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. )
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Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
Bio-Reference Laboratories, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
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BIO-REFERENCE LABORATORIES, INC.
481 EDWARD H. ROSS DRIVE
ELMWOOD PARK, NEW JERSEY 07407
201-791-2600
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-------------------
July 19, 2007
-------------------
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 Thursday,
July 19, 2007 at 9:00 A.M. local time, for the purpose of considering and acting
on the following matters:
1. Election of 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. 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 Thursday, June 7, 2007 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: June 14, 2007
PLEASE COMPLETE AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
POSTAGE-PAID 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
TO BE HELD ON JULY 19, 2007
------------
This Proxy Statement of Bio-Reference Laboratories, Inc., a New Jersey
corporation (the "Company") is first being mailed to Stockholders on or about
June 14, 2007 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 Thursday, July 19, 2007 at 9:00 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 for the meeting and a copy of the
Company's 2006 Annual Report 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 addressed to the Company's
Chief Information Officer and 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. The Board has
fixed the close of business on Thursday, June 7, 2007 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.
At the record date, the Company had 13,659,814 shares of its Common
Stock, $.01 par value (the "Common Stock") issued and 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 is necessary to
constitute a quorum at the meeting. Broker nonvotes (that is, proxies from
brokers or nominees indicating that such persons have not received instructions
from the beneficial owners or other persons entitled to vote shares on a
particular matter as to which the broker or nominee does not have discretionary
authority) will be counted for purposes of determining a quorum for the
transaction of business at the Annual Meeting but will not be considered as
votes for purposes of determining the outcome of a vote. 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 present in person or by proxy at the
meeting.
The following table sets forth information as of June 7, 2007 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 of
outstanding options and warrants owned by such holder at said date which are
exercisable within 60 days of such date.
Name and Address of Shares of Common Stock Percentage
Beneficial Owner Beneficially Owned(1) Ownership
---------------- --------------------- ---------
Directors and
Executive Officers*
-------------------
Marc D. Grodman(2) 1,647,846 12%
Howard Dubinett(3) 390,516 3%
Sam Singer(4) 245,567 2%
Joseph Benincasa -0- -
Harry Elias -0- -
Gary Lederman 27,200 -
John Roglieri 44,000 -
Executive Officers 2,355,129 17%
and Directors as a group
(seven persons)(2)(3)(4)
Other Greater than 5%
BENEFICIAL OWNER
Paradigm Capital Management, LLC(5) 805,800 6%
Nine Elk Street
Albany, NY 12207
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* 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
(2) Includes 1,223,779 shares owned directly and 200,000 pledged shares. In lieu
of an outright sale, on October 12, 2006, Dr. Grodman established a Rule
10b-5-1 Sales Plan (the "Sales Plan") with Bear Stearns & Co., Inc. ("Bear
Stearns") to facilitate sales of a variable number of Dr. Grodman's shares
of Common Stock (up to 200,000 shares) in variable pre-paid forward
transactions ("Forward Transactions") at a minimum per share sale price as
specified in the Sales Plan. In connection with the contemplated Forward
Transactions, Dr. Grodman pledged 200,000 shares of his Common Stock to
secure his obligation to deliver a maximum aggregate 200,000 shares of
Common Stock to Bear Stearns on the final settlement dates. As prepayment
for the pledge of these shares, Bear Stearns has agreed to pay Dr. Grodman
an amount equal to 88.65% of the sales prices of any shares actually sold
pursuant to the Sales Plan. The number of shares that Dr. Grodman will be
obliged to deliver on the final settlement dates will vary based upon the
market prices of the Common Stock on such settlement dates. Dr. Grodman will
benefit from any excess in the market prices of the Common Stock at the
final Settlement Dates, of up to 120% of the actual sales prices, by being
able to deliver fewer shares. In December 2006, 5,700 shares were sold at a
price of $25 per share; 85,963 shares were sold at a price of $25.37 per
shares and 54,643 shares were sold at a price of $25.26 per share. Until the
settlement dates, Dr. Grodman is deemed the beneficial owner of the pledged
shares. Also includes 176,067 shares owned directly by Dr. Grodman's wife,
Pam Grodman, and 48,000 shares owned by their minor children. Dr. Grodman
disclaims beneficial ownership of these 224,067 shares.
(3) Includes 290,516 shares owned directly and 100,000 pledged shares. In lieu
of an outright sale, on September 30, 2005, Mr. Dubinett entered into a
pre-paid variable forward sales contract ("Forward Contract") with Bear
Stearns Bank plc ("Bear Stearns"). Pursuant to the Forward Contract, Mr.
Dubinett pledged 100,000 of his shares of Common Stock to secure his
obligation to deliver a maximum 100,000 shares of Common Stock to Bear
Stearns on September 28, 2007 (the "Settlement Date"). Mr. Dubinett received
a prepayment from Bear Stearns for his pledge of the 100,000 shares of
$1,374,400 or $13.74 per share representing approximately 80% of the
proceeds from the sale of 100,000 shares on September 28, 2005. On the
Settlement Date, Mr. Dubinett will be obligated to deliver a variable number
of shares to Bear Stearns based on the price of the Common Stock on the
Settlement Date, up to a maximum 100,000 shares. Mr. Dubinett will benefit
from any excess in the price of the Common Stock on the Settlement Date
between $17.18 per share up to a maximum $24.052 per share by being able to
deliver fewer shares. Until the Settlement Date, Mr. Dubinett is deemed the
beneficial owner of the pledged shares.
(4) Includes 232,567 shares owned directly and 13,000 shares owned by children
who share Mr. Singer's household. Mr. Singer disclaims beneficial ownership
of these 13,000 shares.
(5) Paradigm Capital Management, LLC ("Paradigm") filed a Schedule 13G dated
February 14, 2006 with the Securities and Exchange Commission on February
15, 2006 indicating its beneficial ownership of the above 805,800 shares.
Paradigm stated in the Schedule 13G that the shares were acquired in the
ordinary course of business; were not acquired and are not held for the
purpose of or with the effect of changing or influencing the control of the
Company, and were not acquired and are not held in connection with or as a
participant in any transaction having that purpose or effect.
3
The Company's executive officers and directors and members of their
immediate families owning and having the right to vote an aggregate 2,363,029
shares (20%) of the Company's outstanding Common Stock have stated their
intention to vote their shares FOR the nominees proposed for election as
directors (Proposal One).
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 seven. 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. Elias) and
three Class III directors (Mr. Benincasa, Mr. Lederman and Dr. Roglieri), whose
terms expire upon the election and qualification of their successors at
successive Annual Meetings to be held in 2007 (the Class I directors), 2008 (the
Class II directors) and 2009 (the Class III directors). At each Annual Meeting
of Stockholders, the directors comprising one of the classes 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 any of such nominees for the office of director will
not be available for election as a director. However, should any 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 the Board of Directors may recommend.
The following table sets forth certain information as of the record date
with respect to each of the directors and executive officers of the Company.
Name Age Position
---- --- --------
Marc D. Grodman, M.D. 55 Chairman of the Board, President,
Chief Executive Officer and Director
Howard Dubinett 55 Executive Vice President,
Chief Operating Officer and Director
Sam Singer 63 Senior Vice President, Chief Financial Officer,
Chief Accounting Officer and Director
Joseph Benincasa(a)(c) 57 Director
Harry Elias(a)(c) 77 Director
Gary Lederman, Esq.(b)(c) 73 Director
John Roglieri, M.D.(a)(d) 67 Director
4
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(a) Member of the Audit Committee
(b) Chairman of the Audit Committee
(c) Member of the Compensation Committee
(d) Chairman of the Compensation Committee
BACKGROUND
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 Clinical Medicine
at Columbia University's College of Physicians and Surgeons and Assistant
Attending Physician at New York 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 New York Presbyterian Hospital, Dr. Grodman devotes all
of his working time to the business of the Company.
Since January 2005, Dr. Grodman has been a member of the Board of
Directors of the American Clinical Laboratory Association, an industry
organization comprised of the largest and most significant commercial clinical
laboratories in the United States. Other Board members include the chief
executive officers of Quest Diagnostics and Laboratory Corporation of America.
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 University and an M.B.A. from Rutgers University. Mr. Singer devotes all
of his working time to the business of the Company.
5
Joseph Benincasa became a Director of the Company in June 2005. Mr.
Benincasa currently serves as the Executive Director of The Actors' Fund of
America, a position he has held since 1989. The Actors' Fund is the leading
national, non-profit human services organization providing comprehensive social
and health care services, employment, training and housing support to the
entertainment profession. It is headquartered in New York City with regional
offices in Chicago and Los Angeles. Mr. Benincasa sits on the Board of Directors
of The Greater New York Blood Program where he previously served as Director of
Public Education and Public Relations. He is also a director of St. Peter's
University Medical Center and also sits on the boards of directors of Broadway
Cares/Equity Fights AIDS; the National Theatre Workshop of the Handicapped;
Career Transition for Dancers; the Times Square Alliance; the New York Society
of Association Executives and the Somerset Patriots, a minor league baseball
team. Mr. Benincasa holds a B.A. from St. Joseph's University and an M. Ed. from
Rutgers University. He also attended the Fordham University Graduate School of
Business.
Harry Elias became a Director of the Company in March 2004. Mr. Elias
commenced his employment in sales and marketing with JVC Company of America
("JVC") in 1967, subsequently being appointed as JVC's Senior Vice President of
Sales and Marketing in 1983 and as Executive Vice President of Sales and
Marketing in 1990. In 1995, Mr. Elias was named as JVC's Chief Operating
Officer, a position he occupied until April 2003 when he resigned his positions
upon his appointment as JVC's "Honorable Chairman." JVC, a distributor of audio
and video products headquartered in Wayne, New Jersey is the wholly owned United
States subsidiary of Victor Company of Japan, a manufacturer of audio and video
products headquartered in Japan. In January 2005, after retiring from JVC, Mr.
Elias was appointed Chairman of the Board of and commenced to serve as a
consultant to AKAI USA, the sole distributor in the United States of electronic
products produced by AKAI, a Chinese manufacturer. Mr. Elias has been retired
since mid-2006.
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 served on an institutional review board for RTL, a pharmaceutical
drug testing laboratory until his retirement in December 2006.
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 New
York 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 New York Presbyterian
Hospital, a position which he held until 1980. Since 1980, he has maintained a
private practice
6
of internal medicine at Columbia-Presbyterian Medical Center. From 1988 until
1992, he was also Director of the Employee Health Service at New York
Presbyterian Hospital. From 1992 through 1999, Dr. Roglieri was the Corporate
Medical Director of NYLCare, a managed care subsidiary of New York Life
Insurance Company ("New York Life"). Dr. Roglieri was chief medical officer of
Physician WebLink, a national physician practice management company, from 1999
to 2000. Since 2001, he has been a Medical Director for New York Life. He is a
member of advisory boards to several pharmaceutical companies and a member of
the Editorial Advisory Board of the journals Managed Care and Seminars in
Medical Practice.
There are no family relationships between or among any directors or
executive officers of Bio-Reference Laboratories. The Company's Certificate of
Incorporation provides for a staggered Board of Directors pursuant to which the
Board is divided into three classes of directors and the members of only one
class are elected each year to serve a three-year term. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE TWO CLASS I DIRECTOR NOMINEES NAMED ABOVE.
THE BOARD AND ITS COMMITTEES
BOARD MEETINGS
The Board of Directors held five meetings during fiscal 2006. All of the
Company's current Directors attended all of the fiscal 2006 meetings of the
Board of Directors and of the committee meetings which they were eligible to
attend. The Board of Directors has determined that the four non-employee
Directors each meet the definition of "independent" as required by the
applicable listing standards of the Nasdaq Stock Market, Inc. ("Nasdaq Stock
Market").
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established three standing committees: an
Audit Committee, a Compensation Committee and a Nominating Committee.
AUDIT COMMITTEE
The Audit Committee is comprised of the four non-employee members of the
Board of Directors, Gary Lederman (Chairman), Joseph Benincasa, Harry Elias and
John Roglieri. The Board of Directors deems each such individual as
"independent" as defined by the rules of the Nasdaq Stock Market. The Audit
Committee met three times during fiscal year 2006. 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. The Board
of Directors has determined that Gary Lederman is qualified to serve as the
Company's "audit committee financial expert" as defined in Item 401 (h) of
Regulation S-K promulgated by the Securities and Exchange Commission.
7
The Compensation Committee is comprised of the four non-employee members
of the Board of Directors, John Roglieri (Chairman), Joseph Benincasa, Harry
Elias and Gary Lederman. The Compensation Committee met once during fiscal year
2006. The Compensation Committee reviews salaries, cash bonuses and compensation
plans for the Company's executive officers and eligible employees and makes
recommendations concerning same to the Board of Directors.
The Company does not have an Executive Committee. Officers are elected
by and hold office at the discretion of the Board of Directors.
The Nominating Committee is comprised of the four non-employee members
of the Board of Directors, Joseph Benincasa, Harry Elias, Gary Lederman and John
Roglieri all of whom may be deemed "independent" as defined under the rules of
the Nasdaq Stock Market. Pursuant to its charter, the Nominating Committee's
role is to establish criteria for the selection of directors; to identify
individuals qualified to be directors; to evaluate director candidates proposed
by stockholders; to recommend individuals to fill vacancies on the Board and to
recommend nominees for director at each annual stockholder meeting. The
Nominating Committee was established on August 9, 2004 and its charter is
available on the Company's website at www.bioreference.com.
The Nominating Committee identifies potential director candidates by
referral from management, members of the Board of Directors and their various
business contacts. The Nominating Committee will also consider nominees for
director proposed by a stockholder as provided as follows. Information with
respect to the proposed nominee must be provided by the stockholder addressed to
the Company's secretary at the Company's principal offices in Elmwood Park, New
Jersey not less than 60 days nor more than 90 days prior to the anniversary date
of the prior year's annual meeting. The information should include the name of
the nominee and such information with respect to the nominee as would be
required under the rules and regulations of the Securities and Exchange
Commission to be included in the Company's Proxy Statement if the proposed
nominee were to be included therein. In addition, the stockholder's notice
should also include the number of shares of Common Stock the stockholder owns, a
description of all arrangements and understandings between the stockholder and
the proposed nominee, a representation that the stockholder intends to appear in
person or by proxy at the meeting to nominate the person named in its notice, a
representation as to whether the stockholder intends to deliver a proxy
statement to or solicit proxies from stockholders of the Company and information
with respect to the stockholder as would be required under the rules and
regulations of the Securities and Exchange Commission to be included in the
Company's Proxy Statement.
The Nominating Committee will evaluate candidates based upon factors
such as independence, knowledge, judgment, integrity, character, leadership,
skills, education, experience, financial literacy, standing in the community and
ability to complement the Board's existing strengths. There are no differences
in the manner in which the Committee will evaluate nominees for director based
on whether or not the nominee is recommended by a stockholder.
8
CODE OF ETHICS
The Company has adopted a Code of Ethics that applies to its executive
officers and to key financial and accounting personnel. The Company will, upon a
stockholder's written request to Investor Relations, c/o the Company, furnish a
paper copy of the Code of Ethics.
COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT
Based solely on 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 2006, its officers, directors and
beneficial owners of more than 10% of its equity securities timely complied with
all applicable Section 16(a) filing requirements.
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, 2006 to its
Chief Executive Officer and its other executive officers who were serving as
executive officers of the Company on October 31, 2006. 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
----------------------------- -----------------------------------
Other All
Year Annual Restricted LTIP Other
Name and Principal Ended Compen- Stock Options Pay- Compen-
Position October 31, Salary Bonus(a) sation(b) Awards (SARs) outs sation
-------- ----------- -------- -------- --------- ---------- ------- ---- ------
Marc D. Grodman M.D. 2006 $806,000 $ -- $-0- -0- -0- $-0- $-0-
President and Chief 2005 $750,000 $ -- $-0- -0- -0- $-0- $-0-
Executive Officer 2004 $554,625 $125,000 $-0- -0- -0- $-0- $-0-
Howard Dubinett 2006 $306,000 $ -- $-0- -0- -0- $-0- $-0-
Executive Vice 2005 $285,000 $ 14,600 $-0- -0- -0- $-0- $-0-
President and Chief 2004 $272,200 $ 60,000 $-0- -0- -0- $-0- $-0-
Operating Officer
Sam Singer
Vice President and 2006 $306,000 $ -- $-0- -0- -0- $-0- $-0-
Chief Financial and 2005 $285,000 $ 14,600 $-0- -0- -0- $-0- $-0-
Accounting Officer 2004 $259,004 $ 60,000 $-0- -0- -0- $-0- $-0-
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(a) The Compensation Committee adopted an Incentive Bonus Plan for Senior
Management with respect to fiscal 2006. The Plan entitled each participant to
earn a bonus equal to a percentage of his or her annual gross wages to the
extent that the Company's operating income in fiscal 2006 was equal to or
greater than certain percentages of its Net Revenues. No bonuses were earned for
fiscal 2006 pursuant to the Plan. An aggregate $94,400 in bonuses were earned
for fiscal 2005 pursuant to the Plan adopted by the Compensation Committee for
fiscal 2005.
(b) See "Split-Dollar Life Insurance" herein concerning the Company's payment of
life insurance premiums pursuant to "split-dollar" life insurance programs for
the Company's three executive officers.
9
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
Dr. Grodman serves as President and Chief Executive Officer pursuant to
a seven-year employment agreement which expires on October 31, 2011. Dr. Grodman
has the right to elect to cancel the employment agreement effective at the end
of any calendar month commencing October 31, 2008 on not less than 90 days prior
written notice, subject to a six month non-competition restriction. The
employment agreement is automatically renewable for additional two year periods
subject to the right of either party to elect not to renew at least six months
prior thereto. The employment agreement provides Dr. Grodman with minimum annual
base compensation of $750,000 subject to annual percentage increases to the
extent of annual percentage increases in the Consumer Price Index. The
Compensation Committee can but is not required to increase Dr. Grodman's
compensation at the end of any fiscal year based upon his and the Company's
performance. The employment agreement also provides Dr. Grodman with business
use of an automobile leased by the Company and participation in any fringe
benefit and bonus plans available to the Company's employees to the extent
determined by the Compensation Committee. The employment agreement contains
provisions governing in the event of Dr. Grodman's partial or total disability
and provides for termination for cause or in the event of Dr. Grodman's death.
Dr. Grodman has the right to terminate the employment agreement in the event of
a material change in his duties and responsibilities, the relocation of the
Company's principal executive offices from Elmwood Park, New Jersey to a
location more than fifty miles distant or a material breach of the employment
agreement by the Company (including a reduction in Dr. Grodman's benefits under
the agreement). In the event of a Change in Control of the Company, Dr. Grodman
can elect to terminate the agreement. In that event, he will be entitled to be
paid a lump sum Severance Payment equal to 2.99 times the average of his annual
compensation paid by the Company for the five calendar years preceding the
earlier of the calendar year in which the Change of Control occurred or the
calendar year of the Date of Termination. See "Split-Dollar Life Insurance" as
to the Endorsement Split-Dollar Life Insurance Agreement between the Company and
Dr. Grodman.
Mr. Dubinett serves as Executive Vice President and Chief Operating
Officer pursuant to an employment agreement which was extended in fiscal 2004
for two additional years beyond its October 31, 2004 termination date. Mr.
Dubinett's minimum annual compensation under the extended agreement is equal to
his annual compensation in fiscal 2002 and is subject to increases based on
increases in the Consumer Price Index as well as to increases (including
bonuses) at the discretion of the Compensation Committee. The agreement provides
(i) typical health insurance coverage; (ii) the leasing of an automobile for his
use; (iii) participation in fringe benefit, bonus, pension, profit sharing, and
similar plans maintained for the Company's employees; (iv) disability benefits;
(v) certain termination benefits; and (vi) 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. The
Company has extended the employment agreement on the same terms and conditions
through October 31, 2007. See "Split Dollar Life Insurance" as to the
Endorsement Split Dollar Life Insurance Agreement between the Company and Mr.
Dubinett.
10
Mr. Singer serves as Vice President and Chief Financial Officer pursuant
to an employment agreement which was extended in fiscal 2004 for two additional
years beyond its October 31, 2004 termination date. Mr. Singer's minimum annual
compensation under the extended agreement is equal to his annual compensation in
fiscal 2002 and is subject to increases based on increases in the Consumer Price
Index as well as to increases (including bonuses) at the discretion of the
Compensation Committee. The agreement provides (i) typical health insurance
coverage; (ii) the leasing of an automobile for his use; (iii) participation in
fringe benefit, bonus, pension, profit sharing, and similar plans maintained for
the Company's employees; (iv) disability benefits; (v) certain termination
benefits; and (vi) 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. The Company has extended the
employment agreement on the same terms and conditions through October 31, 2007.
See "Split-Dollar Life Insurance" as to the Endorsement Split-Dollar Life
Insurance Agreement between the Company and Mr. Singer.
The Compensation Committee increased Dr. Grodman's, Mr. Dubinett's and
Mr. Singer's minimum annual base compensation with respect to fiscal 2006 by 5%
in each case over his fiscal 2005 annual base salary.
SPLIT-DOLLAR LIFE INSURANCE
Pursuant to the terms of their 1997 employment agreements, the Company
had established split-dollar life insurance programs for each of its three
Executive Officers. As a result of the passage of the Sarbanes Oxley Act of 2002
(signed into law on July 30, 2002), these three programs were modified. Pursuant
to the modification, each of the three Executive Officers assigned ownership of
his policies to the Company and new policies were issued to replace the prior
policies with annual premiums under the new policies ($70,000 under Dr.
Grodman's policy and $25,000 each under Messrs. Dubinett's and Singer's
policies) being equal to the premiums paid under the replaced policies. The
Company has now executed new "Endorsement Split-Dollar Life Insurance
Agreements" with each of its three Executive Officers. Pursuant to the new
agreements, the Company has agreed to continue to pay the annual premium on the
policy on each officer's life during the period of his full-time employment by
the Company. The Company is the sole owner of the policy and of its net cash
surrender value, and in the event of the officer's death while serving as a
full-time employee of the Company, the Company will be entitled to receive that
amount of the death proceeds equal to its interest in the policy (the aggregate
amount of premiums paid by the Company with respect to the policy less the
amount of any loans, if any, from the Insurer to the Company against the cash
value or policy proceeds, and less the aggregate amount of any premiums paid by
the officer to the Company in reimbursement of premiums paid by the Company) and
the balance of the death proceeds will be paid to the officer's designated
beneficiaries. The premiums paid by the Company on the current policies and the
prior policies aggregated approximately $1,304,000 at October 31, 2006. At that
date, the net cash surrender value of the three current policies aggregated
approximately $934,000 and is recorded on the books of the Company at that
value.
11
STOCK OPTIONS
EMPLOYEE STOCK OPTION PLANS
THE 1989 PLAN
In July 1989, the Company's Board of Directors adopted the 1989 Employee
Stock Option Plan (the "1989 Plan") which was approved by shareholders in
November 1989. The 1989 Plan provided for the grant of options to purchase up to
666,667 shares of Common Stock. Under the terms of the 1989 Plan, options
granted thereunder could be designated as options which qualify for incentive
stock option treatment ("ISOs") under Section 422 of the Internal Revenue Code
of 1986 ("the Code"), or options which do not so qualify ("NQOs").
Under the 1989 Plan, the exercise price of an option designated as an
ISO could not be less than the fair market value of the Common Stock on the date
the option was granted. However, in the event an option designated as an ISO was
granted to a 10% shareholder (as defined in the 1989 Plan) such exercise price
was required to be at least 110% of such fair market value. Exercise prices of
NQOs could be less than such fair market value. The aggregate fair market value
of shares subject to options granted to a participant which are designated as
ISOs which first become exercisable in any calendar year could not exceed
$100,000. All options under the 1989 Plan were required to be granted before the
Plan's July 1999 Termination Date so that no further options can be granted
under the 1989 Plan.
During fiscal 2006, one employee exercised ISOs under the 1989 Plan and
purchased an aggregate 5,000 shares at an exercise price of $.71875 per share.
As a result, at October 31, 2006, there were outstanding ISOs under the 1989
Plan exercisable to purchase an aggregate 1,000 shares at an exercise price of
$.71875 per share.
THE 2000 PLAN
On August 25, 2000, the Board of Directors adopted the 2000 Employee
Incentive Stock Option Plan (the "2000 Plan") reserving an aggregate 800,000
shares of Common Stock for issuance upon exercise of ISOs which may be granted
under the 2000 Plan. Stockholders ratified the adoption of the 2000 Plan at the
December 14, 2000 Annual Meeting of Stockholders. During fiscal 2006, eight
employees exercised ISOs issued under the 2000 Plan and purchased an aggregate
245,500 shares at exercise prices ranging from $1.688 to $8.40 per share and no
employee holding ISOs granted under the 2000 Plan terminated employment with the
Company. As a result, at October 31, 2006, there were outstanding ISOs under the
2000 Plan exercisable to purchase an aggregate 230,100 shares at exercise prices
ranging from $5.52 to $15.34 per share.
The 2000 Plan authorizes the grant of options which qualify for ISO
treatment under Section 422 of the Code, to purchase up to a maximum aggregate
800,000 shares of the Company's Common Stock. Options may only be granted under
the 2000 Plan to employees of the Company and its subsidiaries (including
officers and directors who are also employees).
12
The 2000 Plan will be administered by the Board of Directors or by a
Stock Option Committee designated by the Board of Directors. The Board or the
Stock Option Committee, as the case may be, has the discretion to determine the
eligible employees to whom, and the price (not less than the fair market value
on the date of grant) at which options will be granted; the periods during which
each option is exercisable; and the number of shares subject to each option. The
Board or the Stock Option Committee has the authority to interpret the 2000 Plan
and to establish and amend rules and regulations relating thereto.
The 2000 Plan provides that the exercise price of an option granted
thereunder shall not be less than the fair market value of the Common Stock on
the date the option is granted. However, in the event an option is granted under
the 2000 Plan to a holder of 10% or more of the Company's outstanding Common
Stock, the exercise price must be at least 110% of such fair market value. Under
the 2000 Plan, options must be granted before the August 24, 2010 Termination
Date. No option may have a term longer than ten years (limited to five years in
the case of an option granted to a 10% or greater stockholder of the Company).
The aggregate fair market value of the Company's Common Stock with respect to
which options are exercisable for the first time by a grantee under the 2000
Plan during any calendar year cannot exceed $100,000. Options granted under the
2000 Plan are non-transferable and must be exercised by an optionee, if at all,
while employed by the Company or a subsidiary or within three months after
termination of such optionee's employment due to retirement, or within one year
of such termination if due to disability or death. The Board or the Stock Option
Committee, as the case may be, may, in its sole discretion, cause the Company to
lend money to or guaranty any obligation of an employee for the purpose of
enabling such employee to exercise an option granted under the 2000 Plan
provided that such loan or obligation cannot exceed fifty percent (50%) of the
exercise price of such option.
THE 2003 PLAN
On June 3, 2003, the Board of Directors adopted the 2003 Employee
Incentive Stock Option Plan (the "2003 Plan") reserving an aggregate 800,000
shares of Common Stock for issuance upon exercise of ISOs which may be granted
under the 2003 Plan. Stockholders ratified the adoption of the 2003 Plan at the
July 31, 2003 Annual Meeting of Stockholders. During fiscal 2006, no ISOs were
granted under the 2003 Plan; eleven employees exercised their ISOs and purchased
an aggregate 56,500 shares at exercise prices ranging from $12.22 to $18.25 per
share and no employees holding ISOs granted under the 2003 Plan terminated
employment with the Company. As a result, at October 31, 2006, there were
outstanding ISOs under the 2003 Plan exercisable to purchase an aggregate
357,958 shares at exercise prices ranging from $12.22 to $21.46 per share.
The 2003 Plan authorizes the grant of options which qualify for ISO
treatment under Section 422 of the Code to purchase up to a minimum aggregate
800,000 shares of the Company's Common Stock. Options may only be granted under
the 2003 Plan to employees of the Company and its subsidiaries (including those
officers and directors who are also employees).
The 2003 Plan will be administered by the Board of Directors or by a
Stock Option Committee designated by the Board of Directors. The Board or the
Stock Option Committee, as
13
the case may be, has the discretion to determine the eligible employees to whom,
and the prices (not less than the fair market value on the date of grant) at
which options will be granted; the periods during which each option is
exercisable; and the number of shares subject to each option. The Board or the
Stock Option Committee has the authority to interpret the 2003 Plan and to
establish and amend rules and regulations relating thereto.
The 2003 Plan provides that the exercise price of an option granted
thereunder shall not be less than the fair market value of the Common Stock on
the date the option is granted. However, in the event an option is granted under
the 2003 Plan to a holder of 10% or more of the Company's outstanding Common
Stock, the exercise price must be at least 110% of such fair market value.
Under the 2003 Plan, options must be granted before the June 2, 2013
Termination Date. No option may have a term longer than ten years (limited to
five years in the case of an option granted to a 10% or greater stockholder of
the Company). The aggregate fair market value of the Company's Common Stock with
respect to which options are exercisable for the first time by a grantee under
all of the Company's Stock Option Plans during any calendar year cannot exceed
$100,000. Options granted under the 2003 Plan are non-transferable and must be
exercised by an optionee, if at all, while employed by the Company or a
subsidiary or within three months after termination of such optionee's
employment due to retirement, or within one year of such termination if due to
disability or death. The Board or the Stock Option Committee, as the case may
be, may, in its sole discretion, cause the Company to lend money to or guaranty
any obligation of an employee for the purpose of enabling such employee to
exercise an option granted under the 2003 Plan provided that such loan or
obligation cannot exceed fifty percent (50%) of the exercise price of such
option.
NON-QUALIFIED OPTIONS (NQOS) AND WARRANTS
At October 31, 2005, there were outstanding NQOs and Warrants owned by
directors and members of the Scientific Advisory Board exercisable to purchase
an aggregate 93,500 shares at exercise prices ranging from $3.14 to $13.70 per
share. During fiscal 2006, NQOs exercisable to purchase 33,500 shares were
exercised by four individuals. As a result, at October 31, 2006, there were
outstanding NQOs and Warrants owned by directors and members of the Scientific
Advisory Board exercisable to purchase an aggregate 60,000 shares at exercise
prices ranging from $6.80 to $13.70 per share.
See Note 11 of Notes to the Consolidated Financial Statements contained
in the Company's 2006 Annual Report accompanying this Proxy Statement.
14
OPTION GRANTS TO THE COMPANY'S THREE NAMED EXECUTIVE OFFICERS IN LAST FISCAL
YEAR
No options to purchase shares of Common Stock were granted to any of the
Company's three Named Executive Officers in fiscal 2006.
AGGREGATED OPTION EXERCISES BY THE COMPANY'S THREE NAMED EXECUTIVE OFFICERS IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Shares of
Common Stock Value of
Shares of Underlying Unexercised
Common Stock Unexercised In-The-Money
Acquired Upon Options at Options at
Option Exercise Value 2006 Fiscal 2006 Fiscal
Name in Fiscal 2006 Realized Year End (a) Year-End (b)
---- -------------- -------- ------------ ------------
Marc D. Grodman -- -- 4,000 $67,320
Howard Dubinett -- -- 4,000 67,320
Sam Singer -- -- 4,000 67,320
----------
(a) All of these options were exercisable at October 31, 2006.
(b) Based upon the difference between the last sales price for the Common Stock
on NASDAQ on Tuesday, October 31, 2006 and the exercise price.
DIRECTORS' COMPENSATION
Directors who are not Company employees were each paid a $13,750 per
quarter director's fee during fiscal year 2006. Directors who chair a committee
received an additional $2,750 per quarter during fiscal year 2006.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are John Roglieri
(Chairman), Joseph Benincasa, Harry Elias and Gary Lederman. None of such
individuals has ever been an officer or an employee of the Company.
COMPENSATION COMMITTEE REPORT ON COMPENSATION
Through fiscal 2001, 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
fiscal 2002, the Company established a Compensation Committee consisting of
three non-employee directors, Morton L. Topfer (Chairman), Gary Lederman and
John Roglieri. Mr. Topfer resigned as a director and as a member of the
Compensation Committee in February 2004. In March 2004, Dr. Roglieri became the
Chairman of the Compensation Committee and Mr. Elias was elected as a member of
the Committee. Mr. Benincasa was elected as a member of the Committee in June
2005.
In May 1997, the Company executed an employment agreement with Dr.
Grodman which expired on October 31, 2004. Effective November 1, 2004, the
Company executed a new seven year employment agreement with Dr. Grodman, the
terms of which are described above. See
15
"Information Regarding Executive Compensation - Employment Agreements with
Executive Officers."
In May 1997, the Company also executed employment agreements with
Messrs. Dubinett and Singer (each expiring on October 31, 2002). During fiscal
2002, the Compensation Committee authorized extensions of both Messrs. Dubinett
and Singer's contracts for two additional years, with the Company having the
option to extend each agreement for two consecutive one-year periods in
addition. In consideration for Messrs. Dubinett and Singer executing the
extension agreements, the Company agreed that the base compensation during each
extension year would not be less than the total cash compensation paid to such
individual in fiscal 2002. The Company's option to extend Mr. Dubinett and Mr.
Singer's employment agreements has been further extended for a third one-year
period through fiscal 2007.
REPORT
During the summer of calendar year 2004 with the knowledge that Dr.
Grodman's seven year employment agreement was due to expire in October 2004, the
Compensation Committee commenced negotiations with Dr. Grodman for the terms of
a new employment agreement. In the course of its negotiations, the Committee
took into account among other factors as a barometer of Dr. Grodman's
performance as the Company's chief executive officer, the substantial increase
since 1997 in the Company's net revenues, operating income and the market price
of the Common Stock. Another factor taken into account by the Committee was the
compensation being paid to the chief executive officers of a peer group of nine
other publicly owned clinical testing laboratories. The terms of Dr. Grodman's
"split-dollar" insurance arrangement with the Company and the fact that the
proposed new employment agreement did not provide Dr. Grodman with additional
equity compensation was also taken into account. After discussion, each of the
three members of the Compensation Committee at the time (Dr. Roglieri, Mr. Elias
and Mr. Lederman) concluded that the terms of the proposed new employment
agreement were fair to and in the best interests of the Company and its
stockholders and that the proposed compensation thereunder was not excessive.
To provide incentives to Senior Management to increase profitability,
the Compensation Committee adopted a Senior Management Incentive Bonus Plan for
fiscal 2006 more fully described in footnote (a) above to the Summary
Compensation Tables. A similar Incentive Bonus Plan for Senior Management has
been adopted by the Compensation Committee with respect to fiscal 2007.
The Compensation Committee has determined that the base salaries paid
with respect to fiscal 2006, and the terms of the extension agreements with
Messrs. Dubinett and Singer, were reasonable in relationship to the services
performed, the responsibilities assumed and the results obtained, and were in
the best interests of the Company. In connection with Dr. Grodman's
compensation, the Compensation Committee considered the Company's increase in
net revenues, patients serviced, working capital and shareholders' equity in
fiscal 2006 compared with the corresponding period in fiscal 2005. Furthermore,
the compensation paid to Messrs. Grodman, Dubinett and Singer for fiscal 2006
comports with the Compensation Committee's perception of
16
base compensation levels of principal executives employed by other companies,
both public and private.
COMPENSATION COMMITTEE
John Roglieri, Chairman
Joseph Benincasa, Member*
Harry Elias, Member
Gary Lederman, Member
* Mr. Benincasa first became a member of the Compensation Committee in June 2005
and was not a party to the 2004 negotiation of Dr. Grodman's employment
agreement.
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.
("Moore Stephens"), the Company's independent auditors, the
matters required to be discussed by Statement on Auditing
Standards No. 61, "Codification of Statements on Auditing
Standards, AU ss. 380," as modified or supplemented.
(3) The Audit Committee has also received the written disclosures and
the letter from Moore Stephens required by the Independence
Standards Board Standard No. 1 (Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees),
as modified or supplemented, and has discussed with Moore
Stephens, 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, 2006, for filing with the Securities and Exchange
Commission.
Each of the Audit Committee members is independent, as defined in the
Rules of the Nasdaq Stock Market, Inc.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not experts in the fields of
accounting, auditing, or auditor independence. However, the Board of Directors
has determined that Gary Lederman is qualified
17
to serve as the "audit committee financial expert" of the Company as defined in
Item 401(h) of Regulation S-K promulgated by the Securities and Exchange
Commission. Members of the Committee rely without independent verification on
the information provided to them and on the representations made by management
and the independent auditors.
AUDIT COMMITTEE
Gary Lederman, Chairman
Joseph Benincasa, Member
Harry Elias, Member
John Roglieri, Member
STOCK PRICE PERFORMANCE
Set forth below is a line graph comparing the yearly cumulative total
return on the Company's Common Stock for the five fiscal years ended October 31,
2006 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 eight
publicly owned medical laboratories.
COMPARISON OF FIVE YEAR TOTAL RETURN
FOR BIO-REFERENCE LABORATORIES, INC.,
S&P 500 COMPOSITE AND
MEDICAL LABORATORY PEER GROUP
[The table below reprsents a line graph in the printed report.]
BIO REFERENCE
LABORATORIES, INC. S&P 500 INDEX PEER GROUP
------------------ ------------- ----------
100 100 100
144.42 84.89 75.95
331.8 102.55 92.6
281.4 112.21 119.01
379.2 122 124.72
472.6 141.93 150.57
The Medical Laboratory peer group consists of the following companies:
Clarion Technologies, Inc., Enzo Biochem Inc., Laboratory CP of Amer Holdgs,
Medtox Scientific Inc., Neogenomics Inc., Orchid Cellmark Inc., Pharmchem, Inc.,
and Quest Diagnostics Inc.
18
AUDITORS
The firm of Moore Stephens, 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, 2007. Moore Stephens 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 July 19, 2007
Annual Meeting of Stockholders.
AUDIT FEES
Moore Stephens billed the Company approximately $150,800 for
professional services rendered in connection with the audit of the Company's
annual financial statements for the fiscal year ended October 31, 2006 and the
review of the financial statements included in its quarterly reports on Form
10-Q for such fiscal year compared to approximately $187,600 in billings for
such services for the fiscal year ended October 31, 2005. In addition, Moore
Stephens billed the Company approximately $9,500 in fiscal 2006 for its audit of
the Company's 401(k) Plan for calendar year 2005 as compared to approximately
$9,400 of such fees in fiscal 2005 with respect to calendar year 2004.
AUDIT-RELATED FEES
Moore Stephens billed the Company approximately $47,300 for due
diligence services rendered in relation to certain acquisitions during fiscal
2006 and approximately $52,100 for Sarbanes-Oxley ("SOX") related audit fees.
TAX FEES
Moore Stephens billed the Company approximately $44,600 for tax services
for fiscal 2006 and approximately $68,500 for tax services for fiscal 2005. The
fees were billed for tax return preparation.
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
The Audit Committee pre-approved each material non-audit engagement for
services performed by the Company's independent auditor in fiscal 2006. Prior to
pre-approving any such non-audit engagement or service, it is the Committee's
practice to first gather information regarding the requested engagement or
service in order to enable the Committee to assess the impact of the engagement
or service on the auditor's independence.
The Audit Committee has considered whether the provision of tax return
preparation and other professional services to the Company by Moore Stephens is
compatible with such firm maintaining its independence and has concluded that
such firm is independent with respect to the Company in its role as the
Company's principal accountant and auditor.
19
STOCKHOLDER PROPOSALS FOR 2008 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 2008 Annual Meeting of Stockholders (expected to
be held in July 2008), 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
March 1, 2008.
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 Securities and Exchange Commission rules, the information
presented in this Proxy Statement under the captions "Compensation Committee
Report on Compensation," "Audit Committee Report" and "Stock Price Performance"
will not be deemed to be "soliciting material" or deemed filed with the
Securities and Exchange Commission 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.
BY ORDER OF THE BOARD OF DIRECTORS
Marc D. Grodman, President
Elmwood Park, New Jersey
June 14, 2007
20
ANNUAL MEETING OF STOCKHOLDERS OF
BIO-REFERENCE LABORATORIES, INC.
JULY 19, 2007
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
20230000000000000000 0 071907
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
1. To elect two Class I directors, each to serve for a term of three years and
until his successor is elected and qualified (Proposal One).
NOMINEES:
[_] FOR ALL NOMINEES O Marc D. Grodman, M.D.
O Howard Dubinett
[_] WITHHOLD AUTHORITY
FOR ALL NOMINEES
[_] FOR ALL EXCEPT
(See instructions below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here: O
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
To change the address on your account, please check the box at right
and indicate your new address in the address space above. Please note [_]
that changes to the registered name(s) on the account may not be
submitted via this method.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. In their discretion, on all other matters as shall [_] [_] [_]
properly come before the meeting
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE FOREGOING. UNLESS
OTHERWISE SPECIFIED AS ABOVE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF
DIRECTORS (PROPOSAL ONE). IN ADDITION, DISCRETIONARY AUTHORITY IS CONFERRED AS
TO ALL OTHER MATTERS THAT MAY COME BEFORE THE MEETING UNLESS SUCH AUTHORITY IS
SPECIFICALLY WITHHELD. STOCKHOLDERS WHO ARE PRESENT AT THE MEETING MAY WITHDRAW
THEIR PROXY AND VOTE IN PERSON IF THEY SO DESIRE.
PLEASE MARK, SIGN, AND RETURN YOUR PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF
RETURNED IN THE ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES. RECEIPT OF
THE NOTICE OF ANNUAL MEETING OF STOCKHOLDERS, THE ACCOMPANYING PROXY STATEMENT
OF THE BOARD OF DIRECTORS AND THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED
OCTOBER 31, 2006 IS ACKNOWLEDGED.
________________________________ ________________
Signature of Stockholder ________________________________ Date: ________________
________________________________ ________________
Signature of Stockholder ________________________________ Date: ________________
NOTE: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give
full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such.
If signer is a partnership, please sign in partnership name by
authorized person.
BIO-REFERENCE LABORATORIES, INC.
REVOCABLE PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - JULY 19, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a Stockholder of BIO-REFERENCE LABORATORIES, INC. (the
"Company") hereby appoints Marc D. Grodman and Sam Singer or either of them, as
proxy or proxies of the undersigned, with full power of substitution, to vote,
in the name, place and stead of the undersigned, with all of the powers which
the undersigned would possess if personally present, on behalf of the
undersigned, all the shares which the undersigned is entitled to vote at the
Annual Meeting of the Stockholders of BIO-REFERENCE LABORATORIES, INC. to be
held at 9:00 A.M. (local time) on Thursday, July 19, 2007 at the Sheraton
Crossroads Hotel, Crossroads Corporate Center, Route 17 North, Mahwah, New
Jersey 07495-0001 and at any and all adjournments thereof. The undersigned
directs that this proxy be voted as follows:
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)