Edgar Filing: OCEAN BIO CHEM INC

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

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Ocean Bio-Chem, Inc.
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OCEAN BIO-CHEM, INC.
4041 S. W. 47 Avenue
Fort Lauderdale, Florida 33314

May 18, 2007

To our Stockholders:

I am pleased to invite you to attend the Annual Meeting of Stockholders of
Ocean Bio-Chem, Inc. to be held on Friday, August 3, 2007 at 10:00 a.m. at the
Company's corporate offices located at 4041 S. W. 47 Avenue, Fort Lauderdale,
Florida 33314.

Details regarding admission to the meeting and the business to be conducted
are more fully described in the accompanying Notice of Annual Meeting and Proxy
Statement.

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual
Meeting in person, you are requested to complete, date, sign and return the
enclosed proxy card in the enclosed envelope. If you attend the Annual Meeting,
you may vote in person if you wish, even if you previously returned your proxy
card.

We appreciate your support and continued interest in Ocean Bio-Chem, Inc.

Sincerely,

/s/ PETER G. DORNAU
Peter G. Dornau
Chief Executive Officer

OCEAN BIO-CHEM, INC.
4041 S. W. 47 Avenue
Fort Lauderdale, Florida 33314

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Our Stockholders:

Our Annual Meeting of Shareholders of the Company will be held on Friday,
August 3, 2007 at 10:00 a.m. at our corporate offices located at 4041 S. W. 47
Avenue, Fort Lauderdale, Florida 33314 for the following purposes:

1. To elect nine directors to serve until the next Annual Meeting of
Shareholders or until their successors shall be elected and qualified;

2. To approve the 2007 Stock Option Plan (Appendix A);

3. To approve and ratify grants of the Company's restricted common stock
previously issued to employees as compensation;

4 To ratify the appointment of Berenfeld, Spritzer, Shechter & Sheer, as
our independent certified public accountants for the year ending December 31,
2007;

5 To transact such other and further business as may properly come before
the meeting;

Only shareholders of record at the close of business on June 15, 2007 are
entitled to notice of and to vote at the Annual Meeting or any postponements or
adjournments thereof;

Whether or not you plan to attend the Annual Meeting in person, you are
requested to complete, date, sign and return the enclosed proxy card in the
enclosed envelope. If you attend the Annual Meeting, you may vote in person if
you wish, even if you previously returned you proxy card.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE AND
IN FAVOR OF EACH PROPOSAL.

By Order of the Board of Directors

/s/ PETER G. DORNAU
Peter G. Dornau
Executive Officer

Fort Lauderdale, Florida
May 18, 2007

PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS
To Be Held August 3, 2007

General

We are providing these proxy materials in connection with the solicitation
by the Board of Directors of Ocean Bio-Chem, Inc. of proxies to be voted at our
Annual Meeting of Shareholders and at any postponement or adjournment of this
meeting. Our Annual Meeting will be held on August 3, 2007 at the offices of
Ocean Bio-Chem, Inc. located at 4041 S.W. 47th Avenue, Ft. Lauderdale, Florida
33314. In this proxy statement, Ocean Bio-Chem, Inc. is referred to as the
"Company," "we," "our" or "us."

Our principal executive offices are located at 4041 S.W. 47th Avenue, Ft.
Lauderdale, Florida 33314. Our proxy statement and the accompanying proxy card
are first being mailed to our shareholders on or about June 15, 2007 Outstanding
Securities and Voting Rights

Only holders of record of our common stock at the close of business on June
15, 2007 the record date, will be entitled to notice of, and to vote at, the
Annual Meeting. On that date, we had 6,079,316 shares of our common stock issued
and outstanding. Each share of common stock is entitled to one vote at the
Annual Meeting. However, an aggregate of 101,000 of these shares are not
entitled to vote until we obtain shareholder approval of these grants. Please
see "Proposal 2. Ratification of stock grants previously issued to employees as
compensation" on page 16 of this Proxy Statement.

A majority of the outstanding shares of common stock present in person or
represented by proxy constitutes a quorum for the transaction of business at the
Annual Meeting. Abstentions and broker "non-votes" are counted as present and
entitled to vote for purposes of determining whether a quorum exists. A "broker
non-vote" occurs when a nominee holding shares for a beneficial owner does not
vote on a particular proposal because the nominee does not have discretionary
voting power with respect to that item and has not received voting instructions
from the beneficial owner. In tabulating the voting results for any proposal,
shares that constitute broker non-votes are not considered entitled to vote on
that proposal. Thus, broker non-votes will not affect the outcome of any matter
being voted on at the meeting assuming a quorum is obtained. Abstentions will
have the same effect as a vote against a proposal.

Proxy Voting

Shares for which proxy cards are properly executed and returned will be
voted at the Annual Meeting in accordance with the directions given or, in the
absence of directions, will be voted "FOR" Proposal 1- the election of each of
the nine nominees to the Board named herein, "FOR" Proposal 2 - to approve the
2007 Stock Option Plan, "FOR" Proposal 3 - To approve and ratify grants of the
Company's restricted common stock previously issued to employees as
compensation, "FOR" Proposal 4 - To ratify the appointment of Berenfeld,
Spritzer, Shechter & Sheer, as our independent certified public accountants for
the year ending December 31, 2007, and "FOR" Proposal 5 - To transact such other
and further business as may properly come before the meeting. If, however, other
matters are properly presented, the person named in the proxies in the
accompanying proxy card will vote in accordance with their discretion with
respect to such matters.

The manner in which your shares may be voted depends on how your shares are
held. If you own shares of record meaning that your shares of common stock are
represented by certificates in your name so that you appear as a stockholder on
the records of our transfer agent, Registrar & Transfer Company, a proxy card
for voting those shares will be included within this Proxy Statement. You may
vote those shares by completing, signing and returning the proxy card in the
enclosed envelope.

If you own shares in street name, meaning that your shares of common stock
are held by a bank or brokerage firm, you may instead receive a voting
instruction form with this Proxy Statement that you may use to instruct your
bank or brokerage firm how to vote your shares. As with a proxy card, you may
vote your shares by completing, signing and returning the voting instruction
form in the envelope provided.
4

All votes will be tabulated by Inspector of Elections appointed for the
Annual Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. A list of the stockholders entitled to vote at
the Annual Meeting will be available at the Company's office, 4041 S.W. 47th
Avenue, Fort Lauderdale, FL 33314 for a period of ten (10) days prior to the
Annual Meeting for examination by any stockholder.

Attendance and Voting at the Annual Meeting

If you own common stock of record, you may attend the Annual Meeting and
vote in person, regardless of whether you have previously voted by proxy card.
If you own common stock in street name, you may attend the Annual Meeting but in
order to vote your shares at the meeting, you must obtain a "legal proxy" from
the bank or brokerage firm that holds your shares. You should contact your bank
or brokerage account representative to learn how to obtain a legal proxy. We
encourage you to vote your shares in advance of the Annual Meeting by one of the
methods described above, even if you plan on attending the Annual Meeting. If
you have already voted prior to the meeting, you may nevertheless change or
revoke your vote at the Annual Meeting in the manner described below. Revocation

If you own common stock or record, you may revoke a previously granted
proxy at any time before it is voted by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date or by attending the Annual Meeting and voting in person. Any stockholder
owning common stock in street name may change or revoke previously granted
voting instructions by contacting the bank or brokerage firm holding the shares
or by obtaining a legal proxy from such bank or brokerage firm and voting in
person at the Annual Meeting.

MANAGEMENT

The following tables set forth the name and ages of our elected directors
and officers of the Company, as of April 8, 2007.

Name Officers / Directors Age
-------------------- --------------------------------------------- ----
Peter G. Dornau President, Chief Executive Officer and Director 67
Edward Anchel Director and Consultant 60
Jeffrey S. Baracos Chief Financial Officer and Director 59
Sonia B. Beard Director 36
Gregor M. Dornau Vice President of Sales and Director 38
William W. Dudman Vice President of Operations and Director 42
James M. Kolisch Director 55
Laz L. Schneider Director 67
John B. Turner Director 59

Peter G. Dornau is our co-founder and has served as our President, CEO and
Chairman of Board of Directors since 1973.

Jeffrey S. Barocas joined our company in December 2006. In March 2007,
Jeffrey was appointed the position of Vice President-Finance and Chief Financial
Officer upon the retirement of Edward Anchel. For The five years immediately
preceding his employment he held the position of Chief Financial Officer, most
recently for Quality Communications, Inc.

William W. Dudman joined our company in February 2004 as our Vice
President-Operations. For the five years immediately preceding his employment he
had held various management positions within the marine industry, most recently
with West Marine, Inc., our largest customer, from May 1999 to April 2004.

Gregor M. Dornau is the son of Peter G. Dornau, our President and Chief
Executive Officer. He has been employed by the Company as a salesman since 1990
and during 2005 he was elected to serve as Vice President-Sales.

James M. Kolisch joined our Board of Directors as an outside director in
May 1998. Mr. Kolisch has been engaged in the insurance industry and served as
president of USI Florida, or its predecessor company, an entity that sources
most of the our insurance needs, for a period of approximately twenty-five
years. Mr. Kolisch serves on the Board of Directors' Audit Committee.
5

Laz L. Schneider is, and has been for the past five years, an attorney in
private practice and was elected to serve as an outside Director of the Company
during May 1998. Mr. Schneider is a partner at Berger, Singerman, P.A., a law
firm that serves as our lead counsel in various corporate and litigation
matters.

John B. Turner joined our Board of Directors in June 2002. During the past
five years, Mr. Turner has been retired. Prior to his retirement, he was an
insurance executive. His professional experience in the aforementioned areas
spans in excess of twenty-five years. Mr. Turner serves on the Board of
Directors' Audit Committee.

Sonia B. Beard is a Florida Certified Public Accountant working for Walt
Disney World since 1997. She currently holds the position as the Manager of
Concept Development for the Revenue Lines of Business of Walt Disney World. Ms.
Beard has in excess of twelve years financial experience. She is an outside
director and serves as the Chairperson and Financial Expert of the Board of
Directors' Audit Committee.

Edward Anchel resigned from his position as Vice President-Finance & Chief
Financial Officer on April 2nd, 2007. Edward Anchel will consult with the
company. For the five years immediately preceding his employment with Ocean
Bio-Chem, Inc., he was an officer of a privately owned manufacturing company and
public companies.

All directors will serve until the next annual meeting of shareholders or
until their successors are duly elected and qualified. Each officer serves at
the discretion of the board of directors. There are no arrangements or
understandings between any of the officers or directors of our Company and the
Company or any other persons pursuant to which any officer or director was or is
to be selected as a director or officer.

CORPORATE GOVERNANCE AND RELATED MATTERS

The Board meets regularly during the year to review matters related to our
company and to act on matters requiring Board approvals. All persons who were
serving as directors during fiscal 2006 attended at least 75% of the aggregate
of the meetings of the Board and committees of which they were members. Our
Board of Directors held two (2) meetings during the year ended December 31,
2006, at which all the directors were present. We have a standing Audit
Committee and our nominating committee consists of our entire Board of
Directors. We do not have a separate compensation committee. The Company
encourages, but does not require, its directors to attend the Company's Annual
Meeting of Shareholders. Last year, all of the directors attended the Annual
Meeting of Shareholders.

Audit Committee

The Audit Committee assists the Board in fulfilling its oversight
responsibility relating to our financial statements and financial reporting
process, the qualifications, independence and performance of our independent
auditors, the performances of our internal audit functions and our compliance
with legal and regulatory requirements. The members of the Audit Committee
during fiscal 2006 were Sonia B. Beard, our Chairperson, James M. Kolisch, and
John B. Turner. The Board has designated Sonia B. Beard as the "audit committee
financial expert," as defined by Item 401(h) of Regulation S-K of the Securities
Exchange Act of 1934.The shareholders ratified a charter for the Audit Committee
at our Annual Meeting of Shareholders held on June 9, 2000. On March 24, 2004,
the Board of Directors adopted a Restated Audit Committee Charter.

The Audit Committee met three (3) times since last year's Annual Meeting of
Shareholders. We believe that all members of the Audit Committee are
independent, as defined in Rule 4200(a)(15) of the NASDAQ listing standards.

Nominating Committee

Our entire Board of Directors serves as our Nominating Committee. Our
Nominating Committee is responsible for identifying individuals qualified to
become members of the Board of Directors, and nominating persons for election as
directors at the annual meeting of shareholders and the persons to fill any
vacancies on the Board. Our Nominating Committee does not have a Nominating
Committee Charter. The Board of Directors does not believe that the Company
would derive any significant benefit from a separate nominating committee or a
Nominating Committee Charter.

Directors are not required to meet any specific or minimum qualifications.
The Board attempts to identify persons who have the requisite experience and
expertise to be an asset to our Company.
6

The Board will consider nominees for the Board of Directors recommended by
shareholders. Nominations by shareholders must be in writing, must include the
full name of the proposed nominee, a brief description of the proposed nominee's
business experience for at least the previous five years, and a representation
that the nominating shareholder is a beneficial or record owner of our common
stock. Any such submission must also be accompanied by the written consent of
the proposed nominee to be named as a nominee and to serve as a director if
elected. Nominations must be delivered to the Board at the following address:

Board of Directors
Ocean Bio-Chem, Inc.
4041 SW 47th Avenue
Fort Lauderdale, Florida 33314-4023

The Board of Directors is required to review the qualifications and
backgrounds of all directors and nominees (without regard to whether a nominee
has been recommended by shareholders), as well as the overall composition of the
Board of Directors, and recommend a slate of directors to be nominated for
election at the annual meeting of shareholders, or, in the case of a vacancy on
the Board of Directors, elect a director to fill such vacancy.

Controlled Company Status

NASDAQ marketplace rules require that the board of directors of NASDAQ
listed companies consist of a majority of directors who are independent within
the meaning of the rules. The rules also impose additional independence
requirements on members of certain committees of the Board. The Company has
determined that, except with respect to the required independence of members of
the Audit Committee, it is exempt from the application of these rules as a
"controlled company," as defined in the rules. The Company with than 50% of the
voting power of its capital stock is held by a single group, consisting of Peter
G. Dornau and his son, Gregor M. Dornau.

Directors' Compensation

During fiscal 2006, our employee directors did not receive any additional
or special compensation for serving as directors. Our non-employee directors did
not receive equity compensation for their services in fiscal 2006. However, on
April 3, 2006 each outside director received a grant of options to acquire
10,000 shares of our common stock at an exercise price of $1.08 per share, the
fair market value of the underlying shares on the date of grant. These options
are immediately exercisable and expire on April 2, 2016.

Compliance with Section 16(a) of the Securities Exchange Act

Based solely on reviews of Forms 3 and 4 furnished to us by the
aforementioned individuals, it was determined that no reporting person failed to
file a timely submission of ownership changes and that we were in compliance
with Rule 16(a)3(e) of the Exchange Act during our most recent fiscal year.

Shareholder Communications with the Board of Directors

Any shareholder who wishes to send communications to the Board of Directors
should mail them addressed to the intended recipient by name or position in care
of: Corporate Secretary, Ocean Bio-Chem, Inc., 4041 S.W. 47th Avenue, Fort
Lauderdale, FL 33314. Upon receipt of any such communications, the Corporate
Secretary will determine the identity of the intended recipient and whether the
communication is an appropriate shareholder communication. The Corporate
Secretary will send all appropriate shareholder communications to the intended
recipient. An "appropriate shareholder communication" is a communication from a
person claiming to be a shareholder in the communication the subject of which
relates solely to the sender's interest as a shareholder and not to any other
personal or business interest.

In the case of communications addressed to the Board of Directors, the
Corporate Secretary will send appropriate shareholder communications to the
Chairman of the Board. In the case of communications addressed to any particular
directors, the Corporate Secretary will send appropriate shareholder
communications to such director. In the case of communications addressed to a
committee of the board, the Corporate Secretary will send appropriate
shareholder communications to the Chairman of such committee.
7

COMPENSATION DISCUSSION AND ANALYSIS

The following Compensation Discussion and Analysis describes our executive
compensation philosophy, objectives and policies and the components of
compensation for our executive officers who are identified in the Summary
Compensation Table on page 11 (the "Named Executive Officers")

Compensation Philosophy and Objectives - Our executive compensation
programs are designed and administered to promote the following philosophy and
objectives:

Attract and Retain. Compensation should reflect the value of the job in the
marketplace. To attract and retain exceptional executives, we must remain
competitive with the compensation programs of our peer group, other publicly
traded south Florida companies, which compete with us for talent.

Motivate and Engage. Compensation should motivate and engage our executive
officers to perform at the highest level and in a manner that is consistent with
our business goals and objectives.

Reward Performance. Compensation should be dependent on, and reward
executives on the basis of, both individual and company performance with an
increasing proportion of pay directly linked to company performance as an
executive's level of responsibility increases.

Alignment with our Shareholders. Compensation should be structured to align
our executives' interests with the interests of our shareholders with the
ultimate goal of improving shareholder value.

We believe that the overall structure of our compensation programs should
be similar across our management team. Accordingly, while the compensation
levels and programs will always reflect differences in job responsibilities and
marketplace considerations, the types of compensation programs provided to our
Named Executive Officers are fundamentally the same as those provided to our
management team.

Setting Executive Compensation

We do not have a standing Compensation Committee of the Board of Directors.
Our Company is controlled by one shareholder, our President and CEO, Peter G.
Dornau. Mr. Dornau is actively involved in the recurring operations and has
relied on setting compensation arrangements in consultation with other key
executives of the Company and independent Board of Directors. All decisions
reached by this group are disclosed in various filings with the United States
Securities and Exchange Commission.

Accordingly, we have reached the decision that, given the size of our
Company and Board, not to have a standing compensation committee for this
purpose

In making compensation decisions, the Company compares our executive
compensation program as a whole and each principal component of the program
against the local job market in south Florida.

Components of 2006 Executive Compensation

For 2006, the principal components of our executive compensation program
were:

base salary;

annual performance bonus;
8

equity-based compensation in the form of stock options; stock awards; and

benefits and perquisites. These same components were provided in 2005. The
Company does not have a pre-established policy or target for the allocation
between cash and non-cash compensation or short-term and long-term compensation.
Instead, the Company annually reviews the comparative data and the current facts
and circumstances relating to Ocean Bio- Chem, Inc. and its executives to
determine an appropriate mix of compensation that furthers our compensation
philosophy and objectives.

Base Salary. We use base salary as the guaranteed component of the Named
Executive Officers' annual cash compensation and believe that it is an important
tool in attracting and retaining executives and rewarding individual
performance. The Company reviews each Named Executive Officer's base salary on
an annual basis.

During this review, the Company considers:

the base salary levels of similarly-situated executives in the local south
Florida market;

each executive's individual performance and contributions to Ocean
Bio-Chem; and each executiv's level of experience and responsibility.

Annual Performance Bonus - The Company provides an annual performance bonus
component of our executive compensation program. The bonus is a cash-based
performance incentive designed to motivate our Named Executive Officers and
other key employees and reward them based on achievement of performance goals
that we believe align the interests of the executives with the interests of our
shareholders and create shareholder value. Because motivating our Named
Executive Officers and other key employees to contribute to, and rewarding them
on the basis of, performance is a fundamental part of our executive compensation
philosophy, the annual performance bonus has historically been awarded based on
the profit performance of the Company for the previous year.

In 2006, we did not achieve the minimum levels of net income to qualify for
annual performance bonuses. As a result, none of the Named Executive Officers
earned a cash performance bonus during the current year.

The Company does consider award of bonuses on a discretionary basis.

The Board believes that external factors outside of managements' control,
can reward executives for their efforts.

Second, the Company believes that the Discretionary Awards incentivize the
Named Executive Officers to remain with us and promote our long-term success.

The Company can elect to pay Discretionary Awards in the form of stock
options or restricted stock in an effort to further a broader range of our
executive compensation objectives.

In addition, the Company reviews the cash performance bonuses awarded to
similarly-situated executive officers in the south Florida market.

Equity-Based Compensation

For many years, the Company has granted our Named Executive Officers (and
other key employees) annual stock option grants and/or restricted stock awards.
The Company believes that, because stock options and restricted stock have value
only if the price of our Common Shares increases, stock options and restricted
stock align the interests of our Named Executive Officers with the interests of
our shareholders with the ultimate goal of improving shareholder value. The
Company further believes that stock options and restricted stock encourage our
Named Executive Officers to focus on our long-term performance and increase
their investment in Ocean Bio-Chem.
9

The Board approves all grants stock options in accordance with our
shareholder-approved 1994, 2002 and 2007 Stock Incentive Plan as Amended. As a
result, all stock options are awarded at the closing price of our Common Shares
on the NASDAQ on the date of grant.

The annual stock option grants vest and generally become exercisable over a
five-year period in 20% increments as of the date of grant and expire five years
from the date of grant. In addition to focusing our Named Executive Officers on
long-term performance, the Board believes that the five-year vesting term also
aides in the retention of our Named Executive Officers.

In determining the size of the stock option awards, the Board considers the
following:

the long-term incentive opportunity for similarly-situated executive
officers, and

individual attributes such as level of responsibility, individual
performance, contributions to Ocean Bio-Chem, Inc. and ability to impact our
future performance.

On November 6, 2006 Incentive stock options were granted to our Named
Executive Officers as well as an additional ten (10) other employees. The total
awarded options aggregated 105,000 shares of which Messrs. Peter G. Dornau,
Edward Anchel and Jeffrey J. Tieger each received options representing 15,000
shares and Messrs. William W. Dudman and Gregor M. Dornau received 22,000 and
21,000 options, respectively.

During May 2007 we issued 101,000 shares of our common stock bearing a
restricted legend to certain officers and other key employees as a component of
their compensation. At the date of grant the shares had a market value of $1.66
each. Shares were awarded as follows:

Officers:

Peter G. Dornau, President and CEO 15,000 shares
Jeffrey S. Barocas, Vice President and CFO 5,000 shares
William Dudman, Vice President 15,000 shares
Gregor M. Dornau 15,000 shares
George Lindsey 3,000 shares
-------
53,000 shares
Other employees, as a group (15 individuals) 48,000 shares
-------
Total restricted shares awarded 101,000 shares
=======

Benefits and Perquisites

Employee Benefits. Ocean Bio-Chem, Inc provides all of its employees,
including our Named Executive Officers, with the opportunity to save for
retirement through our SAR/SEP Savings Plan or a 401(k) savings plan which are
sponsored by two of our subsidiaries, Star Brite Distributing, Inc. and Kinpak
Inc., respectively. Both plans are non-contributory by us and are entirely
funded by employee contributions.

In an effort to maintain a healthy workforce, we provide all employees,
including our Named Executive Officers, with the opportunity to participate in
various health and welfare benefit programs, including medical, dental, life and
short-term disability insurance. We share the cost of these benefit programs
with our employees. Our Named Executive Officers participate in these programs
on the same terms as our other employees.
10

Prerequisites. We do not provide our Named Executive Officers with any
prerequisite benefits.

EXECUTIVE COMPENSATION

The following table sets forth the amount of compensation for the fiscal
years ended December 31, 2006, 2005, and 2004 for Peter G. Dornau and each of
our executive officers, whose aggregate compensation exceeded $100,000 on an
annual basis (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

Name and Principal Position Annual compensation Long term compensation
---------------------------- -------------------------------------------- -----------------------
Restricted
Stock Options/
Year Salary Bonus Awards SARs
---- -------- ------- ---------- -------

Peter G. Dornau, CEO 2006 $105,249 $ - $27,540(1) 15,000
2005 $106,983 $11,500 $23,850(2) -
2004 $108,450 $13,000 $21,875(3) 50,000

Edward Anchel, Former CFO 2006 $ 96,384 $ - $27,540(1) 15,000
2005 $ 97,804 $11,500 $23,850(2) -
2004 $ 96,900 $13,000 $21,875(3) 50,000

Jeffrey J. Tieger, Former VP 2006 $ 62,691 $ - $13,770(1) 15,000
2005 $ 62,759 $ 7,000 $11,925(2) -
2004 $ 63,339 $ 8,500 $12,500(3) 50,000

William Dudman, VP 2006 $ 87,555 $ - $13,770(1) 22,000
2005 $ 88,777 $ 8,000 $11,925(2) -

Gregor M. Dornau, VP 2006 $ 94,790 $ - $13,770(1) 21,000
2005 $ 96,725 $ 8,000 $11,925(2) -

Messrs. William Dudman and Gregor Dornau are only reported for the years
ended December 31, 2006 and 2005 as they either did not reach the required
reporting threshold or were not officers in 2004.

(1) Represents the aggregate value on the date of grant of restricted stock
awards made during April, 2006 with respect to 30,000 shares of the Company's
common stock awarded to each of Messrs. Peter Dornau and Edward Anchel, and
15,000 shares of the Company's common stock awarded to each of Messrs. Jeffrey
J. Tieger, William W. Dudman and Gregor Dornau, based on the closing price of
the shares on the award date.

(2) Represents the aggregate value on the date of grant of restricted stock
awards made during April, 2005 with respect to 30,000 shares of the Company's
common stock awarded to each of Messrs. Peter Dornau and Edward Anchel, and
15,000 shares of the Company's common stock awarded to each of Messrs. Jeffrey
J. Tieger, William W. Dudman and Gregor Dornau, based on the closing price of
the shares on the award date.

(3) Represents the aggregate value on the date of grant of restricted stock
awards made during April, 2004 with respect to 35,000 shares of the Company's
common stock awarded to each of Messrs. Peter Dornau and Edward Anchel, and
20,000 shares of the Company's common stock awarded to each of Mr. Jeffrey J.
Tieger, based on the closing price of the shares on the award date.

Option Grants in Last Fiscal Year

On November 6, 2006 Incentive stock options were granted to our Named
Executive Officers as well as an additional ten (10) other employees. The total
awarded options aggregated 135,000 shares of which Messrs. Peter G. Dornau,
Edward Anchel and Jeffrey J. Tieger each received options representing 15,000
shares and Messrs. William W. Dudman and Gregor M. Dornau received 22,000 and
21,000 options, respectively.

Aggregate Option Exercises in Fiscal 2006 and Option Values

The following table sets forth information as to the exercise of stock
options during the fiscal year ended December 31, 2006, by our Named Executive
Officers and the fiscal year-end values of unexercised options.

Shares Number of options/SAR's/ Value of in-the-money options/
acquired Value Warrants at end of fiscal SAR's at end of fiscal year (1)
Name by exercise realized exercisable unexercisable exercisable unexercisable
--------------- ------- --------- ----------- ------------- ----------- -------------

Peter G. Dornau 27,500 $ 19,250 1,155,500 155,500 $1,260,545 $ 54,545
Edward Anchel 27,500 22,025 50,000 50,000 43,636 54,545
Jeffrey J. Tieger 27,500 22,025 40,000 6,000 169,636 54,545
William W. Dudman - - 50,000 24,000 6,545 26,182
Gregor M. Dornau 22,000 17,620 36,000 49,000 39,273 53,455

------- --------- --------- ------- ---------- --------
104,500 $ 80,920 1,393,000 223,000 $1,519,635 $243,272
======= ========= ========= ======= ========== ========

(1) The value of unexercised "in-the-money" options at December 31, 2006
was calculated by determining the difference between $2.10, the fair market
value of the underlying Common Stock at December 31, 2006 and the option price.
An option is "in-the-money" when the fair market value of the underlying Common
Stock exceeds the exercise price of the option.

Stock Option Plans

We have four stock options plans: our 1994, and 2002 Incentive Stock Option
Plans (the "1994 Plan", "2002 Plan", and "2007 Plan") and the 2002 Non-Qualified
Stock Option Plan. All of our employees are eligible to be selected to
participate in our 1994, 2002 and 2007 Qualified Plans and in our 2002
Non-Qualified Stock Option Plan. The Plans are administered by the Board of
Directors, which selects individuals to be participants and determines the type
and number of awards to be granted.

The option price for stock options granted under all Plans is stipulated to
be not less than the fair market value of Common Stock on the date of grant and
the term of each option is fixed by the Committee. Options become exercisable as
determined by the Board of Directors.
12

Other Benefits

Securities authorized for issuance at December 31, 2006 under equity
compensation plans:
Number of securities to be issued Weighted average Number of securities
upon exercise of outstanding exercise price of remaining available
options, warrants & rights options, warrants for future issuance
and rights outstanding under equity
compensation plans
---------------------------------- ---------------------- -------------------

Equity compensation plans approved by security holders:
Plan stock options granted (1) 714,500 $1.23 45,000
Non plan stock options granted (2) 231,000 .76 -
Warants (3) 1,000,000 .88 -

Equity compensation plans not approved by security - - -
holders:
Stock options and restricted stock awards
--------- ----- ------
Total equity compensation plans approved and not 1,945,500 $1.02 45,000
approved by security holders ========= ===== ======

(1) Includes 400,000 options granted under the 2002 Qualified Incentive
Stock Option Plan, 155,000 options under the 2002 Non-Qualified Stock Option
Plan and 159,500 options under the 1994 Qualified Incentive Stock Option Plan.

(2) Includes 231,000 options granted to Messrs. Peter G. Dornau and Jeffrey
J. Tieger in conjunction with a loan made to the Company by an entity 50% owned
by each of them.

(3) Includes 1,000,000 warrants issued to Peter G. Dornau in connection
with a $1.5 million Subordinated Revolving Line of Credit he extended to the
Company during 2005. Such warrants are exercisable 500,000 at $1.03 per share
and 500,000 exercisable at $.88 per share. The exercise price equals the fair
market value of the underlying security at date of issuance plus a 10% premium
factor.

Restricted Stock Awards as Compensation

Officers:
Peter G. Dornau, President and CEO 15,000 shares
Gregor M. Dornau 15,000 shares
George Lindsey 3,000 shares
-------
53,000 shares
Other employees, as a group (15 individuals) 48,000 shares
-------
Total restricted shares awarded 101,000 shares
=======
13

REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION

Executive Compensation Policy

The Board of Directors (the "Committee") is responsible for setting the
policies and approving our practices in compensating our executive officers. In
carrying out its responsibility in 2006, the Committee considered the following:

-our financial performance;

-our policies and practices for compensation of employees generally;

-our historical philosophy to reward according to merit, commitment to, and
performance of, the Company.

In furtherance of this philosophy, the compensation of our executives
generally consists of three components: base salary, annual cash incentives and
long-term performance-based incentives.

Base Salaries

The base salary of our executives is designed to be competitive with base
salaries paid to executives with similar responsibilities and consistent with
the salaries paid in the applicable geographical areas.

Incentive Cash Bonuses

Generally, we award cash bonuses to our management employees and other
employees, based on their personal performance in the past year and overall
performance of our company.

Long Term Compensation Stock Option Grants

We have utilized stock options to motivate and retain executive officers
and other employees for the long-term. We believe that stock options closely
align the interests of our executive officers and other employees with those of
our shareholders and provide a major incentive to building stockholder value.
Options are typically granted annually, and are subject to vesting provisions to
encourage officers and employees to remain employed with the Company.

The number of stock options granted to an executive is determined by the
Board of Directors and depend principally upon an individual's level of
responsibility within the Company and performance by the individual. Since stock
options are granted at the average market price on the date of grant and have
value only if the market price on the underlying common stock increases, and
since the exercisability of options vests over a five (5) year period after the
grant date, the Board of Directors believes stock options provide an appropriate
long-term incentive for those receiving grants, as well as stability in the work
force. In addition we, from time to time, award direct grants of our restricted
common stock to encourage stock ownership and retention of common stock by
employees.

Relationship between our Compensation Policies and Corporate Performance

We believe that our executive compensation policies correlate with our
corporate performance. Our stock options are usually granted at a price equal to
or above the fair market value of our common stock on the date of grant. As
such, our officers only benefit from the grant of stock options if our stock
price appreciates. Generally, we try to tie bonus payments to our Company's
financial performance. However, if an individual has made significant
contributions to our company, we will provide them with a bonus payment for
their efforts even if our company's financial performance has not been strong.

Compensation of Chief Executive Officer

Peter G. Dornau served as our Chief Executive Officer during fiscal 2006.
He received a base salary of $105,249 and restricted stock valued at $27,540.
Mr. Dornau's compensation is determined annually based on the Company's
financial and operational performance for the preceding year.
14

SECURITY OWNERSHIP OF DIRECTORS AND EXECUIVES

The following table sets forth information at December 31, 2006 with
respect to the beneficial ownership of our common stock by holders of more than
5% of such stock and by all of our directors and officers as a group:

Title of Name and Address of Amount and Nature of Percent
Class Beneficial Owner Beneficial Ownership of Class
------------- ---------------------------------------- -------------------- -------

Common Peter G. Dornau, President, CEO, 5,533,368 (1) 60.4%
Chairman Board of Directors
Fort Lauderdale, FL 33317

Common Edward Anchel, Former Vice President- 323,451 (2) 3.5%
Finance, CFO, Director
Boynton Beach, FL 33437
Common Jeffrey J. Tieger, 414,780 (3) 4.5%
Former Vice President-Advertising,
Secretary, Director
Plantation, FL 33314
Common William W. Dudman, Vice President-Operations 55,300 (4) .6%
Plantation, FL 33317
Common Gregor M. Dornau, Vice President-Sales 271,780 (5) 3.3%
Fort Lauderdale, FL 33314
Common James M. Kolisch, Director 56,167 (6) .6%
Coral Gables, FL 33114
Common Laz L. Schneider, Director 40,000 (7) .4%
Fort Lauderdale, FL 33305
Common John B. Turner, Director 69,463 (8) .8%
Miami, FL 33186
Common Sonia B. Beard, Director 30,000 (9) .4%
Merritt Island, FL 32952
--------- -----
Common All directors and officers as a group 6,794,309 10) 74.1%
8 individuals ========= =====

(1) Includes 1,155,500 shares that are issuable upon the exercise of stock
options and/or warrants within 60 days of December 31, 2006.

(2) Includes 40,000 shares that are issuable upon the exercise of stock
options within 60 days of December 31, 2006.

(3) Includes 155,500 shares that are issuable upon the exercise of stock
options within 60 days of December 31, 2006.

(4) Includes 6,000 shares that are issuable upon the exercise of stock
options within 60 days of December 31, 2006.

(5) Includes 36,000 shares that are issuable upon the exercise of stock
options within 60 days of December 31, 2006.

(6) Includes 18,000 shares that are issuable upon the exercise of stock
options within 60 days of December 31, 2006.

(7) Includes 40,000 shares that are issuable upon the exercise of stock
options within 60 days of December 31, 2006.

(8) Includes 40,000 shares that are issuable upon the exercise of stock
options within 60 days of December 31, 2006.

(9) Includes 30,000 shares that are issuable upon the exercise of stock
options within 60 days of December 31, 2006.

(10) Includes 1,543,000 shares that are issuable upon the exercise of stock
options and/or warrants within 60 days of December 31, 2006.

(11) Effective December 10, 2006 the Voting Proxy granted by Gregor M.
Dornau to his father, Peter G. Dornau, our President and CEO was terminated. As
of such date Gregor M. Dornau has sole voting power over the shares he owns.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On November 10, 2006, Mr. Dornau notified the Company that he is exercising
his rights to convert a $1.5 million loan made to the Company into 1.5 million
shares. Such transaction was approved unanimously by the members of our Board of
Directors (with Mr. Dornau abstaining from the vote). Mr. Dornau loaned of the
Company $1.5 million in order to bolster working capital, we issued warrants to
Mr. Dornau to purchase a maximum of 1 million shares of our common stock. Such
warrants were exercisable 500,000 shares at $1.13 and 500,000 shares at $.863.
The exercise prices were determined by the closing bid of our stock plus ten
(10) percent on each date of grant. In addition, he had the right, at his sole
discretion, to convert such debt into a maximum of 1.5 million shares of our
common stock at the rate of $1.00 per share

On May 1, 1998, we entered into a ten-year lease for approximately 12,700
square feet of office and warehouse facilities in Fort Lauderdale, Florida from
an entity fifty percent owned each by Messrs. Peter G. Dornau and Jeffrey J.
Tieger, our President and former Vice President-Advertising, respectively. The
lease required a minimum rental of $94,800 the first year and provides for a
maximum 2% increase on the anniversary of the lease throughout the term.
Additionally, the landlord is entitled to collect from us its pro-rata share of
all taxes, assessments, insurance premiums, operating charges, maintenance
charges and any other expenses, which normally arise from ownership. We believe
that the terms of this lease are comparable to those of similar properties in
the same geographic area of the Company available from unrelated third parties.
Rent charged to operations during the years ended December 31, 2006, 2005 and
2004 amounted to approximately $100,500 each year.

We acquired the rights to the Star brite trademark and related products for
the United States and Canada in conjunction with our original public offering
during March 1981. Peter G. Dornau, our president is the direct or beneficial
owner of three companies that market Star brite products outside the United
States and Canada. These companies serve as distributors of our products and the
terms of payment are the same as for our other customers. At December 31, 2006
and 2005, we had amounts due from affiliated companies, which are directly or
beneficially owned by our president aggregating approximately $231,200 and
$29,022, respectively.

Sales to such affiliates were sold at cost of material and labor plus an
amount to cover manufacturing overhead costs. In addition, the affiliates are
charged for their allocable share of administrative expenses of the Company. The
sales to affiliates aggregated approximately $622,300, $826,900, and $616,800
during the years ended December 31, 2006, 2005, and 2004, respectively; and
allocable administrative fees aggregated $350,000, $300,000 and $300,000,
respectively for such periods.

A subsidiary of ours currently uses the services of an entity that is owned
by our president to conduct product research and development. Such entity
received $30,000 per year during the years ended December 31, 2006, 2005 and
2004 under such relationship.

AUDIT COMMITTEE REPORT

The Audit Committee is responsible for assisting the Board in monitoring
(1) the quality and integrity of our financial statements, (2) our compliance
with regulatory requirements and (3) the independence and performance of our
independent auditors. Among other responsibilities, the Audit Committee reviews,
in its oversight capacity, our annual financial statement with both management
and the independent auditors and meets periodically with our independent
auditors to consider their evaluation of our financial and internal controls.
The Audit Committee also recommends to the Board of Directors the selection of
the Company's independent certified public accountants. The Audit Committee is
composed of three directors and operates under a written charter adopted and
approved by the Board of Directors. During 2006, all of the Audit Committee
members were non-employee directors and were independent as defined by the
NASDAQ listing standards in effect during 2006. The members of the Audit
Committee during 2006 were Sonia B. Beard, James M. Kolisch, and John B. Turner.
Mrs. Beard served as the Chairperson of the Audit Committee.

In discharging its duties during 2006, the Audit Committee met with and
held discussions with management and our independent auditors, Berenfeld,
Spritzer, Shechter & Sheer. Management represented to the independent auditors
that our audited financial statements were prepared in accordance with generally
accepted accounting principles. The Audit Committee also discussed with our
auditors the matters required to be discussed by Statement on Auditing Standards
No. 61, "Communications with Audit Committees." In addition, our auditors,
provided the Audit Committee with the written disclosures and the letter
required by Independence Standards Board Standard No. 1, "Independence
Discussion with Audit Committees," and the Audit Committee discussed with our
auditors their independence.

Based on the above-mentioned review and discussions with management and the
independent auditors, the representations of management and the report of the
independent auditors to our committee, the Audit Committee recommended that the
Board of Directors include the audited consolidated financial statements in the
Company's Annual Report on Form 10-K for the year ended December 31, 2006.

Audit Committee submitted on March 16, 2007

Sonia B. Beard, Chairperson
James M. Kolisch
John B. Turner

PROPOSALS TO THE SHAREHOLDERS

PROPOSAL 1. ELECTION OF DIRECTORS

The nine persons set forth alphabetically below, each of whom is currently
a director, are proposed to be re-elected as directors at the Annual Meeting. If
elected, each of these directors will hold office until the next Annual Meeting
of Stockholders in the year 2007 or until his or her successor is duly elected
and qualified.

Edward Anchel
Jeffrey Barocas
Sonia B. Beard
Peter G. Dornau
Gregor Dornau
William Dudman
James M. Kolisch
Laz L. Schneider
John B. Turner

All of the nominees are currently serving as directors. Each nominee has
agreed to be named in this Proxy Statement and to serve as a director if
elected. For biographical information regarding the nominees, see "Management"
on pages 6-7 of this Proxy Statement. Management expects that each nominee will
be available for election, but if any of them is not a candidate at the time of
the election occurs, it is intended that such proxy will be voted for the
election of another nominee to be designated by the Board of Directors to fill
such vacancy.

Vote Required and Recommendation

The nine nominees for election to the Board of Directors who receive a
majority of votes cast, in person or by proxy, shall be elected directors.
Shareholders do not have the right to cumulate their votes for directors. In the
election of directors, an abstention or broker non-vote will have no effect on
the outcome. The Board recommends stockholders to vote "FOR" each of the
nominees for director set forth above.

PROPOSAL 2. APPROVAL OF 2007 INCENTIVE STOCK OPTION PLAN

At the Annual Meeting, shareholders will be asked to approve the 2007
Incentive Stock Option Plan (the "Plan"). The Plan includes 400,000 shares of
common stock of the Company.

On April 16, 2007, the Board of Directors adopted the Company's 2007
Incentive Stock Option Plan (the "Option Plan"). The number of shares of the
Company's Common Stock reserved for issuance under the Plan is 400,000 shares.

The Plan is summarized below. A copy of the Plan is attached as an exhibit
to this Proxy Statement. This Summary is not intended to be a complete
description of the Plan, and is qualified in its entirety by the actual text of
the Plan to which reference is made.

Plan Summary

General. The purpose of the Plan is to attract and retain the best
available employees of the Company and its subsidiaries, to provide additional
incentive to such persons and to promote the success of the Company. Under the
Plan, a key employee is eligible to receive incentive stock options ("ISOs") (as
defined in Section 422 (formerly Section 422A) of the Internal Revenue Code of
1986, as amended (the "Code").

The Committee administers and interprets the Plan and is authorized to
grant options to all eligible employees, including officers. The maximum number
of shares of Common Stock approved for issuance under the Plan is 400,000. The
Committee designates the optionees, the number of shares subject to such award
and the terms and conditions of each award. The purchase price under each option
must be 100% of the fair market value of the Common Stock of the Company on the
date of award. No option shall be exercisable more than ten years after the date
the option is awarded. An ISO may not be granted under the Plan to an employee
who owns more than 10% of the outstanding Common Stock unless the purchase price
is 110% of the fair market value of the Common Stock at the date of award and
the option is not exercisable more than five years after it is awarded.

The Committee may provide that the purchase price for shares subject to an
option be paid in full by cash or check. Options may not be transferred other
than by will or the laws of descent and distribution. No option shall be
exercisable during the lifetime of an optionee by any person other than the
optionee or his guardian or legal representative. Unless sooner terminated, the
Plan will terminate March 21, 2017, and no awards may thereafter be granted
under the Plan. Outstanding options on March 21, 2017 will remain outstanding
through their respective expiration dates.

Amendment of Plan. The Board may amend or terminate the Plan without the
approval of the shareholders, unless shareholder approval is necessary to comply
with any applicable tax or regulatory requirements. If any amendment or
termination materially and adversely affects the rights of any award holder then
outstanding, such amendment or termination shall not be deemed to alter such
rights unless the holder shall consent thereto.

Tax Status of Options

The following discussion is based on relevant provisions of the Code, the
Treasury Regulations promulgated thereunder, published revenue rulings and
judicial decisions in effect at the date hereof. There can be no assurance that
future changes in applicable law or administrative and judicial interpretations
thereof will not adversely affect the tax consequences discussed herein or that
there will not be differences of opinion as to the interpretation of applicable
law.

Incentive Stock Options. All stock options that qualify under the rules of
Section 422 of the Code will be entitled to ISO treatment. Among other
requirements, to receive ISO treatment, an optionee is not permitted to dispose
of the acquired stock (I) within two years after the option is granted or (ii)
within one year after exercise. In addition, the individual must have been an
employee of the Company for the entire time from the date of granting of the
option until three months (one year if the employee is disabled) before the date
of the exercise. The requirement that the individual be an employee and the
two-year and one-year holding periods are waived in the case of death of the
employee. If all such requirements are met, no tax will be imposed upon exercise
of the option, and any gain upon sale of the stock will be entitled to capital
gain treatment (assuming the stock constitutes a capital asset in the hands of
the optionee). The applicable capital gain rate depends on how long the ISO
shares are held after exercise. If ISO shares are sold one year or later after
exercise (and two years after grant) the gain will be taxed at the maximum long
term capital gains rate. The employee's gain on exercise (the excess of fair
market value at the time of exercise over the exercise price) of an ISO is a tax
preference item and, accordingly, included in the computation of alternative
minimum taxable income.

If an employee does not meet the two-year and one-year holding requirement
(a "disqualifying disposition"), but does meet all other requirements, tax will
be imposed at the time of sale of the stock, but the employee's gain realized on
exercise will be treated as ordinary income rather than capital gain and the
Company will get a corresponding tax deduction on the sale.
19

Any additional gain on sale will be short-term or long-term capital gain,
depending on the holding period of the stock (assuming the stock constitutes a
capital asset in the hands of the optionee). If the amount realized on the
disqualifying disposition is less than the value at the date of exercise, the
amount includible in gross income, and the amount deductible by the Company,
will equal the excess of the amount realized on the sale or exchange over the
exercise price.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO ADOPT THE
2007 INCENTIVE STOCK OPTION PLAN.

PROPOSAL 3. RATIFICATION OF STOCK GRANTS PREVIOUSLY ISSUED TO
EMPLOYEES AS COMPENSATION

The Company's Board of Directors has previously granted stock as
compensation to certain employees in on May 17, 2007. An aggregate of 101,000
shares were granted as compensation in lieu of cash. Officers of the Company
received 53,000 of these shares as follows:

Officers:

Other employees, as a group (15 individuals) 48,000 shares
-------
Total restricted shares awarded 101,000 shares
=======

Vote Required and Recommendation

The ratification of the stock awards previously granted to the Company's
employees as compensation requires the affirmative vote of the holders of a
majority of shares of the Company's common stock, present in person or by proxy
at the annual meeting. The Board recommends shareholders to vote "FOR" the
ratification of the stock grants previously issued to the Company"s employees as
compensation.

PROPOSAL 4. RATIFICATION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We are asking our shareholders to ratify the Audit Committee's appointment
of Berenfeld, Spritzer, Shechter & Sheer, as our independent certified public
accountants for the year ending December 31, 2007. In the event the shareholders
fail to ratify the appointment, the Audit Committee will reconsider this
appointment. Even if the appointment is ratified, the Audit Committee, in its
discretion, may direct the appointment of a different independent auditing firm
at any time during the year if the Audit Committee determines that such a change
would be in our company and our shareholders' best interests.

We engaged Berenfeld, Spritzer, Shechter & Sheer as our independent auditor
on November 21, 2006 and Berenfeld, Spritzer, Shechter & Sheer audited our
consolidated financial statements for the year ended December 31, 2006.
Representatives of Berenfeld, Spritzer, Shechter & Sheer are expected to be
present at the meeting and will have the opportunity to make a statement if they
desire to do so. It is also expected that they will be available to respond to
appropriate questions.

Principal Accountant Fees and Services

The information required for this item is incorporated by reference to our
Definitive Proxy Statement to be filed in conjunction with our upcoming annual
shareholders' meeting which shall be filed with the United States Securities and
Exchange Commission and sent out to shareholders.

Fee Category 2006 2005
------------------- -------- -------
Audit Fees $55,500 $39,000
Audit Related Fees - -
Tax Fees - -
All Other Fees - -
------- -------
Total Fees $55,500 $39,000
======= =======

Audit Fees. Consists of fees billed for professional services rendered for
the audit of the Company's consolidated financial statements and review of the
interim consolidated financial statements included in quarterly reports and
services that are normally provided by Berenfeld, Spritzer, Shechter & Sheer in
connection with statutory and regulatory filings or engagements for the year
2006 and Levi, Cahlin & Co. for the year 2005.

Audit-Related Fees. Consists of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company's consolidated financial statements and are not reported under
"Audit Fees." These services include employee benefit plan audits, accounting
consultations in connection with acquisitions, attest services that are not
required by statute or regulation, and consultations concerning financial
accounting and reporting standards.

Tax Fees. Consists of fees billed for professional services for tax
compliance, tax advice and tax planning. These services include assistance
regarding federal, state and international tax compliance, tax audit defense,
customs and duties, mergers and acquisitions, and international tax planning.

All Other Fees. Consists of fees for products and services other than the
services reported above.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Auditors

The Audit Committee's policy is to pre-approve all audit and permissible
non-audit services provided by the independent auditors. These services may
include audit services, audit-related services, tax services and other services.
Pre-approval is generally provided for up to one year and any pre-approval is
detailed as to the particular service or category of services and is generally
subject to a specific budget. The independent auditors and management are
required to periodically report to the Audit Committee regarding the extent of
services provided by the independent auditors in accordance with this
pre-approval, and the fees for the services performed to date. The Audit
Committee may also pre-approve particular services on a case-by-case basis.

Vote Required and Recommendation

The ratification of the selection of Berenfeld, Spritzer, Shechter & Sheer,
as our independent certified public accountants for the year ending December 31,
2007, requires the affirmative vote of the holders of a majority of shares of
the Company's common stock, present in person or by proxy at the annual meeting.
The Board recommends shareholders to vote "FOR" the ratification of the
selection of Berenfeld, Spritzer, Shechter & Sheer as our independent auditors
for the year ended December 31, 2007.

Previous Independent Auditors

On November 21, 2006 we dismissed Levi, Cahlin & Co. The decision to change
accountants was approved by our Audit Committee. As of November 21, 2006, we did
not have any change or disagreement with Levi, Cahlin & Co. with respect to the
preparation of our financial statements for the previous year contained in our
Annual Report for the year ended December 31,2005.
21

The report of Levi, Cahlin did not contain an adverse opinion or disclaimer
of opinion and was not qualified or modified as to uncertainty, audit scope or
accounting principles for fiscal 2005 and all subsequent interim periods.
Furthermore, Levi, Cahlin & Co. did not advise us that:

1) internal controls necessary to develop reliable financial statements did
not exist, or

2) information had come to the attention of Levi, Cahlin & Co. which made
it unwilling to rely upon management's representations or made it unwilling to
be associated with the financial statement prepared by management, or

3) the scope of the audit should be expanded significantly, or information
had come to the attention of Levi, Cahlin that they concluded will, or if
further investigated might, materially impact the fairness or reliability of a
previously issued audit report or the underlying financial statements, or the
financial statements issued or to be issued covering the fiscal periods
subsequent to December 31, 2006 (including information that may prevent it from
rendering an unqualified audit report on those financial statements) or made it
unwilling to rely on management's representations or to be associated with the
financial statements prepared by management or,

4) information has come to the attention of Levi, Cahlin & Co. that they
have concluded will, or if further investigated might, materially impact the
fairness or reliability of a previously issued audit report or the underlying
financial statements or the financial statements issued or to be issued covering
the fiscal periods subsequent to November 21, 2006, the date of the Form 8-K
filing reporting our change in accountants, that had not been resolved to the
satisfaction of Levi, Cahlin & Co or which would have prevented Levi, Cahlin &
Co from rendering an unqualified audit report on such financial statements.

During fiscal 2006, and all subsequent interim periods, there were no
disagreements with Levi, Cahlin & Co on any matters of accounting principles or
practices, financial statement disclosure or auditing scope or procedure, which,
if not resolved to the satisfaction of Levi, Cahlin & Co. would have caused it
to make reference to the subject matter of the disagreements in connection with
its reports on these financial statements for those periods.

ANNUAL REPORT ON FORM 10-K

We are mailing copies of our Annual Report for the year ended December 31,
2006 with this proxy statement to our shareholders of record as of June 15,
2007.

STOCKHOLDERS SHARING THE SAME LAST NAME AND ADDRESS

We have adopted a procedure approved by the SEC called "householding."
Under this procedure, certain stockholders of record who have the same address
and last name and don't participate in electronic delivery of proxy materials
will receive only one copy of our Annual Report, Proxy Statement and any
additional proxy soliciting materials sent to stockholders until such time as
one or more of these stockholders notifies us that they wish to continue
receiving individual copies. This procedure will reduce duplicate mailings and
save printing costs and postage fees, as well as natural resources. Stockholders
who participate in householding will continue to receive separate proxy cards.

If you received a householded mailing this year, and you would like to have
additional copies of our Annual Report and Proxy Statement mailed to you, please
submit your request to Corporate Secretary, Ocean Bio-Chem, Inc., 4041 SW 47
Avenue, Fort Lauderdale, FL 33314, or call (954) 587-6280. Upon your request, we
will promptly deliver a separate copy of our Annual Report and Proxy Statement.
You may also contact us at the address or phone number above if you received
multiple copies of the annual meeting materials and would prefer to receive a
single copy in the future. If you would like to opt out of householding for
future mailings, call 1 (954) 587-6280 or send a written request to the
Corporate Secretary at the above address, and your request will be effective
within 30 days.

INFORMATION CONCERNING SHAREHOLDER PROPOSALS

Under SEC rules, any stockholder who intends to present a proposal at our
next Annual Meeting of Stockholders must submit the proposal, in writing, so
that we receive it at our principal executive office by January 1, 2007 in order
for the proposal to be included in our Proxy Statement and proxy for such
meeting. The submission of a stockholder proposal does not guarantee that it
will be included in our Proxy Statement. We reserve the right to reject, rule
out of order or take other appropriate action with respect to any proposal that
does not comply with these and other applicable requirements.
22

OTHER MATTERS

As of the date of this Proxy Statement, we are not aware of any matter to
be presented for action at the meeting other than the matters set forth above.
If any other matter is properly brought before the meeting for action by
shareholders, proxies in the enclosed form returned to us will be voted in
accordance with the recommendation of the Board of Directors, or in the absence
of such a recommendation, in accordance with the judgment of the proxy holders.

OCEAN BIO-CHEM, INC.
4041 S. W. 47 Avenue
Fort Lauderdale, Florida 33314

Proxy for Annual Meeting of Shareholders on August 3, 2007

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned Shareholder of Ocean Bio-Chem, Inc. hereby appoints Peter
G. Dornau and Edward Anchel, and each of them as proxies of the undersigned,
with full power of substitution and revocation, to represent the undersigned and
to vote and otherwise represent all of the shares of the Common Stock of Ocean
Bio-Chem, Inc. which the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Company to be held on August 3, 2007 at 10:00 a.m., local
time, and at any adjournments thereof, with the same effect as if the
undersigned were present and voting the shares, on the following matters and in
the following manner.

1. The election of the following persons as directors of the Company to
serve until the next annual meeting of shareholders or until their successors
shall be elected and shall qualify:

Name:
Peter G. Dornau For / / Withhold Authority / /
Edward Anchel For / / Withhold Authority / /
Jeffrey Barocas For / / Withhold Authority / /
Sonia B. Beard For / / Withhold Authority / /
Gregor M. Dornau For / / Withhold Authority / /
William W. Dudman For / / Withhold Authority / /
James Kolisch For / / Withhold Authority / /
Laz L. Schneider For / / Withhold Authority / /
John B. Turner For / / Withhold Authority / /

The Board of Directors recommends a vote "FOR" Proposal 2 below.

2. The approval, adoption and ratification of the 2007 Incentive Stock
Option Plan.

For / / Against / / Abstain / /

The Board of Directors recommends a vote "FOR" Proposal 3 below.

3. The approval, adoption and ratification grants of the Company's
restricted common stock previously issued to employees as compensation.

For / / Against / / Abstain / /

The Board of Directors recommends a vote "FOR" Proposal 4 below.

4. The approval, adoption and ratification of the selection by the Board of
Directors of Berenfeld, Spritzner, Shechter & Sheer, Certified Public
Accountants, as Auditors for the Company for the year ending December 31, 2007.

For / / Against / / Abstain / /

5. To vote or otherwise represent the shares on any other business or on
other matters which should properly come before the meeting or any adjournments
thereof according to their decision or according to the decision of the majority
of them.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE. IF NO SPECIFICATION IS MADE AND THE PROXY IS RETURNED
SIGNED, THE SHARES REPRESENTED BY THIS PROXY SHALL BE VOTED "FOR" ITEMS (1),
(2),(3), AND (4) ABOVE.

Unless specifically indicated, the execution of this proxy is an
acknowledgment of the receipt of the Notice of Annual Meeting of Shareholders,
Annual Report and Proxy Statement.

Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as Attorney, as Executor, Administrator,
Trustee or Guardian, please give full title as such. If a company, please sign
in full corporate name by President or other authorized officer. If partnership,
please sign in partnership name by authorized person.

PLEASE SIGN, DATE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.

Dated 2007
-----------------------------------,

APPENDIX A
OCEAN BIO-CHEM, INC.
2007 INCENTIVE STOCK OPTION PLAN
EFFECTIVE APRIL 16, 2007

1. PURPOSE

1.1 GENERAL. Ocean Bio-Chem, Inc., a Florida corporation (the "Company"),
established this Incentive Stock Option Plan (the "Plan") to further the
Company's growth and development by providing to officers and other key
employees who are in a position to contribute materially to the prosperity of
the Company, through ownership of stock of the Company, an incentive to increase
their interest in the Company's welfare, to continue their services and to
afford a means through which the Company can attract to its service other
employees of outstanding ability.

1.2 COMPANY. For purposes of the Plan, the Company is deemed to include all
wholly owned subsidiaries of the Company.

1.3 TAX TREATMENT. The Plan is adopted with the intent that it be, and
continue to be, an "incentive stock option plan" entitling the holders of
options to the special tax treatment provided by Section 422 of the Internal
Revenue Code of 1986 (the "Code").

2. ADMINISTRATION

2.1 STOCK OPTION COMMITTEE. The Plan shall be administered by the Ocean
Bio-Chem, Inc., Stock Option Plan Committee (the "Committee") which shall be
composed of at least two Non-Employee directors of the Company. The Committee,
to be appointed by the Board of Directors, shall have full and complete power
and authority to do all things necessary and proper for the administration of
the Plan, including the power to interpret and construe its terms and provisions
and to determine, consistent with the terms of the Plan, the individuals
selected to receive options, the times when they shall receive them, the number
of shares to be subject to each option, and the option price.

2.2 RULES AND REGULATIONS. The Committee, as it may deem advisable, may
issue rules and regulations for the administration of the Plan. When so directed
by the Committee, appropriate officers of the Company shall execute and deliver
on behalf of the Company such options, agreements and other instruments as the
Committee may determine necessary to the implementation of the Plan. The
Committee may adopt and/or construe an appropriate form for any such options or
agreements and instruments, which forms shall contain such provisions or
conditions as the Committee deems necessary or advisable in carrying out the
purposes of the Plan, provided, however, that no such provision or condition
shall be inconsistent with the Plan.

2.3 DEFECTS OR OMISSIONS. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any option or
agreement in the manner and to the extent it shall deem expedient to carry it
into effect, and to meet the requirements of Section 422 of the Code, and shall
be the sole and final judge of such expediency. The Committee's determination
shall be conclusive.

3. STOCK SUBJECT TO THE PLAN

3.1 NUMBER OF SHARES. Shares of the Company's Common Stock, par value $.01
per share ("Common Stock") shall be subject to the Plan. The total number of
shares of Common Stock which may be sold pursuant to options granted under the
Plan ("Option" or "Options") shall not exceed 400,000 shares, adjusted as
provided in Section 3.2. The shares of Common Stock sold under the Plan may be
either authorized and unissued shares or issued shares reacquired by the
Company. Unless and until the Board of Directors shall determine to purchase
shares in the market for the purpose of the Plan or to use treasury shares, the
shares sold under the Plan shall be authorized and unissued shares reserved for
that purpose. In the event that any Options granted under the Plan shall
terminate or expire for any reason without having been exercised in full, the
shares of Common Stock not purchased under those Options shall be available
again for the purpose of the Plan.

3.2 ADJUSTMENTS. Notwithstanding any other provision of the Plan, in the
event of any change in any shares of the outstanding Common Stock of the Company
by reason of a stock dividend, recapitalization, merger, consolidation,
split-up, stock split, reverse stock split, combination or exchange of shares,
or action of like nature, the aggregate number and class of shares as to which
Options may be granted to any individual, the number and class of shares subject
to each outstanding Option and the Option prices shall be appropriately adjusted
in proportion to such increases or decreases by the Committee, whose
determination shall be conclusive.

3.3 REVERSION OF SHARES TO THE SHARE RESERVE. If any Stock Award shall for
any reason expire or otherwise terminate, in whole or in part, without having
been exercised in full, the shares of Common Stock not acquired under such Stock
Award shall revert to and again become available for issuance under the Plan.

4. ELIGIBILITY AND PARTICIPATION

4.1 INCENTIVE STOCK OPTION $100,000 LIMITATION. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any Option holder during any calendar year (under all plans of the Company
and its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options
or portions thereof which exceed such limit (according to the order in which
they were granted) shall be treated as Nonstatutory Stock Options.

4.2 OFFICERS AND CERTAIN EMPLOYEES. Options may be granted only to
full-time salaried officers and key employees of the Company or any of its
subsidiaries. Directors of the Company who are not also full-time salaried
officers or employees of the Company will not be eligible to receive Options.

4.3 TEN PERCENT SHAREHOLDER LIMITATION. If an Option is to be granted to an
individual who, at the time the Option is granted, owns Common Stock possessing
more than 10 percent (10%) of the total combined voting power of all classes of
stock of the Company or of its parent or subsidiary (as determined under Section
425(d) of the Code), the purchase price of the Common Stock under each Option
("Option Price") set out in the applicable portion of Article 5 hereof shall
read "but shall be at least 110 percent of its Fair Market Value" and the period
of exercise set out in the applicable portion of Article 6 hereof shall read
"and ending not more than five (5) years after the date on which the option is
granted".

5. PRICE

5.1 DETERMINATION. The Option Price shall be determined by the Committee,
but shall not be less than 100 percent of its fair market value (as determined
by Section 422 of the Code) ("Fair Market Value") at the time of granting of the
Option, as determined in good faith by the Committee.

5.2 PAYMENT. Upon exercise of the Option, the Option Price shall be paid in
full with cash or with stock of the Company or with demand promissory notes
bearing the rate of interest required by the Code, as amended from time to time,
at the option of the Employee.

5.3 USE OF PROCEEDS. The proceeds from the issuance of Common Stock subject
to Options are to be added to the funds of the Company available for its general
corporate purposes.

6. EXERCISE OF OPTION

6.1 PERIOD OF EXERCISE. Each Option granted under the Plan shall be
exercisable only during such period as the Committee may determine, beginning
not less than one (1) year and ending not more than ten (10) years after the
date on which the Option is granted ("Expiration Date"), except as such period
may be modified under the provisions or Sections 8.1 and 9.1 hereof. Within such
limits each Option shall provide, as determined by the Committee, the time or
times at which and the number of shares for which it may be exercised. Unless
otherwise provided in the Committee's action, each Option shall be exercisable
in whole at any time, or in part from time to time, during the term of the
Option. The holder of an Option shall have no rights as a shareholder with
respect to shares subject to the Option until such shares shall have been issued
to him upon exercise of the Option. An Option may be exercised during the
lifetime of the holder thereof only by such holder, and, after the holder's
death, as provided in Sections 9.1 and 9.2 hereof.

6.2 CHANGE OF CONTROL. Provided however, in the event of a change in
control of Company, each Option granted under this Plan shall be fully
exercisable.

6.3 SALE. An individual who has acquired Common Stock upon exercise of an
Option may not sell, transfer or otherwise dispose of the Common Stock so
acquired within two years from the date of the granting of the Option nor within
one year after the transfer of the shares to the individual.

6.4 VESTING GENERALLY. The total number of shares of Common Stock subject
to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this Section 6(g) are subject to any Option provisions governing
the minimum number of shares of Common Stock as to which an Option may be
exercised.

7. NON-TRANSFERABILITY OF OPTIONS

7.1 GENERAL. No Option granted under the Plan shall be transferable
otherwise than by will or the laws of descent and distribution.

8. TERMINATION OF EMPLOYMENT

8.1 GENERAL. If employment of the holder of an Option is terminated for any
reason, other than by death or disability, the holder's Option may be exercised
only within three months from the date of such termination of employment, but in
no event after the Expiration Date of the Option; provided, however, that if the
holder is dismissed for cause, as to which the Committee shall be sole and
exclusive judge, the Option shall expire immediately.

9. DEATH AND DISABILITY

9.1 DEATH WHILE EMPLOYED. If the holder of an Option dies while employed by
the Company, the Option may be exercised by the personal representative of the
Option holder, for a period of six (6) months from the date of death, but in no
event after the Expiration Date of the Option.

9.2 DEATH AFTER TERMINATION. If the holder of an Option dies within three
months after termination of employment other than for cause, the Option may be
exercised by the personal representative of the Option holder for a period of
six (6) months from the date the Option holder's employment was terminated, but
in no event after the Expiration Date of the Option.

9.3 DISABILITY. If the holder of an Option becomes disabled within the
meaning of Section 22(e)(3) of the Code, the Option may be exercised by the
Option holder within one year after his becoming disabled, but in no event after
the Expiration Date of the Option.

10. AMENDMENT AND TERMINATION

10.1 TERM. Unless the Plan has been terminated as hereinafter provided, the
Plan shall terminate on October 21, 2012, and no Option under it shall be
granted thereafter. The Board of Directors of the Company at any time prior to
that date may terminate the Plan.

10.2 AMENDMENT. The Board of Directors may also amend the Plan by making
such changes and additions to it as the Board shall deem advisable; provided,
however, that except as provided in Section 3.2 hereof, the Board of Directors
may not, without further approval by the Shareholders of the Company, increase
the maximum number of shares as to which Options may be granted or exercised;
and provided further, that any such change or addition does not affect the
Plan's status under Section 422 of the Code. No termination or amendment of the
Plan may, without the consent of the holder of an Option then existing,
terminate his Option or materially and adversely affect his rights under the
Option.

11. EFFECTIVE DATE

11.1 SHAREHOLDER APPROVAL. The Plan shall become effective upon adoption by
the Board of Directors of the Company, provided that it shall be approved by the
vote of the holders of a majority of the shares of Common Stock of the Company
outstanding and entitled to vote at a meeting of shareholders held within twelve
(12) months after the Plan is adopted by the Board of Directors.

12. TIME OF GRANTING OF OPTIONS

12.1 FORMAL GRANTING. Nothing contained in the Plan or in any resolution
adopted or to be adopted by the Board of Directors or the shareholders of the
Company shall constitute the granting of an Option hereunder. The granting of an
Option pursuant to the Plan and the acquisition of any rights as an Option
holder shall take place only when the Committee authorizes the issuance of an
Option, and a formal written and executed Option agreement is executed by the
holder of the Option.

12.2 TEN YEAR LIMIT. Subject to the provisions of Article 10, Options may
be granted under the Plan within ten (10) years from the date the Plan is
adopted by the Board of Directors of the Company or the date the Plan is
approved by the Shareholders, whichever is earlier.

13. MISCELLANEOUS PROVISIONS

13.1 OPTION DATE. An Option shall have been deemed to have been granted on
the date fixed in the resolution of the Committee authorizing the granting of
such Option, provided such date shall not be prior to the date of the adoption
of such resolution. If no date is fixed by such resolution, the Option shall be
deemed to have been granted on the date of adoption of the resolution, provided
that the agreement relating to the Option shall be executed and delivered within
thirty (30) days therefrom; otherwise the Option shall be deemed to have been
granted on the date of delivery of such agreement to the optionee.

13.2 INDEMNIFICATION OF COMMITTEE. Without limiting any other rights of
indemnification, the members of the Committee shall be indemnified by the
Company against the reasonable expenses (including attorney's fees, judgments,
fines, and amounts paid in settlement) actually incurred as a result of any
action, suit or proceeding, or any appeal therein ("Claim"), to which they or
any of them may be a party by reason of any action taken or failure to act under
or in connection with the Plan, and against all amounts paid by them in
settlement of such Claim, to the full extent permissible under Florida Law;
provided that within sixty (60) days after institution of any such Claim, the
Committee member involved offers the Company in writing the opportunity, at its
Own expense, to handle and defend the same.

13.3 JURISDICTION AND VENUE. This Agreement shall be governed by the laws
of the state of Florida and any litigation with respect to this Agreement shall
be in the state or Federal courts situated in Broward County, Florida