BIO-REFERENCE LABORATORIES, INC.
481 EDWARD H. ROSS DRIVE
ELMWOOD PARK, NEW JERSEY 07407
201-791-2600
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 26, 2001
---------------
The annual meeting of the stockholders of Bio-Reference Laboratories, Inc.
(the "Company") will be held at the Sheraton Crossroads Hotel, Crossroads
Corporate Center, Route 17 North, Mahwah, New Jersey 07495-0001, on Friday,
October 26, 2001 at 10:00 A.M. local time, for the following purposes:
1. To elect two directors to the Company's Board of Directors, each to
serve for a term of three years and until his successor is duly
elected and qualified (Proposal One).
2. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
Pursuant to the provisions of the By-Laws, the Board of Directors has fixed
the close of business on Friday, September 14, 2001 as the record date for
determining the stockholders of the Company entitled to notice of, and to vote
at the meeting or any adjournment thereof.
Stockholders who do not expect to be present in person at the meeting are
urged to date and sign the enclosed proxy and promptly mail it in the
accompanying postage-paid envelope.
By Order of the Board of Directors
Marc D. Grodman
PRESIDENT
Dated: September 17, 2001
PLEASE COMPLETE AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.
THIS WILL NOT PREVENT YOU FROM VOTING IN PERSON AT THE MEETING BUT WILL,
HOWEVER, HELP TO ASSURE A QUORUM AND AVOID ADDED PROXY SOLICITATION COSTS.
BIO-REFERENCE LABORATORIES, INC.
481 EDWARD H. ROSS DRIVE
ELMWOOD PARK, NEW JERSEY 07407
201-791-2600
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 26, 2001
---------------
This Proxy Statement of Bio-Reference Laboratories, Inc., a New Jersey
corporation (the "Company") is first being mailed to Stockholders on or about
September 20, 2001 in connection with the solicitation of proxies by the
Company's Board of Directors to be used at the Annual Meeting of Stockholders of
the Company to be held on Friday, October 26, 2001 at 10:00 A.M. (local time) at
the Sheraton Crossroads Hotel, Crossroads Corporate Center, Route 17 North,
Mahwah, New Jersey 07495-0001. Accompanying this Proxy Statement is a Notice of
Annual Meeting of Stockholders, a form of Proxy, a copy of the Company's 2000
Annual Report and a copy of the Company's Quarterly Report on Form 10-Q for the
quarter ended July 31, 2001 as filed with the Securities and Exchange
Commission, each containing financial statements and related data.
All proxies which are properly filled in, signed and returned to the
Company prior to or at the Meeting will be voted in accordance with the
instructions thereon. A proxy may be revoked by any stockholder giving the same
prior to the exercise thereof by: (a) written notice delivered to the Company's
principal offices prior to the commencement of the Meeting, (b) providing a
signed proxy bearing a later date, or (c) appearing in person and voting at the
Meeting. The Company intends to vote executed but unmarked proxies in favor of
Proposal One. Broker non-votes will be counted for purposes of determining a
quorum but otherwise will be considered not represented with regard to voting on
any matter with respect to which there is a broker non-vote. The Board has fixed
the close of business on September 14, 2001 as the record date for the
determination of stockholders who are entitled to notice of, and to vote at the
meeting or any adjournment thereof.
The expenses of preparing, assembling, printing and mailing the form of
proxy and the material used in solicitation of proxies will be borne by the
Company. In addition to the solicitation of proxies by use of the mails, the
Company may utilize the services of some of its officers and regular employees
(who will receive no additional compensation therefore) to solicit proxies
personally, and by telephone. The Company has requested banks, brokers and other
custodians, nominees and fiduciaries to forward copies of the proxy material to
their principals and to request authority for the execution of proxies and will
reimburse such persons for their services in doing so. The cost of such
additional solicitation incurred otherwise than by use of the mails is estimated
not to exceed $10,000.
VOTE REQUIRED, PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT
At the record date, the Company had 10,817,151 shares of its Common Stock,
$.01 par value (the "Common Stock") and 604,078 shares of its Series A Senior
Preferred Stock ("Series A Preferred Stock") outstanding, the holders of which
are each entitled to one vote per share. The presence in person or by proxy of
at least a majority of the outstanding Common Stock and Series A Preferred Stock
voting together as one class is necessary to constitute a quorum at the meeting.
Election of directors (Proposal One) requires the affirmative vote of a majority
of the votes cast on the Proposal by the holders of Common Stock and Series A
Preferred Stock voting together as one class present in person or by proxy at
the meeting.
The following table sets forth information as of September 14, 2001 with
respect to the ownership of Common Stock by (i) each person known by the Company
to be the beneficial owner of more than 5% of its outstanding
Common Stock, (ii) each director of the Company, (iii) each executive officer of
the Company, and (iv) all directors and executive officers as a group. The
percentages have been calculated on the basis of treating as outstanding for a
particular holder, all shares of Common Stock outstanding on said date owned by
such holder and all shares of Common Stock issuable to such holder in the event
of exercise or conversion of outstanding options, warrants and convertible
securities including Series A Preferred Stock owned by such holder at said date
which are exercisable or convertible within 60 days of such date.
SHARES OF
NAME AND ADDRESS OF COMMON STOCK PERCENTAGE
BENEFICIAL OWNER BENEFICIALLY OWNED(1) OWNERSHIP
------------------ ------------------ ----------
Directors and Executive Officers*
Marc D. Grodman(2) ........................ 1,673,845 15%
Howard Dubinett (3) ....................... 477,001 4%
Sam Singer(4) ............................. 377,667 3%
Gary Lederman(5) .......................... 33,200 --
John Roglieri(6) .......................... 57,000 --
Morton L. Topfer (7) ...................... 1,577,200 15%
Executive Officers and Directors
as a group (six persons)(2)(3)
(4)(5)(6)(7) .............................. 4,165,913 35%
----------
* The address of all of the Company's directors and executive officers is c/o
the Company, 481 Edward H. Ross Drive, Elmwood Park, New Jersey 07407.
(1) Except as otherwise noted, each holder named in the table has sole voting
and investment power with respect to all shares of Common Stock shown as
beneficially owned.
(2) Includes 788,100 shares owned directly by Dr. Grodman, 549,678 shares
issuable upon conversion of Series A Preferred Stock and 100,000 shares
issuable upon exercise of options. Also includes 141,667 shares owned
directly and 54,400 shares issuable upon conversion of Series A Preferred
Stock owned by Dr. Grodman's wife, Pam Grodman, and 40,000 shares owned by
their minor children. Dr. Grodman disclaims beneficial ownership of these
236,067 shares.
(3) Includes 263,667 shares owned directly, and 213,334 shares issuable upon
exercise of options.
(4) Includes 211,000 shares owned directly, and 166,667 shares issuable upon
exercise of options.
(5) Includes 25,200 shares owned directly and 8,000 shares issuable upon
exercise of options.
(6) Includes 49,000 shares owned directly and 8,000 shares issuable upon
exercise of options.
(7) Includes an aggregate 1,569,200 shares owned individually or by CastleTop
Investments, LP of which Topfer Holdings I, Inc. is general partner, Morton
L. Topfer being the president of Topfer Holdings I, Inc.; and 8,000 shares
issuable upon exercise of options.
The Company's executive officers and directors and members of their
immediate families owning and having the right to vote an aggregate 3,661,912
shares (32%) of the Company's outstanding Common Stock and Series A Preferred
Stock on a combined basis have stated their intention to vote their shares FOR
the nominees for election as directors (Proposal One)
2
ACTION TO BE TAKEN AT THE MEETING
ELECTION OF DIRECTORS
(PROPOSAL ONE)
The number of directors on the Company's Board of Directors is currently
fixed at six. The Company's Certificate of Incorporation divides the Board of
Directors into three classes. The members of each class of directors serve for
staggered three-year terms. The Board is comprised of two Class I directors (Dr.
Grodman and Mr. Dubinett), two Class II directors (Mr. Singer and Mr. Topfer)
and two Class III directors (Dr. Roglieri and Mr. Lederman), whose terms expire
upon the election and qualification of their successors at successive Annual
Meetings to be held in 2001, 2002 and 2003 respectively. At each Annual Meeting
of Stockholders, two directors comprising one class are elected for a full term
of three years.
Dr. Grodman and Mr. Dubinett (current Class I directors) are being proposed
for re-election at this Annual Meeting of Stockholders, each to serve for a
three-year term and until his successor is elected and qualifies. The shares
represented by proxies will be voted in favor of the election as directors of
Dr. Grodman and Mr. Dubinett who are the nominees of the Board of Directors for
election and authority to vote for their election as Class I directors shall be
deemed granted unless specifically withheld. Management has no reason to believe
that either or both of such nominees for the office of director will not be
available for election as a director. However, should either or both of them
become unwilling or unable to accept nomination for election, it is intended
that the individuals named in the enclosed proxy may vote for the election of
such other person or persons as Management may recommend. The Company does not
have a nominating committee. During the twelve month period ended October 31,
2000, the Company's Board of Directors held a total of four meetings.
The following table sets forth certain information with respect to each of
the directors and executive officers of the Company.
NAME AGE POSITION
----- ---- -------
Marc D. Grodman, M.D. ....... 49 Chairman of the Board, President,
Chief Executive Officer and Director
Howard Dubinett ............. 50 Executive Vice President,
Chief Operating Officer and Director
Sam Singer .................. 58 Vice President, Chief Financial Officer,
Chief Accounting Officer and Director
Gary Lederman, Esq. (a) ..... 67 Director
John Roglieri, M.D. (b) ..... 62 Director
Morton L. Topfer (b) ........ 64 Director
----------
(a) Chairman of the Audit Committee.
(b) Member of the Audit Committee.
The Audit Committee confers with the Company's auditors and reviews,
evaluates and advises the Board of Directors concerning the adequacy of the
Company's accounting systems, its financial reporting practices, the maintenance
of its books and records and its internal controls. In addition, the Audit
Committee reviews the scope of the audit of the Company's financial statements
and the results thereof. See the Audit Committee Report herein.
The Company does not have an Executive Committee. Officers are elected by
and hold office at the discretion of the Board of Directors.
The following is a brief account of the business experience of each
director including each nominee for director of the Company.
Marc D. Grodman, M.D. founded the Company in December 1981 and has been its
Chairman of the Board, President, Chief Executive Officer and a Director since
its formation. Dr. Grodman is an Assistant Professor of
3
Clinical Medicine at Columbia University College of Physicians and Surgeons and
Assistant Attending Physician at Presbyterian Hospital, New York City. From 1980
to 1983, Dr. Grodman attended the Kennedy School of Government at Harvard
University and was a Primary Care Clinical Fellow at Massachusetts General
Hospital. From 1982 to 1984, he was a medical consultant to the Metal Trades
Department of the AFL-CIO. Dr. Grodman received a B.A. degree from the
University of Pennsylvania in 1973 and an M.D. degree from Columbia University
College of Physicians and Surgeons in 1977. Except for his part time duties as
Assistant Professor of Clinical Medicine and Assistant Attending Physician at
Columbia University and Presbyterian Hospital and his rendering of medical
services on a part time basis to the Uniformed Firefighters Association of New
York City, Dr. Grodman devotes all of his working time to the business of the
Company.
Howard Dubinett has been the Executive Vice-President and Chief Operating
Officer of the Company since its formation in 1981. He became a Director of the
Company in April 1986. Mr. Dubinett attended Rutgers University. Mr. Dubinett
devotes all of his working time to the business of the Company.
Sam Singer has been the Company's Vice President and Chief Financial
Officer since October 1987 and a Director since November 1989. He is responsible
for all of the Company's financial activities. Mr. Singer was the Controller for
Sycomm Systems Corporation, a data processing and management consulting company,
from 1981 to 1987, prior to joining the Company. He received a B.A. degree from
Strayer College and an M.B.A. from Rutgers University. Mr. Singer devotes all of
his working time to the business of the Company.
Gary Lederman, Esq. became a director of the Company in May 1997. He
received his B.A. degree from Brooklyn College in 1954 and his J.D. degree from
NYU Law School in 1957. He was manager of Locals 370, 491 and 662 of the
U.F.C.W. International Union from 1961 to 1985. He is retired from the unions
and has been a lecturer at Queensboro Community College in the field of
insurance. He currently serves on an institutional review board for RTL, a
pharmaceutical drug testing laboratory.
John Roglieri, M.D. became a Director of the Company in September 1995. He
is an Assistant Professor of Clinical Medicine at Columbia University's College
of Physicians and Surgeons and an Assistant Attending Physician at Presbyterian
Hospital, New York City. Dr. Roglieri received a B.S. degree in Chemical
Engineering and a B.A. degree in Applied Sciences from Lehigh University in
1960, an M.D. degree from Harvard Medical School in 1966, and a Master's degree
from Columbia University School of Business in 1978. From 1969 until 1971, he
was a Senior Assistant Surgeon in the U.S. Public Health Service in Washington.
From 1971 until 1973 he was a Clinical and Research Fellow at Massachusetts
General Hospital. From 1973 until 1975, he was Director of the Robert Wood
Johnson Clinical Scholars program at Columbia University. In 1975 he was
appointed Vice-President Ambulatory Services at Presbyterian Hospital, a
position which he held until 1980. Since 1980, he has maintained a private
practice of internal medicine at Columbia-Presbyterian Medical Center. From 1988
until 1992, he was also Director of the Employee Health Service at Presbyterian
Hospital. From 1992 through 1999, Dr. Roglieri was the Corporate Medical
Director of NYLCare, a managed care subsidiary of New York Life. Dr. Roglieri is
currently the chief medical officer of Physician WebLink, a New York
metropolitan area physician practice management company. He is a member of
advisory boards to several pharmaceutical companies, a member of the Editorial
Advisory Board of the journal Managed Care and a biographee of Who's Who in
America.
Morton L. Topfer became a director of the Company in May 2001. Mr. Topfer,
who holds a bachelor's degree in physics from Brooklyn College, was awarded an
honorary doctorate in engineering from Polytechnic Institute of New York in June
2000. Mr. Topfer currently serves both as counselor to the chief executive
officer of Dell Computer Corporation ("Dell") and as a member of Dell's board of
directors. Prior to being elected to his current position at Dell in December
1999, Mr. Topfer served as Dell's vice chairman for five years. In that
position, Mr. Topfer shared the office of Chief Executive Officer with Michael
S. Dell, Dell's chairman and CEO and Kevin B. Rollins, Dell's vice chairman.
Prior to joining Dell in May 1994, Mr. Topfer served as corporate executive vice
president of Motorola, Inc. and president of Motorola's Land Mobile Products
Sector. Mr. Topfer was employed in various managerial and executive capacities
during his 23 year career at Motorola. Before joining Motorola in 1971, Mr.
Topfer spent eleven years with RCA Laboratories in various research and
development management positions. In July 1996, Mr. Topfer was conferred the
Darjah Johan Negeri Penang State Award by the Governor
4
of Penang for his contributions to the development of the electronics industry
in Malaysia. In addition to his serving as a director of the Company and of
Dell, Mr. Topfer also currently serves as a director of two other publicly owned
corporations; Alliance Gaming Corp., a Las Vegas, Nevada manufacturer of gaming
equipment, and Crossroads Systems, Inc., an Austin, Texas manufacturer of
telecommunications equipment.
There are no family relationships between or among any directors or
executive officers of the Company.
COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT
Based solely upon a review of Forms 3 and 4 and any amendments thereto
furnished to the Company pursuant to Rule 16a-3(e) under the Securities Exchange
Act of 1934, or representations that no Forms 5 were required, the Company
believes that with respect to fiscal 2000, its officers, directors and
beneficial owners of more than 10% of its equity securities timely complied with
all applicable Section 16(a) filing requirements thereunder.
INFORMATION REGARDING EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation paid
or accrued by the Company during the year ended October 31, 2000 to its Chief
Executive Officer and its other executive officers who were serving as executive
officers of the Company on October 31, 2000. All of the Company's group life,
health, hospitalization or medical reimbursement plans, if any, do not
discriminate in scope, terms or operation in favor of the executive officers or
directors of the Company and are generally available to all salaried employees.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------- ---------------------------------------------
YEAR OTHER RESTRICTED
NAME AND ENDED ANNUAL STOCK OPTIONS LTIP ALL OTHER
PRINCIPAL POSITION 10/31 SALARY BONUS COMPENSATION AWARDS(1) SARS PAYOUTS COMPENSATION
----------------------- ----- -------- -------- ------------ ---------- ------- ------- ------------
Marc D. Grodman 2000 $366,921 $125,000 $-0- -0- -0- $-0- $-0-
President and Chief 1999 $306,557 $125,000 $-0- -0- -0- $-0- $-0-
Executive Officer 1998 $305,653 $125,000 $-0- -0- -0- $-0- $-0-
Howard Dubinett 2000 $160,004 $ 60,000 $-0- -0- -0- $-0- $-0-
Executive Vice 1999 $160,004 $ 60,000 $-0- -0- -0- $-0- $-0-
President and Chief 1998 $157,622 $ 57,750 $-0- -0- -0- $-0- $-0-
Operating Officer
Sam Singer 2000 $160,004 $ 60,000 $-0- -0- -0- $-0- $-0-
Vice President and 1999 $158,002 $ 60,000 $-0- -0- -0- $-0- $-0-
Chief Financial and 1998 $156,333 $ 57,750 $-0- -0- -0- $-0- $-0-
Accounting Officer
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
On May 13, 1997, Dr. Grodman agreed to the terms of a new employment
agreement pursuant to which he would serve as president and chief executive
officer devoting at least 90% of his working time to the business of the
Company. The agreement provides (i) for a seven-year term commencing November 1,
1997; (ii) a minimum annual Base Compensation consisting of salary and bonus in
the aggregate amount of $395,000 subject to increases based on increases in the
Consumer Price Index as well as increases at the discretion of the board of
directors; (iii) typical health insurance coverage and an initial $2,000,000
face amount of "split dollar" life insurance insuring Dr. Grodman's life and
payable to his estate (excluding benefits required to be paid to the Company
pursuant to the split dollar plan) which amount was increased to $4,000,000
during fiscal year 1999; (iv)
5
the leasing of an automobile for his use; (v) participation in fringe benefit,
bonus, pension, profit sharing, and similar plans maintained for the Company's
employees; (vi) disability benefits; (vii) certain termination benefits; and
(viii) in the event of termination due to a change in control of the Company, a
severance payment equal to 2.99 times Dr. Grodman's average annual compensation
during the preceding five years.
In consideration for Dr. Grodman's acceptance of the terms of the
employment agreement, the Board of Directors authorized the issuance to Dr.
Grodman of (a) 300,000 shares of the Company's Common Stock, partially subject
to forfeiture, (b) five-year incentive stock options ("ISOs") exercisable to
purchase 100,000 shares of Common Stock at $.790625 per share, and (c) ten-year
non-qualified stock options ("NQOs") exercisable to purchase 200,000 shares of
Common Stock at $.71875 per share. The ISOs are only exercisable while Dr.
Grodman is employed by the Company. The NQOs would expire if Dr. Grodman's
employment agreement was terminated by the Company "For Cause" or at his option,
"Without Good Reason."
The 300,000 shares of Common Stock issued to Dr. Grodman were forfeitable
in part on the following basis if his employment agreement was terminated by the
Company "For Cause" or at Dr. Grodman's option "Without Good Reason."
IF TERMINATION "FOR CAUSE"
OR "WITHOUT GOOD REASON"
OCCURS DURING THE FOLLOWING NUMBER OF SHARES
PERIODS FORFEITED
--------------------------- ----------------
May 1, 1997 through April 30, 1998 ............. 225,000 shs.
May 1, 1998 through April 30, 1999 ............. 150,000 shs.
May 1, 1999 through April 30, 2000 ............. 75,000 shs.
Dr. Grodman continues to be employed by the Company at the date of this
Proxy Statement so that the forfeiture provisions are no longer applicable.
Also on May 13, 1997, Mr. Dubinett agreed to the terms of a new employment
agreement pursuant to which he would serve as executive vice president and chief
operating officer of the Company. The agreement provides (i) for a five and
one-half year term commencing May 1, 1997; (ii) a minimum annual Base
Compensation commencing November 1, 1997 consisting of salary and bonus in the
aggregate amount of $220,000 subject to increases based on increases in the
Consumer Price Index as well as increases at the discretion of the board of
directors; (iii) typical health insurance coverage and $500,000 face amount of
"split dollar" life insurance insuring Mr. Dubinett's life and payable to his
estate (excluding benefits required to be paid to the Company pursuant to the
split dollar plan) which amount was increased to $1,000,000 during fiscal year
1999; (iv) the leasing of an automobile for his use; (v) participation in fringe
benefit, bonus, pension, profit sharing, and similar plans maintained for the
Company's employees; (vi) disability benefits; (vii) certain termination
benefits; and (viii) in the event of termination due to a change in control of
the Company, a severance payment equal to 2.99 times Mr. Dubinett's average
annual compensation during the preceding five years.
In consideration for Mr. Dubinett's acceptance of the terms of the
employment agreement, the Board of Directors authorized the issuance to Mr.
Dubinett of (a) 240,000 shares of the Company's Common Stock, partially subject
to forfeiture and (b) ten-year ISOs exercisable to purchase 60,000 shares of
Common Stock at $.71875 per share. The ISOs are only exercisable while Mr.
Dubinett is employed by the Company.
The 240,000 shares of Common Stock issued to Mr. Dubinett. were forfeitable
in part on the following basis if his employment agreement was terminated by the
Company "For Cause" or at Mr. Dubinett's option "Without Good Reason."
6
IF TERMINATION "FOR CAUSE"
OR "WITHOUT GOOD REASON"
OCCURS DURING THE FOLLOWING NUMBER OF SHARES
PERIODS FORFEITED
--------------------------- ----------------
May 1, 1997 through April 30, 1998 ............. 180,000 shs.
May 1, 1998 through April 30, 1999 ............. 120,000 shs.
May 1, 1999 through April 30, 2000 ............. 60,000 shs.
Mr. Dubinett continues to be employed by the Company at the date of this
Proxy Statement so that the forfeiture provisions are no longer applicable.
Also on May 13, 1997, Mr. Singer agreed to the terms of a new employment
agreement pursuant to which he would serve as vice president and chief financial
officer of the Company. The agreement provides (i) for a five and one-half year
term commencing May 1, 1997; (ii) a minimum annual Base Compensation commencing
November 1, 1997 consisting of salary and bonus in the aggregate amount of
$220,000 subject to increases based on increases in the Consumer Price Index as
well as increases at the discretion of the board of directors; (iii) typical
health insurance coverage and $400,000 face amount of "split dollar" life
insurance insuring Mr. Singer's life and payable to his estate (excluding
benefits required to be paid to the Company pursuant to the split dollar plan)
which amount was increased to $800,000 during fiscal year 1999; (iv) the leasing
of an automobile for his use; (v) participation in fringe benefit, bonus,
pension, profit sharing, and similar plans maintained for the Company's
employees; (vi) disability benefits; (vii) certain termination benefits; and
(viii) in the event of termination due to a change in control of the Company, a
severance payment equal to 2.99 times Mr. Singer's average annual compensation
during the preceding five years.
In consideration for Mr. Singer's acceptance of the terms of the employment
agreement, the Board of Directors authorized the issuance to Mr. Singer of (a)
200,000 shares of the Company's Common Stock, partially subject to forfeiture
and (b) ten-year ISOs exercisable to purchase 50,000 shares of Common Stock at
$.71875 per share. The ISOs are only exercisable while Mr. Singer is employed by
the Company.
The 200,000 shares of Common Stock issued to Mr. Singer were forfeitable in
part on the following basis if his employment agreement was terminated by the
Company "For Cause" or at Mr. Singer's option "Without Good Reason."
IF TERMINATION "FOR CAUSE"
OR "WITHOUT GOOD REASON"
OCCURS DURING THE FOLLOWING NUMBER OF SHARES
PERIODS FORFEITED
--------------------------- ----------------
May 1, 1997 through April 30, 1998 ............. 150,000 shs.
May 1, 1998 through April 30, 1999 ............. 100,000 shs.
May 1, 1999 through April 30, 2000 ............. 50,000 shs.
Mr. Singer continues to be employed by the Company at the date of this
Proxy Statement so that the forfeiture provisions are no longer applicable.
STOCK OPTIONS
At November 1, 1999, Dr. Grodman held ISOs exercisable to purchase 100,000
shares of the Company's Common Stock at an exercise price of $.790625 per share
and NQOs exercisable to purchase 200,000 shares of Common Stock at an exercise
price of $.71875 per share. At said date, Mr. Dubinett held ISOs exercisable to
purchase an aggregate 213,334 shares of Common Stock and Mr. Singer held ISOs
exercisable to purchase 166,667 shares of Common Stock. All of Mr. Dubinett and
Mr. Singer's ISOs were exercisable at a price of $.71875 per share. No stock
options were granted during fiscal 2000 to any of the Company's three executive
officers nor did they exercise any of their stock options during such fiscal
year.
7
On August 25, 2000, the Board of Directors adopted the 2000 Employee
Incentive Stock Option Plan reserving an aggregate 800,000 shares of the
Company's Common Stock for issuance upon exercise of ISOs which may be granted
under the Plan to employees including executive officers. No options have been
granted to date to the three executive officers under this Plan. Adoption of the
Plan was subject to stockholder ratification which ratification was obtained at
the Company's December 15, 2000 Annual Meeting of Stockholders.
The following table sets forth certain information concerning unexercised
options for each of the executive officers named in the "Summary Compensation
Table" at October 31, 2000.
2000 FISCAL YEAR-END OPTION VALUES
NUMBER OF UNEXERCISED OPTIONS
AT 1999 FISCAL YEAR-END
VALUE OF
UNEXERCISED
IN-THE-MONEY
NAME EXERCISABLE UNEXERCISABLE OPTIONS AT 10/31/00
----- --------- ---------- -------------
Marc D. Grodman ........... 200,000 -0- $ 256,250
100,000 -0- $ 120,938
Howard Dubinett ........... 213,334 -0- $ 273,334
Sam Singer ................ 166,667 -0- $ 213,542
On April 10, 2001, Dr. Grodman exercised all of his NQOs and thereby
purchased 200,000 shares of Common Stock paying the $.71875 per share exercise
price. On June 8, 2001, John Roglieri, a director of the Company, exercised NQOs
and thereby purchased 10,000 shares of Common Stock at an exercise price of
$.71875 per share.
On June 28, 2001, the Board of Directors granted options to each of its
three non-employee directors. Each director was granted options exercisable to
purchase 8,000 shares of Common Stock at an exercise price of $3.14 per share
(the closing bid price for the Common Stock on NASDAQ in the immediately
preceding day).
DIRECTORS' COMPENSATION
Each director who is not an employee of the Company was paid a $1,000 per
quarter director's fee during fiscal 2000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In July 1989, the Company discontinued the operation of its Med-Mobile
Division. At such time, Dr. Grodman, as the Associated Physician, was indebted
to the Company in the amount of $235,354 in connection with the operation of
this division. Pursuant to an October 1, 1989 Settlement Agreement, Dr. Grodman
issued a $235,354 promissory note to the Company bearing interest at 10% per
annum and payable at the rate of $50,000 per annum in payment of this
indebtedness. On April 30, 1992, the Board of Directors amended this agreement
in consideration for Dr. Grodman's personal guarantee of the Company's
$2,500,000 financing arrangement with Towers Financial Corporation, suspending
all rental and interest charges for periods subsequent to November 1, 1991. As
of October 31, 2000, $73,718 in outstanding principal, interest and van rentals
was due from Dr. Grodman.
On April 20, 1993, in order to facilitate the Company's 1993 proposed
public offering, Dr. Grodman canceled his pro rata option contained in his
employment agreement and all other outstanding options and warrants to purchase
shares of common stock held by Dr. Grodman, his wife and an affiliated entity
(the "Grodman Group") exercisable to purchase an aggregate 604,078 shares of
Common Stock at prices ranging from $1.4438 to $1.50 or
8
an average price of $1.47 per share, in consideration for the issuance to the
Grodman Group of 604,078 shares of a new class of senior preferred stock, $.10
par value per share ("Senior Preferred Stock"). Each share of Senior Preferred
Stock had the same voting rights (one vote per share), dividend rights and
liquidation rights as each share of Common Stock and for a period of ten years
after issuance, was convertible into one share of Common Stock upon payment of a
conversion price of $1.50 per share. The 604,078 shares of Senior Preferred
Stock were issued to the Grodman Group on August 23, 1993.
On May 13, 1997 pursuant to a recapitalization, the Senior Preferred was
retired in exchange for a new class of Series A Senior Preferred Stock issued to
the Grodman Group. The new Series A Preferred Stock is convertible into an
aggregate 604,078 shares of Common Stock on or before May 1, 2007 at a
conversion price of $.75 per share and has the same voting rights (one vote per
share), dividend rights and liquidation rights as each share of Common Stock.
On January 4, 2001, the Board of Directors approved the issuance of 20,000
shares of Common Stock to Dr. Roglieri for consulting services he rendered to
the Company. The closing bid price for the Common Stock on NASDAQ on the
immediately preceding trading day was $1.56 per share.
On May 14, 2001, the Company completed the sale of 1,500,000 shares of
Common Stock for an aggregate $1,500,000. The shares were sold to Castletop
Investments, L.P., a Texas limited partnership whose general partner is Topfer
Holdings I, Inc., a Texas corporation ("Holdings"). Morton L. Topfer is the
president and the Managing Director of Holdings. Mr. Topfer agreed to serve as a
member of the Company's Board of Directors. He was elected to the board on May
23, 2001, replacing Frank DeVito who had resigned.
COMPENSATION COMMITTEE (BOARD OF DIRECTORS)
In fiscal 2000, the Company did not have a compensation committee.
Compensation decisions regarding the executive officers of the Company were made
by the members of the Board of Directors acting as a whole including the three
executive officers, Dr. Grodman, Mr. Dubinett and Mr. Singer. No member of the
Board votes with respect to his own compensation.
On September 5, 2001, the Board of Directors established a compensation
committee consisting of its three non-employee directors to serve commencing
with fiscal year 2002.
BOARD OF DIRECTORS' REPORT ON COMPENSATION
Through fiscal 2000, the Board of Directors, including the Company's three
executive officers, were responsible for reviewing the compensation paid to the
Company's executive officers, provided that none of the Company's executive
officers could vote with respect to his own compensation package.
In determining the compensation packages granted to the Company's three
executive officers in fiscal 1997 and the bonuses awarded them with respect to
fiscal 2000, the Board of Directors took into account the backgrounds,
employment histories, achievements and prior compensation of Dr. Grodman, Mr.
Dubinett and Mr. Singer, the benefits to be obtained by the Company from their
employment in light of the current state of the medical testing laboratory
industry, the Company's current status and its anticipated future development.
The Board took into account information relating to compensation of principal
officers of public and non-public corporations, both in the health field and in
general. As a result, the Board determined that the base compensation provided
by the employment packages for the three employees was generally in line with
packages for comparable positions with comparable companies and that the upside
potential in the packages was principally provided by the Restricted Stock
issued, subject to forfeiture, and the Stock Options granted to each individual
with benefits thereunder accruing to the individual only to the extent he
remains employed by the Company with respect to the Restricted Stock and only to
the extent the market price for the Common Stock increases over the exercise
price
9
of the options, with respect to the options. The Board also determined that the
bonuses paid with respect to fiscal 2000 were reasonable in relationship to the
services performed, the responsibilities assumed and the results obtained.
Board of Directors
Marc D. Grodman
Howard Dubinett
Sam Singer
John Roglieri
Gary Lederman
AUDIT COMMITTEE REPORT
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. It is the responsibility of the Company's
independent auditors to perform an independent audit of and express an opinion
on the Company's financial statements. The Audit Committee's responsibility is
one of review and oversight. In fulfilling its oversight responsibilities:
1. The Audit Committee of the Board of Directors has reviewed and
discussed with the Company's management the audited financial
statements.
2. The Audit Committee has discussed with Moore Stephens, P.C., the
Company's independent auditors, the matters required to be discussed
by Statement on Auditing Standard No. 61 (Codification of Statements
on Auditing Standards, AUss.380), as may be modified or supplemented.
3. The Audit Committee has also received the written disclosures and the
letter from Moore Stephens, P.C. required by the Independence
Standards Board Standard No. 1 (Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees), as may be
modified or supplemented, and has discussed with Moore Stephens, P.C.
the independence of that firm as the Company's auditors.
4. Based on the Audit Committee's review and discussions referred to
above, the Audit Committee recommended to the Board of Directors that
the Company's audited financial statements be included in the
Company's Annual Report on Form 10-K for the year ended October 31,
2000, for filing with the Securities and Exchange Commission.
On June 9, 2000, the Board of Directors formally adopted a written charter
for the Audit Committee. Each of the Audit Committee members is independent, as
defined in Rule 4200(a) of the National Association of Securities Dealers'
listing standards.
AUDIT COMMITTEE
Gary Lederman, Chairman
John Roglieri, Member
STOCK PRICE PERFORMANCE
Set forth below is a line graph comparing the yearly cumulative total
shareholder return on the Company's Common Stock for the five fiscal years ended
October 31, 2000 based on the market price of the Common Stock, with the
cumulative total return of companies in the S&P 500 Composite and with a peer
group of twelve publicly owned medical laboratories.
10
COMPARISON OF FIVE YEAR TOTAL RETURN
FOR BIO-REFERENCE LABORATORIES, INC.,
S&P 500 COMPOSITE AND
MEDICAL LABORATORY PEER GROUP
[Figures below represents line chart in the printed piece]
Oct. 96 100 100 100
Oct. 96 30.77 124.09 58.93
Oct. 97 32.7 163.94 49.74
Oct. 98 23.08 200 39.55
Oct. 99 19.87 251.33 47.63
Oct. 00 41.03 266.65 174
The Medical Laboratory peer group consists of the following companies:
Ameripath, Inc., Dianon Systems Inc, Impath Inc, LabOne, Inc, Laboratory CP of
Amer Holdgs, MDS Inc., Medtox Scientific Inc, Pharmchem Inc., Quest Diagnostics
Inc, US Diagnostics, Inc., Uniholding Corp. and Urocor Inc.
AUDITORS
The firm of Moore Stephens, P.C., certified public accountants, has been
selected by the Board of Directors to audit the accounts of the Company and its
subsidiaries for the fiscal year ending October 31, 2001. Moore Stephens, P.C.
and its predecessor firm have served as the Company's auditors since 1988.
Representatives of such firm are not expected to be present at the October 26,
2001 Annual Meeting of Stockholders.
AUDIT FEES
Moore Stephens, P.C. billed the Company $80,000 for professional services
rendered in connection with the audit of the Company's annual financial
statements for the fiscal year ended October 31, 2000 and the review of the
financial statements included in the Company's quarterly reports on Form 10-Q
for such fiscal year.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Moore Stephens, P.C. did not render services to the Company during fiscal
year 2000 relating to financial information systems design or implementation.
11
ALL OTHER FEES
Moore Stephens, P.C. also billed the Company $20,492 for all other
professional services rendered with respect to fiscal year 2000, primarily for
tax return preparation services.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Under current rules of the Securities and Exchange Commission, stockholders
wishing to submit proposals for inclusion in the Proxy Statement of the Board of
Directors for the 2001 Annual Meeting of Stockholders (expected to be held
during the first half of calendar 2002), must submit such proposals so as to be
received by the Company at 481 Edward H. Ross Drive, Elmwood Park, New Jersey
07407 on or before February 28, 2002.
OTHER MATTERS
Management does not know of any other matters which are likely to be
brought before the Meeting. However, in the event that any other matters
properly come before the Meeting, the persons named in the enclosed proxy will
vote said proxy in accordance with their judgment in said matters.
According to SEC rules, the information presented in this Proxy Statement
under the captions "Board of Directors' Report on Compensation" and "Stock Price
Performance" will not be deemed to be "soliciting material" or deemed filed with
the SEC under the Securities Act of 1933 or the Securities Exchange Act of 1934,
and nothing contained in any previous filings made by the Company under such
Acts shall be interpreted as incorporating by reference the information
presented under said specified captions.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information may be inspected and copied at the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the regional offices of the Commission located at Seven World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of all or part of
such materials can be obtained from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C., 20549 at prescribed rates. Such material may also be accessed
electronically by means of the Commission's Web Site (http;//wwwsec.gov).
By Order of the Board of Directors
Marc D. Grodman
PRESIDENT
Elmwood Park, New Jersey
September 17, 2001
12
--------------------------------------------------------------------------------
BIO-REFERENCE LABORATORIES, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL MEN BY THESE PRESENTS, that the undersigned stockholder of
Bio-Reference Laboratories, Inc. hereby appoints Marc D. Grodman and Howard
Dubinett, and each of them, as proxies, with full power of substitution, to
vote, as designated below, on behalf of the undersigned the number of votes to
which the undersigned is entitled, at the Annual Meeting of Stockholders of
Bio-Reference Laboratories, Inc., to be held on Friday, October 26, 2001 at
10:00 a.m. (local time) at the Sheraton Crossroads Hotel, Crossroads Corporate
Center, Route 17 North, Mahwah, New Jersey 07495-0001, or at any adjournments
thereof:
(Continued, and to be dated and signed on other side)
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD AS SOON AS POSSIBLE.
ANNUAL MEETING OF STOCKHOLDERS OF
BIO-REFERENCE LABORATORIES, INC.
OCTOBER 26, 2001
Please Detach and Mail in the Envelope Provided
--------------------------------------------------------------------------------
+---+ Please mark your
A | X | votes as in this
+---+ example using
dark ink only.
WITHHOLD
FOR AUTHORITY
(1) ELECTION OF [_] [_]
CLASS I
DIRECTORS
(PROPOSAL ONE)
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THE NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW:
-------------------------------------------------
Nominees: Marc D. Grodman MD.
Howard Dubinett
FOR AGAINST ABSTAIN
(2) IN THEIR DISCRETION WITH RESPECT [_] [_] [_]
TO ANY OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF.
Unless a contrary direction is indicated, the shares represented by this
proxy will be voted for all nominees for directors named in the proxy
enclosed with this card; if specific instructions are indicated, the proxy
will be voted in accordance with such instructions. In addition,
discretionary authority is conferred as to all other matters that may come
before the meeting unless such authority is specifically withheld.
Signature___________________ Date_____ Signature___________________ Date_______
TITLE, IF ANY IF HELD JOINTLY
NOTE: If signing for estates, trusts or corporations, title or capacity should
be stated. If shares are held jointly, each holder should sign.