SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [ ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
APPLIED BIOMETRICS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
APPLIED BIOMETRICS, INC.
---------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1997
Notice is hereby given that the Annual Meeting of Shareholders of Applied
Biometrics, Inc. (the "Company") will be held on May 14, 1997 at The Decathalon
Club, 1700 East 79th Street, Bloomington, Minnesota 55425. The meeting will
convene at 3:30 p.m. for the following purposes:
1. To elect five directors to hold office until the next Annual Meeting
of Shareholders or until their successors are elected and qualify.
2. To ratify and approve the appointment of independent public
accountants for the Company for the current fiscal year.
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 21, 1997
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting.
For the Board of Directors,
Joseph A. Marino
CHAIRMAN, CHIEF EXECUTIVE OFFICER
AND PRESIDENT
Burnsville, Minnesota 55337
April 2, 1997
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE, AND RETURN YOUR
PROXY WHICH IS LOCATED ON THE OUTSIDE OF THIS ENVELOPE. A POSTAGE-PAID ENVELOPE
IS ENCLOSED FOR THIS PURPOSE. THE PROXY IS SOLICITED BY MANAGEMENT AND MAY BE
REVOKED OR WITHDRAWN BY YOU AT ANY TIME BEFORE IT IS EXERCISED.
APPLIED BIOMETRICS, INC.
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished to the shareholders of Applied
Biometrics, Inc. (the "Company") in connection with the solicitation of proxies
by the Board of Directors of the Company to be voted at the Annual Meeting of
Shareholders to be held on May 14, 1997 or any adjournment thereof.
The cost of this solicitation will be borne by the Company. In addition
to solicitation by mail, officers, directors and employees of the Company may
solicit proxies by telephone, telegraph or in person. The Company may also
request banks and brokers to solicit their customers who have a beneficial
interest in shares registered in the names of nominees and will reimburse such
banks and brokers for their reasonable out-of-pocket expenses. The Company's
principal offices are located at 501 East Highway 13, Suite 108, Burnsville,
Minnesota 55337, its telephone number is (612) 890-1123 and its facsimile number
is (612) 890-1104. The mailing of this Proxy Statement to shareholders of the
Company commenced on or about April 2, 1997.
Any proxy may be revoked by request in person at the Annual Meeting or
by written notice mailed or delivered to the Secretary of the Company at any
time before it is voted. If not revoked, proxies will be voted as specified by
the shareholders. The shares represented by proxies that are signed but which
lack any such specification will be voted in favor of the proposals set forth in
the Notice of Annual meeting of Shareholders and in favor of the slate of
directors proposed by the Board of Directors and listed herein.
The Company has outstanding only one class of stock, $.01 par value
Common Stock (the "Common Stock"), of which 4,169,587 shares were issued and
outstanding on March 21, 1997. Each share is entitled to one vote on all matters
presented to shareholders. Cumulative voting in the election of directors is not
permitted. Only shareholders of record at the close of business on March 21,
1997 will be entitled to vote at the meeting. The presence, in person or by
proxy, of the holders of a majority of the shares of Common Stock entitled to
vote at the Annual Meeting of Shareholders constitutes a quorum for the
transaction of business.
Under Minnesota law, each item of business properly presented at a
meeting of shareholders generally must be approved by the affirmative vote of
the holders of a majority of the voting power of the shares present, in person
or by proxy, and entitled to vote on that item of business. However, if the
shares present and entitled to vote on that item of business would not
constitute a quorum for the transaction of business at the meeting, then the
item must be approved by a majority of the voting power of the minimum number of
shares that would constitute such a quorum. Votes cast by proxy or in person at
the Annual Meeting of Shareholders will be tabulated by the election inspectors
appointed for the meeting and will determine whether or not a quorum is present.
The election inspectors will treat abstentions as shares that are present and
entitled to vote for purposes of determining the presence of a quorum but as
unvoted for purposes of determining the approval of the matter submitted to the
shareholders for a vote. If a broker indicates on the proxy that it does not
have discretionary authority as to certain shares to vote on a particular
matter, those shares will not be considered as present and entitled to vote with
respect to that matter.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth as of March 21, 1997 the number and
percentage of outstanding shares of Common Stock of the Company beneficially
owned by each person who is known to the Company to beneficially own more than
five percent (5%) of the Common Stock of the Company, by each director of the
Company, by each executive officer named in the Summary Compensation Table
below, and by all directors and executive officers of the Company as a group:
Name and Address of Number of Shares Percent
Beneficial Owner Beneficially Owned(1) of Class
Joseph A. Marino (2)(3) ................................... 279,166 6.3%
501 East Hwy. 13
Burnsville, MN 55337
George E. Kline (3)(4) ................................... 85,000 2.0%
Demetre Nicoloff, M.D., Ph.D (3)(5)........................ 52,500 1.2%
William E. Engbers (3)(6).................................. 35,000 *
Patrick Delaney (3)........................................ 15,000 *
All directors and executive officers
as a group (7 persons) (3)................................. 528,332 11.5%
* Less than 1%
(1) Unless otherwise indicated, each person has sole voting and dispositive
power over such shares.
(2) Includes 29,166 shares held by Mr. Marino's minor children.
(3) Includes the following number of shares which could be purchased under
stock options exercisable within sixty (60) days of the date hereof: Mr.
Marino, 250,000 shares; Mr. Kline, 25,000 shares; Mr. Engbers, 35,000
shares; Mr. Nicoloff, 31,667 shares; Mr. Delaney, 15,000 shares; and by
all directors and executive officers as a group, 413,333 shares. Does not
include stock options to purchase 15,000 shares held by each of Messrs.
Kline, Engbers, and Delaney which will vest if such individuals are
re-elected to the Company's Board of Directors at the Annual Meeting of
Shareholders.
(4) Includes 50,000 shares held by Venture Management Fund I, a limited
partnership of which Mr. Kline is a general partner.
(5) Includes 7,500 shares held by Nicoloff Properties.
(6) Does not include shares held by Allstate Insurance Company.
ELECTION OF DIRECTORS
(PROPOSAL #1)
The Board of Directors has nominated for election the five persons
named below and each has consented to being named a nominee. It is intended that
proxies will be voted for such nominees. Each of the nominees was elected at
last year's Annual Meeting of Shareholders, except for Demetre Nicoloff, M.D.,
Ph.D, who was elected by the Board in March 1997. The Board of Directors
believes that each nominee named herein will be able to serve, but should any
nominee be unable to serve as a director, the persons named in the proxies have
advised that they will vote for the election of such substitute nominee as the
Board of Directors may propose.
The names of the nominees, their principal occupations for at least the
past five years and other information is set forth in the following table:
Name and Age Principal Occupation Director
and Other Directorships Since
Joseph A. Marino Chairman of the Company since 1993 and Chief Executive Officer and 1992
(45) President of the Company since 1994; Chief Financial Officer of the
Company from 1993 to 1996; President and Chief Executive Officer of
Biomedical Dynamics Corporation (manufacturer of disposable medical
products) from 1980 to 1993.
George E. Kline President of Venture Management (a financial consulting services 1992
(59) corporation) since 1966; General Partner of Brightstone Capital, Ltd.
(a venture fund) since 1985; Director of Rimage Corporation (a
manufacturer of diskette duplicators), Pet Food Warehouse, Inc. (an
operator of pet food warehouse superstores), Health Fitness Physical
Therapy, Inc.(a manager of corporate fitness centers and owner and
manager of physical therapy clinics), CyberOptics Corporation (a laser
technology company) and Nutrition Medical, Inc. (a manufacturer and
distributor of vitamins and nutritional products for hospitals and
nursing homes).
William E. Engbers Director of Venture Capital of Allstate Insurance Company, which he 1989
(54) joined in 1989; Director of DM Management, Inc. (a manufacturer of
women's clothing) and LaJolla Pharmaceutical Company (a pharmaceutical
company).
Demetre Nicoloff, M.D., Ph.D Senior Staff Cardiac Surgeon at Cardiac Surgical Associates and a 1997
(63) founder of that group; Director of Optical Sensors for Medicine,
Inc. and Possis Medical Incorporated.
Patrick Delaney Secretary of the Company since 1993; Partner in Lindquist & Vennum 1994
(54) P.L.L.P. (a Minneapolis law firm which is counsel to the Company)
since 1985 and practicing lawyer since 1967; Secretary of MTS Systems
Corporation (a manufacturer of systems for materials testing,
measurement and simulation); Director of CNS, Inc. (a medical device
manufacturing company) and Community First Bankshares, Inc. (a
multi-bank holding company).
MANAGEMENT RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED
-----------------------------
OTHER INFORMATION REGARDING THE BOARD
BOARD MEETINGS
The Board of Directors met five times during 1996 and took action in
writing in lieu of a meeting twice. None of the directors attended fewer than
75% of the aggregate of the total number of Board meetings and Committee
meetings on which he served during 1996.
BOARD COMMITTEES
The Audit Committee of the Board of Directors, which is currently
composed of Messrs. Engbers and Kline met once during 1996. Among other duties,
the Audit Committee reviews and evaluates significant matters relating to the
audit and internal controls of the Company, reviews the scope and results of the
audits by, and the recommendations of, the Company's independent auditors and
approves services provided by the auditors. The Audit Committee also reviews the
audited financial statements of the Company.
The Compensation Committee of the Board of Directors, which is composed
of Messrs. Engbers and Kline, did not meet during 1996 and took action in
writing in lieu of a meeting twice during 1996. The Compensation Committee makes
recommendations to the Board of Directors regarding the employment practices and
policies of the Company and the compensation paid to Company officers and
administers the Company's stock plans.
The Company does not have a Nominating Committee.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ending December 31,
1996, 1995 and 1994, the cash compensation paid by the Company, as well as
certain other compensation paid or accrued for those years, to Joseph A. Marino,
the Company's Chief Executive Officer (the "Named Executive"). None of the
Company's other executive officers received more than $100,000 in cash
compensation during 1996.
SUMMARY COMPENSATION TABLE
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
Name and Principal Securities Underlying
Position Year Salary Options (#)
Joseph A. Marino, 1996 $170,000 -0-
Chairman, Chief Executive 1995 170,000 -0-
Officer and President 1994 141,533 100,000
Stock Options
The Named Executive was not granted any stock options during 1996 and
did not exercise any stock options during 1996. The following table sets forth
information with respect to the Named Executive concerning unexercised options
held as of December 31, 1996:
FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT 12/31/96 (#) OPTIONS AT 12/31/96 (1)
---------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
Joseph A. Marino 250,000 -0- $2,158,100 $-0-
- -------------------
(1) Based on the closing market price of $13.00 per share for the
Company's Common Stock on December 31, 1996.
EMPLOYMENT AGREEMENT
Mr. Marino entered into an employment agreement with the Company as of
May 7, 1993 for a term of one year beginning January 1, 1994 and thereafter
continuing in effect from year to year unless terminated. Under the employment
agreement, as amended by Amendment No. 1 dated as of July 1, 1994, Mr. Marino is
entitled to an annual base salary of $170,000.
DIRECTOR COMPENSATION
Non-employee directors did not receive cash compensation from the
Company for their services as members of the Board of Directors during 1996. On
June 8, 1994, Messrs. Kline and Engbers were each granted a six-year,
non-qualified option to purchase 40,000 shares of Common Stock at $4.625 per
share, the closing price on the day of grant. On September 30, 1994, upon
Patrick Delaney's election to the Board of Directors, Mr. Delaney was granted a
six-year, non-qualified option to purchase 40,000 shares of Common Stock at
$6.56 per share, the closing price on the date of grant. The directors' options
vested as to 10,000 shares on the date of grant and 10,000 shares on the date of
each annual shareholders meeting held during the succeeding three years at which
the director is re-elected to the Board of Directors.
On March 14, 1996, Messrs. Kline, Engbers and Delaney were each granted
a six-year non-qualified option to purchase 20,000 shares of Common Stock at
$11.75 per share, the closing price on the day of grant. The options vest as to
5,000 shares on the date of grant and 5,000 shares on the date of each annual
shareholders meeting held during 1997, 1998 and 1999 at which the director is
re-elected to the Board of Directors.
--------------------
APPROVAL OF AUDITORS
(PROPOSAL #2)
Price Waterhouse LLP, independent public accountants, have been the
auditors for the Company since 1987. They have been reappointed by the Board of
Directors as the Company's auditors for the current fiscal year and shareholder
approval of the appointment is requested. In the event the appointment of Price
Waterhouse LLP should not be approved by the shareholders, the Board of
Directors will make another appointment to be effective at the earliest feasible
time.
A representative of Price Waterhouse LLP is expected to be present at
the Annual Meeting of Shareholders, will have an opportunity to make a statement
if he or she desires to do so, and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR"
APPROVAL OF THE APPOINTMENT OF PRICE WATERHOUSE LLP.
-------------------
SHAREHOLDER PROPOSALS
The rules of the Securities and Exchange Commission permit shareholders
of a company, after timely notice to the Company, to present proposals for
shareholder action in the Company's proxy statement where such proposals are
consistent with applicable law, pertain to matters appropriate for shareholder
action and are not properly omitted by Company action in accordance with the
proxy rules. The Company's 1997 Annual Meeting of Shareholders is expected to be
held on or about May 14, 1997 and proxy materials in connection with that
meeting are expected to be mailed on or about April 2, 1997. Shareholder
proposals prepared in accordance with the proxy rules must be received by the
Company in writing no later than December 10, 1997.
GENERAL
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors to file initial reports of ownership
and reports of changes in ownership with the Securities and Exchange Commission
and the NASD. Executive officers and directors 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 and
written representations from the Company's executive officers and directors, the
Company notes that all such reports have been filed in a timely manner.
OTHER BUSINESS
The management of the Company knows of no matters other than the
foregoing to be brought before the meeting. However, the enclosed proxy gives
discretionary authority in the event that any additional matters should be
presented.
The Company's Annual Report to the shareholders for the fiscal year
ended December 31, 1996 is enclosed herewith.
By Order of the Board of Directors,
Joseph A. Marino
CHAIRMAN, CHIEF EXECUTIVE OFFICER AND PRESIDENT
PROXY
APPLIED BIOMETRICS, INC.
ANNUAL MEETING OF SHAREHOLDERS - MAY 14, 1997
The undersigned hereby appoints Joseph A. Marino and Patrick Delaney
(the "Proxies"), each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares of
Common Stock of Applied Biometrics, Inc., held of record by the undersigned on
March 21, 1997, at the ANNUAL MEETING OF SHAREHOLDERS to be held on May 14,
1997, or any adjournment thereof.
(1) ELECTION OF [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
DIRECTORS: (except as marked below) to vote for nominees listed
JOSEPH A. MARINO WILLIAM E. ENGBERS
GEORGE E. KLINE DEMETRE NICOLOFF, M.D. PATRICK DELANEY
(INSTRUCTION: To withhold authority to vote for any individual nominee
write that nominee's name on the space provided below.)
- ----------------------------------------------------------------------
(2) The proposal to ratify and approve the appointment of Price Waterhouse LLP.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting.
(continued, and to be completed and signed on the reverse side)
(continued from the other side)
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH PROPOSAL.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED IN
FAVOR OF THE PROPOSALS.
Dated: _______________________, 1997
Signed: ___________________________
___________________________________
Signature of Shareholder
Signed: ___________________________
___________________________________
Signature of Shareholder
Please vote, date and sign this
proxy as your name is printed
hereon. When signing as attorney,
executory administrator, trustee,
guardian, etc. give full title as
such. If the stock is held jointly,
each owner should sign. If a
corporation, please sign in full
corporate name by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.