Medical Device Index.
Performance Graph
[THE FOLLOWING WAS DEPICTED AS A LINE GRAPH IN THE PRINTED MATERIAL]
[LINE CHART OMITTED]
12/31/01 12/31/02 12/31/03 12/31/2004 12/30/2005
-------- -------- -------- ---------- ----------
S & P 500 $ 100.00 $ 76.63 $ 96.85 $ 105.56 $ 108.73
Nasdaq Medical Device Index $ 100.00 $ 80.89 $ 119.67 $ 140.20 $ 153.93
American Bio Medica $ 100.00 $ 140.23 $ 173.56 $ 124.14 $ 127.59
Corporation
18
Other Matters
The Board of Directors is not aware of any matter to be presented for
action at the Annual Meeting other than the matters set forth herein. Should any
other matter requiring a vote of shareholders arise, the proxies confer upon the
person or persons entitled to vote the shares represented by such proxies the
authority to vote the proxies in their discretion.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Melissa A. Decker
--------------------------------
Melissa A. Decker
Corporate Secretary
April 26, 2006
19
APPENDIX A
AMENDED AND RESTATED BY-LAWS
of
AMERICAN BIO MEDICA CORPORATION
ARTICLE I.
THE CORPORATION
Section 1. Name. The legal name of this corporation (hereinafter called
the "Corporation") is AMERICAN BIO MEDICA CORPORATION.
Section 2. Offices. The Corporation shall have its principal office in the
State of New York. The Corporation may also have offices at such other places
within and without the United States as the Board of Directors may from time to
time appoint or the business of the Corporation may require.
Section 3. Seal. The corporate seal shall have inscribed thereon the name
of the Corporation, the year of its organization and the words "Corporate Seal,
New York". One or more duplicate dies for impressing such seal may be kept and
used.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. All meetings of the shareholders shall be
held at the principal office of the Corporation in the State of New York or at
such place, within or without the State of New York, as may be determined by the
Board of Directors and as may be designated in the notice of that meeting.
Section 2. Annual Meeting. The annual meeting of the shareholders of the
Corporation for the election of directors and the transaction of such other
business as may properly come before the meeting shall be held in June of each
year, or at such other time as is fixed in the notice of the meeting. If for any
reason any annual meeting shall not be held at the time herein specified, the
same may be held at any time thereafter upon notice, as herein provided, or the
business thereof may be transacted at any special meeting called for the
purpose.
Section 3. Special Meetings. Special meetings of the shareholders may be
called by the President whenever he deems it necessary or advisable. A special
meeting of the shareholders shall be called by the President whenever so
directed in writing by a majority of the entire Board of Directors or whenever
the holder of one-third (1/3) of the number of shares of the capital stock of
the Corporation entitled to vote at such meeting shall, in writing request the
same.
Section 4. Notice of Meetings; Waiver. Notice of the date, time and place
of the annual and of each special meeting of the shareholders shall be given to
each shareholder entitled to vote in person, electronically, by mail, or by
prepaid telegram. This notice shall be given not less than ten (10) and not more
than sixty (60) days before the date of each meeting. If mailed or telegraphed,
it should be directed to shareholder at the address last shown on the books of
the Corporation. No publication of the notice of meeting shall be required. A
shareholder may waive the notice of meeting by attendance, either in person or
by proxy, at the meeting, by electronic transmission, or by so stating in
writing, either before or after the meeting. Attendance at a meeting for the
express purpose of objecting that the meeting was not lawfully called or
convened shall not, however, constitute a waiver of notice. Except where
otherwise required by law, notice need not be given of any adjourned meeting of
the shareholders. Notice of the annual meeting and each special meeting of the
shareholders shall indicate that it is being issued by or at the direction of
the person or persons calling the meeting, and shall state the name and capacity
of each such person. Notice of each special meeting shall also state the purpose
or purposes for which it has been called. Neither the business to be transacted
at nor the purpose of the annual or any special meeting of the shareholders need
be specified in any written waiver of notice.
1
Section 5. Record Date for Shareholders. For the purpose of determining
the shareholders entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or other distribution or the allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion,
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than sixty
(60) days nor less than ten (10) days before the date of such meeting, nor more
then sixty (60) days prior to any other action. If no record date is fixed: (1)
the record date for determining shareholders entitled to notice of or to vote at
a meeting of shareholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if no notice is given, the day
on which the meeting is held; (2) the record date for determining shareholders
for any purpose other than that specified in subparagraph (1) shall be at the
close of business on the day on which the Board of Directors adopts a resolution
relating thereto. A determination of shareholders of record entitled to notice
of or to vote at any meeting of shareholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Proxy Representation. Every shareholder entitled to vote may
authorize another person or persons to act for him by proxy in all matters in
which a shareholder is entitled to participate, whether by waiving notice of any
meeting, voting or participating at a meeting, or expressing consent or dissent
without a meeting. Every proxy shall be voted or acted upon not later than
eleven months from its date unless such proxy provides for a longer period.
Every proxy shall be revocable at the pleasure of the shareholder executing it,
except as otherwise provided in Section 609 of the New York Business Corporation
Law or similar law.
Section 7. Presiding Officer.
(a) Meetings of the shareholders shall be presided
over by the Chairman of the Board of Directors,
or, if he or she is not present, by the Chief
Executive Officer, or if he or she is not
present, by the President, or if he or she is
not present, by a Vice-President, or if neither
the Chairman of the Board of Directors nor the
Chief Executive Officer nor the President nor a
Vice-President is present, by a chairman to be
chosen by a majority of the shareholders
entitled to vote at the meeting who are present
in person or by proxy. The Secretary of the
Corporation, or, in her or his absence, an
Assistant Secretary, shall act as secretary of
every meeting, but if neither the Secretary nor
an Assistant Secretary is present, the Chairman
of the Board of Directors shall choose any
person present to act as secretary of the
meeting.
(b) The chairman of the meeting shall have the
right and authority to prescribe such rules,
regulations and procedures and to do all such
acts and things as are necessary or desirable
for proper conduct of the meeting, including,
without limitation, the establishment of
procedures for the maintenance of order and
safety, limitations of the time allotted to
questions, or comments on the affairs of the
corporation taken up by any one shareholder,
restriction or entry to such meeting after the
time prescribed for the commencement thereof
and the openings and closing of the voting
pools.
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Section 8. Voting at Shareholder's Meetings. Each share of stock shall
entitle the holder thereof to one vote in person or by proxy for each share of
stock having voting rights registered in his or her name on the books of the
Corporation. A shareholder may vote his or her shares through a proxy appointed
by a written instrument signed by the shareholder or by a duly authorized
attorney-in-fact and delivered to the secretary of the meeting. No proxy shall
be valid after eleven (11) months from the date of its execution unless a longer
period is expressly provided. In the election of directors, a plurality of the
votes cast shall elect. Any other action shall be authorized by a majority of
the votes cast except where the New York Business Corporation Law prescribes a
different percentage of votes or a different exercise of voting power. In the
election of directors, and for any other action, voting need not be by ballot.
Section 9. Quorum and Adjournment. Except for a special election of
directors pursuant to Section 603 of the New York Business Corporation Law, the
presence, in person or by proxy, of the holders of a majority of the shares of
the stock of the Corporation outstanding and entitled to vote thereat shall be
requisite and shall constitute a quorum at any meeting of the shareholders. When
a quorum is once present to organize a meeting, it shall not be broken by the
subsequent withdrawal of any shareholders. If at any meeting of shareholders
there shall be less than a quorum so present, the shareholders present in person
or by proxy and entitled to vote thereat, may adjourn the meeting from time to
time until a quorum shall be present, but no business shall be transacted at any
such adjourned meeting except such as might have been lawfully transacted had
the meeting not adjourned.
Section 10. List of Shareholders.
(a) A complete list of the shareholders of the
Corporation entitled to vote at the ensuing
meeting shall be prepared by the Secretary, or
other officer of the Corporation having charge
of the Stock Transfer Books. This list shall be
certified by the officer of the Corporation
responsible for its preparation or by a
transfer agent. This list shall be available at
the meeting and shall be open to inspection by
any shareholder at any time during the meeting.
(b) The original Stocks Transfer Books shall be
prima facie evidence as to who are the
shareholders entitled to examine the list or to
vote at any meeting of the shareholders.
(c) Failure to comply with the requirements of this
section shall not affect the validity of any
action taken at any meetings of the
shareholders.
Section 11. Inspectors of Election. The Board of Directors, in advance of
any meeting shall appoint one or more inspectors of election to act at the
meeting or any adjournment thereof. Inspectors may, but need not, be officers or
employees of the Corporation. If an inspector or inspectors are not appointed,
the person presiding at the meeting may, and at the request of any shareholder
entitled to vote thereat shall, appoint one or more inspectors. In case any
person who may be appointed as an inspector fails to appear or act, the vacancy
may be filled by appointment made by the Board of Directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector before
entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The inspectors shall
determine the number of shares of stock outstanding and the voting power of
each, the shares of stock represented at the meeting, the existence of a quorum,
the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all shareholders. On request of the person presiding at
the meeting or any shareholder entitled to vote thereat, the inspector or
inspectors shall make a report in writing of any challenge, questions or matter
determined by him or them and execute a certificate of any fact found by him or
them. Any report or certificate made by the inspector or inspectors shall be
prima facie evidence of the facts stated and of the vote as certified by them.
3
Section 12. Action of the Shareholders Without Meetings. Any action which
may be taken at any annual or special meeting of the shareholders may be taken
without a meeting or written consent, setting forth the action so taken, signed
by the holders of all outstanding shares entitled to vote thereon. Written
consent thus given by the holders of all outstanding shares entitled to vote
shall have the same effect as a unanimous vote of the shareholders.
ARTICLE III
DIRECTORS
Section 1. Number of Directors. The number of directors shall be at least
three (3). The number of directors may be fixed from time to time by action of a
majority of the entire Board of Directors or of the shareholders at an annual or
special meeting, or, if the number of directors is not so fixed, the number
shall be three or shall be equal to the number of shareholders, whichever is
less. No decrease in the number of directors shall shorten the term of any
incumbent director.
Section 2. Election and Term. The initial Board of Directors shall be
elected by the incorporator and each initial director so elected shall hold
office until the first annual meeting of shareholders and his successor has been
elected and qualified. Thereafter, each director who is elected at an annual
meeting of shareholders, and each director who is elected in the interim to fill
a vacancy or a newly created directorship, shall hold office until the next
annual meeting of shareholders and until his successor has been elected and
qualified.
Section 3. Filling Vacancies, Resignation, and Removal. Any director may
tender his resignation at any time. Any director or the entire Board of
Directors may be removed, with or without cause, by vote of the shareholders. In
the interim between annual meetings of shareholders or special meetings of
shareholders called for the election of directors or for the removal of one or
more directors and for the filling of any vacancy in that connection, newly
created directorships and any vacancies in the Board of Directors, including
unfilled vacancies resulting from the resignation or removal of directors for
cause or without cause, may be filled by the vote of a majority of the remaining
directors then in office, although less than a quorum, or by the sole remaining
director.
Section 4. Qualifications and Powers. Each director shall be at least
eighteen years of age. A director need not be a shareholder, a citizen of the
United States or a resident of the State of New York. The business of the
Corporation shall be managed by the Board of Directors, subject to the
provisions of the Certificate of Incorporation. In addition to the powers and
authorities by these By-laws expressly conferred upon it, the Board may exercise
all such powers of the Corporations and do all such lawful acts and things as
are not by statute or by the Certificate of Incorporation or by these By-laws
directed or required to be exercised or done exclusively by the shareholders.
Section 5. Meetings. Meetings of the Board of Directors may be held either
within or without the State of New York. Meetings of the Board of Directors
shall be held at those times and places as are fixed from time to time by
resolution of the Board of Directors. Special meetings may be held at any time
upon call of the Chairman of the Board, the Chief Executive Officer, the
President, a Vice-President, or a majority of directors, upon written, notice
deposited in the U.S. mail or sent via facsimile. A meeting of the Board of
Directors may be held without notice immediately following the annual meeting of
the shareholders. Notice need not be given of regular meetings of the Board of
Directors if the times and places are fixed by resolution of the Board of
Directors, nor need notice be given of adjourned meetings. Regular meetings may
be held at any time without notice if all the directors are present or if,
before the meeting, those not present waive such notice in writing. Notice of a
meeting of the Board of Directors need not state the purpose of, nor the
business to be transacted at, any meeting.
4
Section 6. Quorum of Directors and Action by the Board. A majority of the
entire Board of Directors shall constitute a quorum except that when the entire
Board consists of one director, then one director shall constitute a quorum, and
except that when a vacancy or vacancies prevents such majority, a majority of
the directors in office shall constitute a quorum, provided that such majority
shall constitute at least one-third of the entire Board. A majority of the
directors present, whether or not they constitute a quorum, may adjourn a
meeting to another time and place. Except as herein otherwise provided, and
except as otherwise provided by the New York Business Corporation Law, the vote
of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board.
Section 7. Telephonic Meetings. Any member or members of the Board of
Directors, or of any committee designated by the Board, may participate in a
meeting of the Board, or any such committee, as the case may be, by means of
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time, and
participation in a meeting by such means shall constitute presence in person at
such meeting.
Section 8. Action Without a Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes or proceedings of the Board or committee.
Section 9. Compensation of Directors. By resolution of the Board of
Directors, the directors may be paid their expenses, if any, for attendance at
each regular or special meeting of the Board or of any committee designated by
the Board and may be paid a fixed sum for attendance at such meeting, or a
stated salary as director, or both. Nothing herein contained shall be construed
to preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor; provided however that directors who are also
salaried officers shall not receive fees or salaries as directors.
Section 10. Indemnification
(a) Any person who was, is, or is threatened to be
made a party to any action or proceeding,
whether civil or criminal (including an action
by or in the right of this Corporation or any
other corporation, partnership, joint venture,
trust, employee benefit plan or other
enterprise which any director or officer of
this Corporation served in any capacity at the
request of this Corporation), by reason of the
fact that he, his testator or intestate, is or
was a director or officer of this Corporation,
or served such other corporation, partnership,
joint venture, trust, employee benefit plan or
other enterprise in any capacity, shall be
indemnified by this Corporation against all
judgments, fines, amounts paid in settlement
and reasonable expenses, including attorneys'
fees actually and necessarily incurred in
connection with the defense or appeal of any
such action or proceeding, and against any
other amounts, expenses and fees similarly
incurred; provided that no indemnification
shall be made to or on behalf of any director
or officer where indemnification is prohibited
by applicable law. This right of
indemnification shall include the right of a
director or officer to receive payment from
this Corporation for expenses incurred in
defending or appealing any such action or
proceeding in advance of its final disposition;
provided that the payment of expenses in
advance of the final disposition of an action
or proceeding shall be made only upon delivery
to this Corporation of an undertaking by or on
behalf of the director or officer to repay all
amounts so advanced if it should be determined
ultimately that the director or officer is not
entitled to be indemnified. The preceding right
of indemnification shall be a contract right
enforceable by the director or officer with
respect to any claim, cause of action, action
or proceeding accruing or arising while this
by-law shall be in effect.
5
(b) Any indemnification provided for by this
Section shall be authorized in any manner
provided by applicable law or, in the absence
of such law:
(i) by the Board of Directors acting by a
quorum of Directors who are not parties
to such action or proceeding, upon a
finding that there has been no judgment
or other final adjudication adverse to
the Director or officer which establishes
that his acts were committed in bad faith
or were the result of active and
deliberate dishonesty and were material
to the cause of action so adjudicated, or
that he personally gained in fact a
financial profit or other advantage to
which he was not legally entitled, or
(ii) if a quorum under clause (i) is not
obtainable,
(1) by the Board upon the opinion in
writing of independent legal
counsel that indemnification is
proper in the circumstances because
there has been no such judgment or
other final adjudication adverse to
the director or officer, or
(2) by the shareholders upon a finding
that there has been no such
judgment or other final
adjudication adverse to the
director or officer.
(c) If a claim of indemnification is not paid in
full by the Corporation within ninety days
after a written claim has been received by the
Corporation, the claimant may at any time
thereafter bring suit against the corporation
to recover the unpaid amount of the claim and,
if successful in whole or in part, the claimant
shall also be entitled to recover the expenses
of prosecuting such claim.
(d) The rights conferred on any person under this
Section shall not be exclusive of any other
right which may exist under any statute,
provision of the Certificate of Incorporation,
by-law, agreement, vote of stockholders or
disinterested directors, or otherwise.
(e) Subject to the laws of New York, the
Corporation may maintain insurance, at its
expense, to protect itself and any director,
officer, employee or agent of the Corporation
against any expense, liability or loss of the
general nature contemplated by this section,
whether or not the Corporation would have the
power to indemnify such person against such
expense, liability or loss under the laws of
New York.
6
(f) It is the intent of the Corporation to
indemnify its officers and directors to the
fullest extent authorized by the laws of New
York as they now exist or may hereafter be
amended. If any portion of this Section shall
for any reason be held invalid or unenforceable
by judicial decision or legislative amendment,
the valid and enforceable provisions of this
Section will continue to be given effect and
shall be construed so as to provide the
broadest indemnification permitted by law.
ARTICLE IV
COMMITTEES
Section 1. In General. The Board of Directors, by a resolution or
resolutions adopted by a majority of the entire Board, may designate from among
its members an executive committee and other committees each consisting of one
or more directors. Each committee shall have all the authority of the Board of
Directors, except for: (1) submission to shareholders of any action that needs
shareholders' approval, (2) the filing of vacancies in the Board of Directors,
(3) the fixing of compensation of the directors for serving on the board or any
committee, (4) the amendment or repeal of these By-Laws, or the adoption of new
by-laws, and (5) the amendment or repeal of any resolution of the Board of
Directors which by its terms shall not be amendable or repealable.
Section 2. Executive Committee. Except as otherwise limited by the Board
of Directors or by these By-laws, the Executive Committee, if so designated by
the Board of Directors, shall have and may exercise, when the Board is not in
session, all the powers of the Board of Directors in the management of the
business and affairs of the Corporation, and shall have the power to authorize
the seal of the Corporation to be affixed to all papers which may require it.
The Board shall have the power at any time to change the membership of the
Executive Committee, to fill vacancies in it, or to dissolve it. The Executive
Committee may make rules for the conduct of its business and may appoint such
assistance as it shall from time to time deem necessary. A majority of the
members of the Executive Committee, if more than a single member, shall
constitute a quorum.
ARTICLE V
OFFICERS
Section 1. Number. The officers of the Corporation shall be a Chief
Executive Officer, a President, one or more Vice-Presidents, a Treasurer, and a
Secretary. In addition, there may be such subordinate officers as the Board of
Directors may deem necessary. Any person may hold two or more offices.
Section 2. Term of Office. The principal officers shall be chosen annually
by the Board of Directors at the first meeting of the Board of Directors
following the shareholders' annual meeting, or as soon as is conveniently
possible. Subordinate officers may be elected from time to time. Each officer
shall serve until his or her successor shall have been chosen and qualified.
Section 3. Removal. Any officer may be removed from office with or without
cause, at any time by the vote of the Board of Directors. Such removal shall not
prejudice the contract rights, if any, of the person so removed.
7
Section 4. Vacancies. Any vacancy in any office from any cause may be
filled for the unexpired portion of the term by the Board of Directors.
Section 5. Duties.
(a) Chief Executive Officer. The Chief Executive
Officer shall have general active management of
the business of the corporation, and in the
absence of the Chairman of the Board, shall
preside at all meetings of the shareholders and
the Board of Directors; and shall see that all
orders and resolutions of the Board of
Directors are carried into effect.
(b) President. The President, in the absence of the
Chairman of the Board, shall preside at all
meetings of the shareholders and at all meeting
of the Board of Directors. She or he shall have
general supervision of the affairs of the
Corporation, shall sign or countersign all
certificates, contracts, or other instruments
of the Corporation as authorized by the Board
of Directors, shall make reports to the Board
of Directors and shareholders, and shall
perform any and all other duties as are
incident to her or his office or are properly
required of him or her by the Board of
Directors.
(c) Vice-President. The Vice-Presidents, in the
order designated by the Board of Directors,
shall exercise the functions of the President
during the absence or disability of the
President. Each Vice-President shall have any
other duties as are assigned from time to time
by the Board of Directors.
(d) Secretary and Treasurer. The Secretary and the
Treasurer shall perform those duties as are
incident to their offices, or are properly
required of them by the Board of Directors, or
are assigned to them by the Certificate of
Incorporation or these By-Laws.
(e) Delegation. In case of the absence or
disability of any officer of the Corporation
and of or person authorized to act in his or
her place during such period of absence or
disability, the Board of Directors may from
time to time delegate the powers and duties of
such officer to any other officer or to any
other director or to any other person whom it
may select.
ARTICLE VI
CERTIFICATES OF SHARES
Section 1. Form. The interest of each shareholder of the Corporation shall
be evidenced by certificates for shares of stock, certifying the number of
shares represented thereby and in such form not inconsistent with the
Certificate of Incorporation of the Corporation as the Board of Directors may
from time to time prescribe. Such shares shall be approved by the Board of
Directors, and shall be signed by the President or a Vice-President and by the
Secretary or the Treasurer and shall bear the seal of the Corporation and shall
not be valid unless signed and sealed. Certificates countersigned by a duly
appointed transfer agent and/or registered by a duly appointed registrar shall
be deemed to be so signed and sealed whether the signatures be manual or
facsimile signatures and whether the seal be a facsimile seal or any other form
of seal. All certificates shall be consecutively numbered and the name of the
person owning the shares represented thereby, his residence, with the number of
such shares and the date of issue, shall be entered on the Corporation's books.
All certificates surrendered shall be cancelled and no new certificates issued
until the former certificates for the same number of shares shall have been
surrendered and cancelled, except as provided for herein.
8
In case any officer or officers who shall have signed or whose facsimile
signature or signatures shall have been affixed to any such certificate or
certificates, shall cease to be such officer or officers of the Corporation
before such certificate or certificates shall have been delivered by the
Corporation, may nevertheless be adopted by the Corporation, and may be issued
and delivered as though the person or persons who signed such certificates, or
whose facsimile signature or signatures shall have been affixed thereto, had not
ceased to be such officer or officers of the Corporation.
Any restriction on the transfer or registration of transfer of any shares
of stock of any class or series shall be noted conspicuously on the certificate
representing such shares.
Section 2. Subscription for Shares. Unless the subscription agreement
provides otherwise, subscriptions for shares, whether made before or after the
formation of the Corporation, shall be paid in full at such time, or in such
installments and at such times, as shall be determined by the Board of
Directors. All calls for payments on subscriptions shall be uniform as to all
shares of the same class or of the same series.
Section 3. Addresses of Shareholders. Every shareholder shall furnish the
Corporation with an address to which notices of meetings and all other notices
may be served upon or mailed to him, and in default thereof notices may be
addressed to him at his last known post office address.
Section 4. Stolen, Lost, Destroyed Certificates. No certificate for shares
of stock in the Corporation shall be issued in place of any certificate alleged
to have been lost, destroyed, or stolen except on production of evidence,
satisfactory to the Board of Directors, of that loss, destruction or theft, and,
if the Board of Directors so requires, upon the furnishing of an indemnity bond
in such amount (but not to exceed twice the value of the shares represented by
the certificate) and with such terms and surety as the Board of Directors in its
discretion may require.
Section 5. Transfers of Shares. Upon compliance with all provisions
restricting the transferability of shares, if any, transfer of stock shall be
made only upon the books of the Corporation by the holder in person or by his
attorney thereunto authorized by power of attorney duly filed with the Secretary
of the Corporation or with a transfer agent or registrar, if any, upon the
surrender and cancellation of the certificates or certificates for such shares
properly endorsed and the payment of all taxes due thereon. The Board of
Directors may appoint one or more suitable banks and/or trust companies as
transfer agents and/or registrars of transfers, for facilitating transfers of
any class or series of stock of the Corporation by the holders thereof under
such regulations as the Board of Directors may from time to time prescribe. Upon
such appointment being made all certificates of stock of such class or series
thereafter issued shall be countersigned by one of such transfer agents and/or
registrars of transfers, and shall not be valid unless so countersigned.
ARTICLE VII
DIVIDENDS AND FINANCE
Section 1. Dividends. Unless otherwise specified in the Certificate or
Incorporation, the Board of Directors shall have the power to declare and pay
dividends or to make other distributions.
Section 2. Fiscal Year. The fiscal year of the Corporation shall end on
the last day of December in each year and shall begin on the next succeeding
day, or shall be for such other period as the Board of Directors may designate.
9
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 1. Books and Records. Subject to the New York Business Corporation
Law, the Corporation may keep its books and accounts outside the State of New
York.
Section 2. Amendments of By-Laws. The By-Laws may be adopted, amended or
repealed by a majority of the shareholders entitled to vote in the election of
any directors. By-Laws may also be adopted, amended or repealed by a majority of
the Board of Directors. Any By-Laws adopted by the Board of Directors of the
Corporation may be amended or repealed by the shareholders entitled to vote, as
specified herein.
10
APPENDIX B
AMENDED AND RESTATED BY-LAWS
of
AMERICAN BIO MEDICA CORPORATION
ARTICLE I.
THE CORPORATION
Section 1. Name. The legal name of this corporation (hereinafter called
the "Corporation") is AMERICAN BIO MEDICA CORPORATION.
Section 2. Offices. The Corporation shall have its principal office in the
State of New York. The Corporation may also have offices at such other places
within and without the United States as the Board of Directors may from time to
time appoint or the business of the Corporation may require.
Section 3. Seal. The corporate seal shall have inscribed thereon the name
of the Corporation, the year of its organization and the words "Corporate Seal,
New York". One or more duplicate dies for impressing such seal may be kept and
used.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. All meetings of the shareholders shall be
held at the principal office of the Corporation in the State of New York or at
such place, within or without the State of New York, as may be determined by the
Board of Directors and as may be designated in the notice of that meeting.
Section 2. Annual Meeting. The annual meeting of the shareholders of the
Corporation for the election of directors and the transaction of such other
business as may properly come before the meeting shall be held in June of each
year, or at such other time as is fixed in the notice of the meeting. If for any
reason any annual meeting shall not be held at the time herein specified, the
same may be held at any time thereafter upon notice, as herein provided, or the
business thereof may be transacted at any special meeting called for the
purpose.
Section 3. Special Meetings. Special meetings of the shareholders may be
called by the President whenever he deems it necessary or advisable. A special
meeting of the shareholders shall be called by the President whenever so
directed in writing by a majority of the entire Board of Directors or whenever
the holder of one-third (1/3) of the number of shares of the capital stock of
the Corporation entitled to vote at such meeting shall, in writing request the
same.
Section 4. Notice of Meetings; Waiver. Notice of the date, time and place
of the annual and of each special meeting of the shareholders shall be given to
each shareholder entitled to vote in person, electronically, by mail, or by
prepaid telegram. This notice shall be given not less than ten (10) and not more
than sixty (60) days before the date of each meeting. If mailed or telegraphed,
it should be directed to shareholder at the address last shown on the books of
the Corporation. No publication of the notice of meeting shall be required. A
shareholder may waive the notice of meeting by attendance, either in person or
by proxy, at the meeting, by electronic transmission, or by so stating in
writing, either before or after the meeting. Attendance at a meeting for the
express purpose of objecting that the meeting was not lawfully called or
convened shall not, however, constitute a waiver of notice. Except where
otherwise required by law, notice need not be given of any adjourned meeting of
the shareholders. Notice of the annual meeting and each special meeting of the
shareholders shall indicate that it is being issued by or at the direction of
the person or persons calling the meeting, and shall state the name and capacity
of each such person. Notice of each special meeting shall also state the purpose
or purposes for which it has been called. Neither the business to be transacted
at nor the purpose of the annual or any special meeting of the shareholders need
be specified in any written waiver of notice.
1
Section 5. Record Date for Shareholders. For the purpose of determining
the shareholders entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or other distribution or the allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion,
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than sixty
(60) days nor less than ten (10) days before the date of such meeting, nor more
then sixty (60) days prior to any other action. If no record date is fixed: (1)
the record date for determining shareholders entitled to notice of or to vote at
a meeting of shareholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if no notice is given, the day
on which the meeting is held; (2) the record date for determining shareholders
for any purpose other than that specified in subparagraph (1) shall be at the
close of business on the day on which the Board of Directors adopts a resolution
relating thereto. A determination of shareholders of record entitled to notice
of or to vote at any meeting of shareholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Proxy Representation. Every shareholder entitled to vote may
authorize another person or persons to act for him by proxy in all matters in
which a shareholder is entitled to participate, whether by waiving notice of any
meeting, voting or participating at a meeting, or expressing consent or dissent
without a meeting. Every proxy shall be voted or acted upon not later than
eleven months from its date unless such proxy provides for a longer period.
Every proxy shall be revocable at the pleasure of the shareholder executing it,
except as otherwise provided in Section 609 of the New York Business Corporation
Law or similar law.
Section 7. Presiding Officer.
(a) Meetings of the shareholders shall be presided
over by the Chairman of the Board of Directors,
or, if he or she is not present, by the Chief
Executive Officer, or if he or she is not
present, by the President, or if he or she is
not present, by a Vice-President, or if neither
the Chairman of the Board of Directors nor the
Chief Executive Officer nor the President nor a
Vice-President is present, by a chairman to be
chosen by a majority of the shareholders
entitled to vote at the meeting who are present
in person or by proxy. The Secretary of the
Corporation, or, in her or his absence, an
Assistant Secretary, shall act as secretary of
every meeting, but if neither the Secretary nor
an Assistant Secretary is present, the Chairman
of the Board of Directors shall choose any
person present to act as secretary of the
meeting.
(b) The chairman of the meeting shall have the
right and authority to prescribe such rules,
regulations and procedures and to do all such
acts and things as are necessary or desirable
for proper conduct of the meeting, including,
without limitation, the establishment of
procedures for the maintenance of order and
safety, limitations of the time allotted to
questions, or comments on the affairs of the
corporation taken up by any one shareholder,
restriction or entry to such meeting after the
time prescribed for the commencement thereof
and the openings and closing of the voting
pools.
2
Section 8. Voting at Shareholder's Meetings. Each share of stock shall
entitle the holder thereof to one vote in person or by proxy for each share of
stock having voting rights registered in his or her name on the books of the
Corporation. A shareholder may vote his or her shares through a proxy appointed
by a written instrument signed by the shareholder or by a duly authorized
attorney-in-fact and delivered to the secretary of the meeting. No proxy shall
be valid after eleven (11) months from the date of its execution unless a longer
period is expressly provided. In the election of directors, a plurality of the
votes cast shall elect. Any other action shall be authorized by a majority of
the votes cast except where the New York Business Corporation Law prescribes a
different percentage of votes or a different exercise of voting power. In the
election of directors, and for any other action, voting need not be by ballot.
Section 9. Quorum and Adjournment. Except for a special election of
directors pursuant to Section 603 of the New York Business Corporation Law, the
presence, in person or by proxy, of the holders of a majority of the shares of
the stock of the Corporation outstanding and entitled to vote thereat shall be
requisite and shall constitute a quorum at any meeting of the shareholders. When
a quorum is once present to organize a meeting, it shall not be broken by the
subsequent withdrawal of any shareholders. If at any meeting of shareholders
there shall be less than a quorum so present, the shareholders present in person
or by proxy and entitled to vote thereat, may adjourn the meeting from time to
time until a quorum shall be present, but no business shall be transacted at any
such adjourned meeting except such as might have been lawfully transacted had
the meeting not adjourned.
Section 10. List of Shareholders.
(a) A complete list of the shareholders of the Corporation
entitled to vote at the ensuing meeting shall be prepared by
the Secretary, or other officer of the Corporation having
charge of the Stock Transfer Books. This list shall be
certified by the officer of the Corporation responsible for
its preparation or by a transfer agent. This list shall be
available at the meeting and shall be open to inspection by
any shareholder at any time during the meeting.
(b) The original Stocks Transfer Books shall be prima facie
evidence as to who are the shareholders entitled to examine
the list or to vote at any meeting of the shareholders.
(c) Failure to comply with the requirements of this section shall
not affect the validity of any action taken at any meetings of
the shareholders.
Section 11. Inspectors of Election. The Board of Directors, in advance of
any meeting shall appoint one or more inspectors of election to act at the
meeting or any adjournment thereof. Inspectors may, but need not, be officers or
employees of the Corporation. If an inspector or inspectors are not appointed,
the person presiding at the meeting may, and at the request of any shareholder
entitled to vote thereat shall, appoint one or more inspectors. In case any
person who may be appointed as an inspector fails to appear or act, the vacancy
may be filled by appointment made by the Board of Directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector before
entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The inspectors shall
determine the number of shares of stock outstanding and the voting power of
each, the shares of stock represented at the meeting, the existence of a quorum,
the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all shareholders. On request of the person presiding at
the meeting or any shareholder entitled to vote thereat, the inspector or
inspectors shall make a report in writing of any challenge, questions or matter
determined by him or them and execute a certificate of any fact found by him or
them. Any report or certificate made by the inspector or inspectors shall be
prima facie evidence of the facts stated and of the vote as certified by them.
3
Section 12. Action of the Shareholders Without Meetings. Any action which
may be taken at any annual or special meeting of the shareholders may be taken
without a meeting or written consent, setting forth the action so taken, signed
by the holders of all outstanding shares entitled to vote thereon. Written
consent thus given by the holders of all outstanding shares entitled to vote
shall have the same effect as a unanimous vote of the shareholders.
ARTICLE III
DIRECTORS
Section 1. Number of Directors. The number of directors shall be at least
three (3). The number of directors may be fixed from time to time by action of a
majority of the entire Board of Directors or of the shareholders at an annual or
special meeting, or, if the number of directors is not so fixed, the number
shall be three or shall be equal to the number of shareholders, whichever is
less. No decrease in the number of directors shall shorten the term of any
incumbent director.
Section 2. Election and Term. The directors shall be divided into three
classes in respect of term of office, each class to contain as near as many as
may be one third of the whole number of the Board. Of the first Board of
Directors elected after adoption of this Article III, Section 2, the members of
one class shall serve until the annual meeting of shareholders held in the year
following their election, the members of the second class shall serve until the
annual meeting of shareholders held two years following their election, and the
members of the third class shall serve until the annual meeting of shareholders
held three years following their election; provided however, that in each case
directors shall continue to serve until their successors shall be elected and
shall qualify. At each annual meeting of shareholders, following the first
meeting after adoption of this Article III, Section 2, one class of directors
shall be elected to serve until the annual meeting of shareholders held three
years next following and until their successors shall be elected and shall
qualify.
Section 3. Filling Vacancies, Resignation, and Removal. Any director may
tender his resignation at any time. Any director or the entire Board of
Directors may be removed, with or without cause, by vote of the shareholders. In
the interim between annual meetings of shareholders or special meetings of
shareholders called for the election of directors or for the removal of one or
more directors and for the filling of any vacancy in that connection, newly
created directorships and any vacancies in the Board of Directors, including
unfilled vacancies resulting from the resignation or removal of directors for
cause or without cause, may be filled by the vote of a majority of the remaining
directors then in office, although less than a quorum, or by the sole remaining
director.
Section 4. Qualifications and Powers. Each director shall be at least
eighteen years of age. A director need not be a shareholder, a citizen of the
United States or a resident of the State of New York. The business of the
Corporation shall be managed by the Board of Directors, subject to the
provisions of the Certificate of Incorporation. In addition to the powers and
authorities by these By-laws expressly conferred upon it, the Board may exercise
all such powers of the Corporations and do all such lawful acts and things as
are not by statute or by the Certificate of Incorporation or by these By-laws
directed or required to be exercised or done exclusively by the shareholders.
Section 5. Meetings. Meetings of the Board of Directors may be held either
within or without the State of New York. Meetings of the Board of Directors
shall be held at those times and places as are fixed from time to time by
resolution of the Board of Directors. Special meetings may be held at any time
upon call of the Chairman of the Board, the Chief Executive Officer, the
President, a Vice-President, or a majority of directors, upon written, notice
deposited in the U.S. mail or sent via facsimile. A meeting of the Board of
Directors may be held without notice immediately following the annual meeting of
the shareholders. Notice need not be given of regular meetings of the Board of
Directors if the times and places are fixed by resolution of the Board of
Directors, nor need notice be given of adjourned meetings. Regular meetings may
be held at any time without notice if all the directors are present or if,
before the meeting, those not present waive such notice in writing. Notice of a
meeting of the Board of Directors need not state the purpose of, nor the
business to be transacted at, any meeting.
4
Section 6. Quorum of Directors and Action by the Board. A majority of the
entire Board of Directors shall constitute a quorum except that when the entire
Board consists of one director, then one director shall constitute a quorum, and
except that when a vacancy or vacancies prevents such majority, a majority of
the directors in office shall constitute a quorum, provided that such majority
shall constitute at least one-third of the entire Board. A majority of the
directors present, whether or not they constitute a quorum, may adjourn a
meeting to another time and place. Except as herein otherwise provided, and
except as otherwise provided by the New York Business Corporation Law, the vote
of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board.
Section 7. Telephonic Meetings. Any member or members of the Board of
Directors, or of any committee designated by the Board, may participate in a
meeting of the Board, or any such committee, as the case may be, by means of
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time, and
participation in a meeting by such means shall constitute presence in person at
such meeting.
Section 8. Action Without a Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes or proceedings of the Board or committee.
Section 9. Compensation of Directors. By resolution of the Board of
Directors, the directors may be paid their expenses, if any, for attendance at
each regular or special meeting of the Board or of any committee designated by
the Board and may be paid a fixed sum for attendance at such meeting, or a
stated salary as director, or both. Nothing herein contained shall be construed
to preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor; provided however that directors who are also
salaried officers shall not receive fees or salaries as directors.
Section 10. Indemnification
(a) Any person who was, is, or is threatened to be made a party to
any action or proceeding, whether civil or criminal (including
an action by or in the right of this Corporation or any other
corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which any director or officer
of this Corporation served in any capacity at the request of
this Corporation), by reason of the fact that he, his testator
or intestate, is or was a director or officer of this
Corporation, or served such other corporation, partnership,
joint venture, trust, employee benefit plan or other
enterprise in any capacity, shall be indemnified by this
Corporation against all judgments, fines, amounts paid in
settlement and reasonable expenses, including attorneys' fees
actually and necessarily incurred in connection with the
defense or appeal of any such action or proceeding, and
against any other amounts, expenses and fees similarly
incurred; provided that no indemnification shall be made to or
on behalf of any director or officer where indemnification is
prohibited by applicable law. This right of indemnification
shall include the right of a director or officer to receive
payment from this Corporation for expenses incurred in
defending or appealing any such action or proceeding in
advance of its final disposition; provided that the payment of
expenses in advance of the final disposition of an action or
proceeding shall be made only upon delivery to this
Corporation of an undertaking by or on behalf of the director
or officer to repay all amounts so advanced if it should be
determined ultimately that the director or officer is not
entitled to be indemnified. The preceding right of
indemnification shall be a contract right enforceable by the
director or officer with respect to any claim, cause of
action, action or proceeding accruing or arising while this
by-law shall be in effect.
5
(b) Any indemnification provided for by this Section shall be
authorized in any manner provided by applicable law or, in the
absence of such law:
(i) by the Board of Directors acting by a quorum of
Directors who are not parties to such action or
proceeding, upon a finding that there has been no
judgment or other final adjudication adverse to the
Director or officer which establishes that his acts were
committed in bad faith or were the result of active and
deliberate dishonesty and were material to the cause of
action so adjudicated, or that he personally gained in
fact a financial profit or other advantage to which he
was not legally entitled, or
(ii) if a quorum under clause (i) is not obtainable,
(1) by the Board upon the opinion in writing of
independent legal counsel that indemnification is
proper in the circumstances because there has been
no such judgment or other final adjudication
adverse to the director or officer, or
(2) by the shareholders upon a finding that there has
been no such judgment or other final adjudication
adverse to the director or officer.
(c) If a claim of indemnification is not paid in full by the
Corporation within ninety days after a written claim has been
received by the Corporation, the claimant may at any time
thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in
part, the claimant shall also be entitled to recover the
expenses of prosecuting such claim.
(d) The rights conferred on any person under this Section shall
not be exclusive of any other right which may exist under any
statute, provision of the Certificate of Incorporation,
by-law, agreement, vote of stockholders or disinterested
directors, or otherwise.
6
(e) Subject to the laws of New York, the Corporation may maintain
insurance, at its expense, to protect itself and any director,
officer, employee or agent of the Corporation against any
expense, liability or loss of the general nature contemplated
by this section, whether or not the Corporation would have the
power to indemnify such person against such expense, liability
or loss under the laws of New York.
(f) It is the intent of the Corporation to indemnify its officers
and directors to the fullest extent authorized by the laws of
New York as they now exist or may hereafter be amended. If any
portion of this Section shall for any reason be held invalid
or unenforceable by judicial decision or legislative
amendment, the valid and enforceable provisions of this
Section will continue to be given effect and shall be
construed so as to provide the broadest indemnification
permitted by law.
ARTICLE IV
COMMITTEES
Section 1. In General. The Board of Directors, by a resolution or
resolutions adopted by a majority of the entire Board, may designate from among
its members an executive committee and other committees each consisting of one
or more directors. Each committee shall have all the authority of the Board of
Directors, except for: (1) submission to shareholders of any action that needs
shareholders' approval, (2) the filing of vacancies in the Board of Directors,
(3) the fixing of compensation of the directors for serving on the board or any
committee, (4) the amendment or repeal of these By-Laws, or the adoption of new
by-laws, and (5) the amendment or repeal of any resolution of the Board of
Directors which by its terms shall not be amendable or repealable.
Section 2. Executive Committee. Except as otherwise limited by the Board
of Directors or by these By-laws, the Executive Committee, if so designated by
the Board of Directors, shall have and may exercise, when the Board is not in
session, all the powers of the Board of Directors in the management of the
business and affairs of the Corporation, and shall have the power to authorize
the seal of the Corporation to be affixed to all papers which may require it.
The Board shall have the power at any time to change the membership of the
Executive Committee, to fill vacancies in it, or to dissolve it. The Executive
Committee may make rules for the conduct of its business and may appoint such
assistance as it shall from time to time deem necessary. A majority of the
members of the Executive Committee, if more than a single member, shall
constitute a quorum.
ARTICLE V
OFFICERS
Section 1. Number. The officers of the Corporation shall be a Chief
Executive Officer, a President, one or more Vice-Presidents, a Treasurer, and a
Secretary. In addition, there may be such subordinate officers as the Board of
Directors may deem necessary. Any person may hold two or more offices.
Section 2. Term of Office. The principal officers shall be chosen annually
by the Board of Directors at the first meeting of the Board of Directors
following the shareholders' annual meeting, or as soon as is conveniently
possible. Subordinate officers may be elected from time to time. Each officer
shall serve until his or her successor shall have been chosen and qualified.
7
Section 3. Removal. Any officer may be removed from office with or without
cause, at any time by the vote of the Board of Directors. Such removal shall not
prejudice the contract rights, if any, of the person so removed.
Section 4. Vacancies. Any vacancy in any office from any cause may be
filled for the unexpired portion of the term by the Board of Directors.
Section 5. Duties.
(a) Chief Executive Officer. The Chief Executive Officer shall
have general active management of the business of the
corporation, and in the absence of the Chairman of the Board,
shall preside at all meetings of the shareholders and the
Board of Directors; and shall see that all orders and
resolutions of the Board of Directors are carried into effect.
(b) President. The President, in the absence of the Chairman of
the Board, shall preside at all meetings of the shareholders
and at all meeting of the Board of Directors. She or he shall
have general supervision of the affairs of the Corporation,
shall sign or countersign all certificates, contracts, or
other instruments of the Corporation as authorized by the
Board of Directors, shall make reports to the Board of
Directors and shareholders, and shall perform any and all
other duties as are incident to her or his office or are
properly required of him or her by the Board of Directors.
(c) Vice-President. The Vice-Presidents, in the order designated
by the Board of Directors, shall exercise the functions of the
President during the absence or disability of the President.
Each Vice-President shall have any other duties as are
assigned from time to time by the Board of Directors.
(d) Secretary and Treasurer. The Secretary and the Treasurer shall
perform those duties as are incident to their offices, or are
properly required of them by the Board of Directors, or are
assigned to them by the Certificate of Incorporation or these
By-Laws.
(e) Delegation. In case of the absence or disability of any
officer of the Corporation and of or person authorized to act
in his or her place during such period of absence or
disability, the Board of Directors may from time to time
delegate the powers and duties of such officer to any other
officer or to any other director or to any other person whom
it may select.
ARTICLE VI
CERTIFICATES OF SHARES
Section 1. Form. The interest of each shareholder of the Corporation shall
be evidenced by certificates for shares of stock, certifying the number of
shares represented thereby and in such form not inconsistent with the
Certificate of Incorporation of the Corporation as the Board of Directors may
from time to time prescribe. Such shares shall be approved by the Board of
Directors, and shall be signed by the President or a Vice-President and by the
Secretary or the Treasurer and shall bear the seal of the Corporation and shall
not be valid unless signed and sealed. Certificates countersigned by a duly
appointed transfer agent and/or registered by a duly appointed registrar shall
be deemed to be so signed and sealed whether the signatures be manual or
facsimile signatures and whether the seal be a facsimile seal or any other form
of seal. All certificates shall be consecutively numbered and the name of the
person owning the shares represented thereby, his residence, with the number of
such shares and the date of issue, shall be entered on the Corporation's books.
All certificates surrendered shall be cancelled and no new certificates issued
until the former certificates for the same number of shares shall have been
surrendered and cancelled, except as provided for herein.
8
In case any officer or officers who shall have signed or whose facsimile
signature or signatures shall have been affixed to any such certificate or
certificates, shall cease to be such officer or officers of the Corporation
before such certificate or certificates shall have been delivered by the
Corporation, may nevertheless be adopted by the Corporation, and may be issued
and delivered as though the person or persons who signed such certificates, or
whose facsimile signature or signatures shall have been affixed thereto, had not
ceased to be such officer or officers of the Corporation.
Any restriction on the transfer or registration of transfer of any shares
of stock of any class or series shall be noted conspicuously on the certificate
representing such shares.
Section 2. Subscription for Shares. Unless the subscription agreement
provides otherwise, subscriptions for shares, whether made before or after the
formation of the Corporation, shall be paid in full at such time, or in such
installments and at such times, as shall be determined by the Board of
Directors. All calls for payments on subscriptions shall be uniform as to all
shares of the same class or of the same series.
Section 3. Addresses of Shareholders. Every shareholder shall furnish the
Corporation with an address to which notices of meetings and all other notices
may be served upon or mailed to him, and in default thereof notices may be
addressed to him at his last known post office address.
Section 4. Stolen, Lost, Destroyed Certificates. No certificate for shares
of stock in the Corporation shall be issued in place of any certificate alleged
to have been lost, destroyed, or stolen except on production of evidence,
satisfactory to the Board of Directors, of that loss, destruction or theft, and,
if the Board of Directors so requires, upon the furnishing of an indemnity bond
in such amount (but not to exceed twice the value of the shares represented by
the certificate) and with such terms and surety as the Board of Directors in its
discretion may require.
Section 5. Transfers of Shares. Upon compliance with all provisions
restricting the transferability of shares, if any, transfer of stock shall be
made only upon the books of the Corporation by the holder in person or by his
attorney thereunto authorized by power of attorney duly filed with the Secretary
of the Corporation or with a transfer agent or registrar, if any, upon the
surrender and cancellation of the certificates or certificates for such shares
properly endorsed and the payment of all taxes due thereon. The Board of
Directors may appoint one or more suitable banks and/or trust companies as
transfer agents and/or registrars of transfers, for facilitating transfers of
any class or series of stock of the Corporation by the holders thereof under
such regulations as the Board of Directors may from time to time prescribe. Upon
such appointment being made all certificates of stock of such class or series
thereafter issued shall be countersigned by one of such transfer agents and/or
registrars of transfers, and shall not be valid unless so countersigned.
ARTICLE VII
DIVIDENDS AND FINANCE
Section 1. Dividends. Unless otherwise specified in the Certificate or
Incorporation, the Board of Directors shall have the power to declare and pay
dividends or to make other distributions.
Section 2. Fiscal Year. The fiscal year of the Corporation shall end on
the last day of December in each year and shall begin on the next succeeding
day, or shall be for such other period as the Board of Directors may designate.
9
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 1. Books and Records. Subject to the New York Business Corporation
Law, the Corporation may keep its books and accounts outside the State of New
York.
Section 2. Amendments of By-Laws. The By-Laws may be adopted, amended or
repealed by a majority of the shareholders entitled to vote in the election of
any directors. By-Laws may also be adopted, amended or repealed by a majority of
the Board of Directors. Any By-Laws adopted by the Board of Directors of the
Corporation may be amended or repealed by the shareholders entitled to vote, as
specified herein.
10
PROXY
ANNUAL MEETING OF SHAREHOLDERS
For Fiscal Year Ended December 31, 2005
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 April 26, 2006, of the Annual Meeting of Shareholders,
hereby nominates, constitutes, appoints and authorizes Edmund M. Jaskiewicz and
Melissa A. Decker, 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
April 14, 2006, at the Annual Meeting of Shareholders to be held at 10:00 A.M.
on Tuesday, June 13, 2006 at the Holiday Inn, 8 Empire Drive, Rensselaer, New
York 12144, or at any adjournments thereof, with all the power the undersigned
would possess if personally present, as follows:
1. The election of the six (6) nominees listed in the Proxy Statement for the
Annual Meeting as directors to serve the terms indicated in the Proxy
Statement commencing with the ensuing year and until their successors
shall be elected and duly qualified.
IF YOU WISH YOUR VOTES TO BE CAST FOR ALL OF THE SIX (6) NOMINEES LISTED
BELOW, PLACE AN "X" IN THIS BOX |_|
IF YOU WISH TO WITHHOLD YOUR VOTES FOR ALL SIX (6) NOMINEES LISTED BELOW,
PLACE AND "X" IN THIS BOX |_|
IF YOU DO NOT WISH TO VOTE FOR ALL OF THE NOMINEES, LINE OUT THE NAMES OF
PERSONS FOR WHOM YOU DO NOT CHOOSE TO VOTE:
DIRECTORS:
Anthony G. Costantino, Ph.D.
Carl A. Florio
Edmund M. Jaskiewicz
Daniel W. Kollin
Stan Cipkowski
Richard P. Koskey
2. Directors' Proposal to Amend and Restate the Company's Bylaws to Classify
the Board of Directors
For |_| Against |_| Abstain |_|
3. Upon such other business as may properly come before the Annual Meeting or
any adjournments thereof.
THIS PROXY CONFERS AUTHORITY TO VOTE FOR ALL OF THE SIX (6) NOMINEES
LISTED EVEN THOUGH THE BLOCK IN ITEM 1 IS NOT MARKED UNLESS THE NAMES OF ONE OR
MORE PERSONS ARE LINED OUT. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL
MEETING, THIS PROXY SHALL BE VOTED IN THE DISCRETION OF THE PROXY HOLDERS.
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 TO THE
CORPORATE SECRETARY, AMERICAN BIO MEDICA CORPORATION, 122 SMITH ROAD,
KINDERHOOK, NEW YORK 12106 OR IN PERSON AT THE ANNUAL MEETING OF SHAREHOLDERS AT
ANY TIME PRIOR TO ITS EXERCISE.
Date:
------------------------------------
Name:
------------------------------------
Beneficial Shareholder (Please Print)
Address:
------------------------------------
------------------------------------
------------------------------------
Signature(s)
------------------------------------
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(All Shareholders must sign)
NUMBER OF SHAREHOLDERS 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.
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(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.