Edgar Filing: AMERICAN BILTRITE INC

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
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14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12

American Biltrite Inc.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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AMERICAN BILTRITE INC.

57 River Street
Wellesley Hills, Massachusetts 02481

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
MAY 10, 2004

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TO THE STOCKHOLDERS OF AMERICAN BILTRITE INC.:

Notice is hereby given that the Annual Meeting of the Stockholders of
American Biltrite Inc. will be held at the FleetBoston Financial Corporation,
America Room, 2nd Floor, 100 Federal Street, Boston, Massachusetts, on Monday
May 10, 2004 at 10:00 A.M. local time, for the following purposes:

1. To elect three directors who will hold office until the Annual
Meeting of Stockholders in 2007 and until their successors are
duly elected and qualified.

2. To transact any other business that may properly come before the
meeting or any adjournment thereof.

The close of business on March 19, 2004 has been fixed as the record
date for determining the stockholders entitled to notice of, and to vote at, the
Annual Meeting and any adjournment thereof.

A copy of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2003 is enclosed with this proxy statement.

It is desirable that the stock of the Company should be represented as
fully as possible at the Annual Meeting. Please sign, date and return the
accompanying proxy card in the enclosed envelope, which requires no postage if
mailed in the United States. If you should attend the Annual Meeting, you may
vote in person, if you wish, whether or not you have sent in your proxy, and
your vote at the meeting will revoke any prior proxy you may have submitted.

By Order of The Board of Directors
AMERICAN BILTRITE INC.

Henry W. Winkleman
Secretary

Wellesley Hills, Massachusetts
April 15, 2004

PROXY STATEMENT

This proxy statement is furnished in connection with the solicitation,
by and on behalf of the Board of Directors (the "Board") of American Biltrite
Inc. (the "Company" or "ABI"), of proxies to be used in voting at the Annual
Meeting of Stockholders (the "Meeting") to be held on May 10, 2004 at the
FleetBoston Financial Corporation, America Room, 2nd Floor, 100 Federal Street,
Boston, Massachusetts at 10:00 A.M. local time, and at any adjournments thereof.
The principal executive offices of the Company are located at 57 River Street,
Wellesley Hills, Mas-sachusetts 02481. The cost of preparing and mailing the
notice, proxy statement and proxy card will be paid by the Company. It is
expected that the solicitation of proxies will be by the Company by mail only,
but may also be made by overnight delivery service, facsimile, personal
interview or telephone by directors, officers or employees of the Company. The
Company will request banks and brokers holding stock in their names or custody,
or in the names of nominees for others, to forward copies of the proxy material
to those persons for whom they hold such stock and, upon request, will reimburse
such banks and brokers for their out-of-pocket expenses incurred in connection
therewith. This proxy statement and the accompanying proxy card were first
mailed to stockholders on or about April 15, 2004.

Proxies in the accompanying form, properly executed, duly returned to
the Company and not validly revoked, will be voted at the Meeting (including
adjournments) in accordance with your instructions.

Any stockholder giving a proxy in the accompanying form retains the
power to revoke it at any time prior to the exercise of the powers conferred
thereby by filing a later dated proxy, by notice of revocation filed in writing
with the Secretary of the Company or by voting the shares subject to such proxy
in person at the Meeting.Attendance at the Meeting in person will not be deemed
to revoke the proxy unless the stockholder affirmatively indicates at the
Meeting an intention to vote the shares in person.

On March 19, 2004, there were issued and outstanding 3,441,551 shares of
the Company's Common Stock, par value $.01 per share (the "Common Stock"). Only
stockholders of record at the close of business on that date are entitled to
notice of and to vote at the Meeting or any adjournment thereof, and those
entitled to vote will have one vote for each share held.

A quorum for the consideration of any question at the Meeting will
consist of a majority in interest of all stock issued and outstanding and
entitled to vote upon that question. A plurality of the shares represented and
voting at the Meeting at which a quorum is present is required to elect
directors. On all other matters, a majority of the shares represented and voting
at the meeting is required to decide the question. Shares represented by proxies
marked "WITHHELD" with regard to the election of directors will be counted for
purposes of determining whether there is a quorum at the Meeting, but will not
be voted in the election of directors, and, therefore, will have no effect on
the determination of the outcome of the votes for the election of directors.

A "broker non-vote" occurs with respect to shares as to a proposal when
a broker who holds shares of record in its name is not permitted to vote on that
proposal without instruction from the beneficial owner of the shares and no
instruction is given. A broker holding your shares in its name will be permitted
to vote such shares with respect to the proposal to elect three directors to be
voted on at the Meeting without instruction from you, and, accordingly, broker
non-votes will not occur with respect to this proposal.

DELIVERY OF PROXY MATERIAL AND ANNUAL REPORTS TO HOUSEHOLDS

The Securities and Exchange Commission has implemented a rule permitting
companies and brokers, banks or other intermediaries to deliver a single copy of
an annual report and proxy statement to households at which two or more
beneficial owners reside. This method of delivery, which eliminates duplicate
mailings, is referred to as "householding." Beneficial owners sharing an address
who have been previously notified by their broker, bank or other intermediary
and have consented to householding, either affirmatively or implicitly by not
objecting to householding, will receive only one copy of the Company's Annual
Report on Form 10-K for the year ended December 31, 2003 and this proxy
statement.

If you hold your shares in your own name as a holder of record,
householding will not apply to your shares.

Beneficial owners who reside at a shared address at which a single copy of the
Company's Annual Report on Form 10-K for the year ended December 31, 2003 and
this proxy statement is delivered may obtain a separate Annual Report on Form
10-K for the year ended December 31, 2003 and/or proxy statement without charge
by sending a written request to: American Biltrite Inc., 57 River Street,
Wellesley Hills, Massachusetts 02481, attention Henry W. Winkleman, or by
calling the company at 781-237-6655. The Company will promptly deliver an Annual
Report on Form 10-K for the year ended December 31, 2003 and/or proxy statement
upon request.

Not all brokers, banks or other intermediaries may offer the opportunity
to permit beneficial owners to participate in householding. If you want to
participate in householding and eliminate duplicate mailings in the future, you
must contact your broker, bank or other intermediary directly. Alternatively, if
you want to revoke your consent to householding and receive separate annual
reports and proxy statements for each beneficial owner sharing your address, you
must contact your broker, bank or other intermediary to revoke your consent to
householding.

ELECTION OF DIRECTORS

The Board is divided into three classes, the terms of which expire at
successive Annual Meetings of Stockholders. Stockholders are being asked to
elect three Class II directors at the Meeting. The accompanying proxy will be
voted for the election of the nominees named in Class II below unless otherwise
instructed. The term of those Class II directors elected at the Meeting will
expire at the Annual Meeting of Stockholders held in 2007 upon the election and
qualification of their successors. Should any person named below be unable or
unwilling to serve as a director, persons named as proxies intend to vote for
such other person as management may recommend. Each nominee is currently a
director of the Company.

The following table sets forth the name, age and principal occupation of
each of the nominees for election as director and each current director in the
classes continuing in office, together with a statement as to the period during
which he or she has served as a director of the Company.

BUSINESS EXPERIENCE AND EXPIRATION OF
NAME (AGE) OTHER DIRECTORSHIPS PRESENT TERM
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NOMINEES
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CLASS II

John C. Garrels III (64) Former Director, Global Banking, The First 2004
National Bank of Boston, a national banking
association. Director of the Company since 1977.

James S. Marcus (74) Former Limited Partner, Goldman, Sachs & Co., 2004
investment bankers. Director of the Company since
1971. Director of Insight Communications
Company, Inc.

Roger S. Marcus (58) Chairman of the Board and Chief Executive Officer 2004
of the Company. Director of the Company since
1981. Chairman of the Board of Directors and Chief
Executive Officer of Congoleum Corporation, a
resilient flooring manufacturer and a majority
owned subsidiary of the Company.

BUSINESS EXPERIENCE AND EXPIRATION OF
NAME (AGE) OTHER DIRECTORSHIPS PRESENT TERM
---------- ----------------------- ------------

INCUMBENT DIRECTORS
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CLASS III

Mark N. Kaplan, Esq. (74) Of Counsel, Skadden, Arps, Slate, Meagher & Flom 2005
LLP, attorneys. Director of the Company since
1982. Director of: Grey Advertising Inc.; DRS
Technologies Inc.; Autobytel Inc.; REFAC
Corporation; Volt Information Sciences, Inc.; and
Congoleum Corporation.

Natalie S. Marcus (87) Investor. Director of the Company since 1992. 2005

William M. Marcus (66) Executive Vice President and Treasurer of the 2005
Company. Director of the Company since 1966.
Director of Congoleum Corporation.

Kenneth I. Watchmaker (61) Executive Vice President and Chief Financial 2005
Officer of Reebok International Ltd., a worldwide
designer, marketer and distributor of sports, fitness
and casual footwear, apparel and equipment.
Director of the Company since 1995.

CLASS I

Gilbert K. Gailius (72) Former Vice President-Finance and Chief Financial 2006
Officer of the Company. Director of the Company
since 1983.

Richard G. Marcus (56) President and Chief Operating Officer of the 2006
Company. Director of the Company since 1982.
Vice Chairman of the Board of Directors of
Congoleum Corporation.

Frederick H. Joseph (67) Managing Director, Morgan Joseph & Co. 2006
investment bankers from 2001 to 2003. Managing
Director, ING Barings LLC, investment bankers,
from 1998 to 2001. From 1994 to 1998 was
Chairman of Clovebrook Capital Corp., investment
banking consultants. Director of the Company since
1997 Director of: Watsco Inc.

Note: Natalie S. Marcus is the mother of Roger S. Marcus and Richard G. Marcus
and the aunt of William M. Marcus. James S. Marcus is not related to
Natalie, Roger, Richard or William Marcus.

Individuals who together beneficially own 56.8% of the outstanding
Common Stock have identified themselves as persons who have in the past taken,
and may in the future take, actions which direct or cause the direction of the
management of the Company, and their voting of shares of Common Stock, in a
manner consistent with each other. Accordingly, these individuals may be deemed
to constitute a "group" within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, and Rule 13d-5 under that act. In light of the
existence of this "group," the Company is a "controlled company," as that term
is defined in Section 801 of the American Stock Exchange ("AMEX") Company Guide.
As a result of the Company's status as a "controlled company," it may avail
itself of exceptions to the AMEX's corporate governance standards that generally
require a company whose stock is listed for trading on the AMEX to have a
majority of its board of directors consist of independent directors, to have
director nominations selected or recommended for the board's selection by either
a nominating committee

comprised of independent directors or by a majority of the independent directors
and to have officer compensation determined or recommended to the board for
determination either by a compensation committee comprised of independent
directors or by a majority of the independent directors. Pursuant to the AMEX's
independence standards, the Company's Board of Directors has determined that the
following five of its 10 directors are independent: John Garrels III, Frederick
Joseph, Mark Kaplan, James Marcus and Kenneth Watchmaker.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR ELECTION OF
EACH OF THE NOMINEES FOR CLASS II DIRECTOR.

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.

EXECUTIVE OFFICERS

The following table sets forth certain information relating to the
executive officers of the Company.

EXECUTIVE OFFICER
EXECUTIVE OFFICER (AGE) POSITION SINCE
----------------------- ------------------ -----------------

Roger S. Marcus (58) Chief Executive Officer 1981

Richard G. Marcus (56) President and Chief Operating Officer 1982

William M. Marcus (66) Executive Vice President and Treasurer 1966

Howard N. Feist III (47) Vice President-Finance and 2000
Chief Financial Officer of the Company.
Chief Financial Officer and Secretary of
Congoleum Corporation since 1988.

J. Dennis Burns (64) Vice President and General Manager, 1985
Tape Products Division

Jean Richard (59) Vice President and General Manager 2000
American Biltrite (Canada) Ltd.
President and Chief Operating Officer of
Group Bocenor, Inc., a window and door
manufacturer, from 1994 to 1999.

Edward J. Lapointe (61) Controller 1983

Henry W. Winkleman (59) Vice President, Corporate Counsel, and Secretary 1989

CERTAIN BENEFICIAL OWNERS OF COMMON STOCK

The following table, together with the accompanying text and footnotes,
sets forth, as of March 19, 2004, (a) the holdings of the Common Stock of each
director of the Company and of each person nominated to become a director of the
Company, (b) the holdings of the Common Stock of each person named in the
Summary Compensation Table that appears later in this proxy statement and of all
executive officers and directors as a group and (c) the names, addresses and
holdings of the Common Stock of each person, who to the Company's knowledge,
beneficially owns 5% or more of the Common Stock.

AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER(1) OWNERSHIP(2) COMMON STOCK
---------------------- ------------ ------------

DIRECTORS AND EXECUTIVE OFFICERS

Natalie S. Marcus ...................................................... 958,908(3)(4) 27.8%
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, MA 02481

Richard G. Marcus ...................................................... 507,083(3)(5) 14.5
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, MA 02481

Roger S. Marcus ........................................................ 504,482(3)(6) 14.5
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, MA 02481

William M. Marcus ...................................................... 345,734(3)(7) 9.9
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, MA 02481

J. Dennis Burns ........................................................ 9,104(8) *
Mark N. Kaplan ......................................................... 5,000(9) *
Gilbert K. Gailius ..................................................... 13,000(10) *
John C. Garrels III .................................................... 3,800(10) *
Howard N. Feist III .................................................... 8,000(11) *
Kenneth I. Watchmaker .................................................. 3,000(10) *
James S. Marcus ........................................................ 3,200(10) *
Frederick H. Joseph .................................................... 3,200(12) *
All directors and executive officers ................................... 2,091,311(13) 57.6
as a group (15 persons)

5% BENEFICIAL OWNERS, OTHER THAN PERSONS INCLUDED ABOVE

Dimensional Fund Advisors, Inc. ........................................ 201,650(14) 5.9
1299 Ocean Avenue, Suite 650
Santa Monica, CA 90491

Wilen Management Company, Inc. ......................................... 211,252(15) 6.1
2360 West Joppe Road, Suite 226
Lutherville, MD 21093

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* Represents beneficial ownership of less than 1% of Common Stock.

(1) Addresses are given only for beneficial owners of more than 5% of the
Common Stock.

(2) Unless otherwise noted, the nature of beneficial ownership is sole
voting and/or investment power.

(3) As of the date shown, these shares were among the 2,037,607 shares, or
56.8%, of the outstanding Common Stock beneficially owned by the
following persons, who have identified themselves as persons who have
taken, and reasonably anticipate continuing to take, actions which
direct or may cause the direction of the management and policies of the
Company and the voting of their shares of Common Stock in a manner
consistent with each other, and who therefore may be deemed to
constitute a "group" within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"):
Natalie S. Marcus, Richard G. Marcus, Roger S. Marcus, William M. Marcus
and Cynthia S. Marcus (c/oAmerican Biltrite Inc., 57 River Street,
Wellesley Hills, MA 02481). The Company owns 4,395,605 shares of the
Class B Common Stock of Congoleum Corporation ("Congoleum") and 151,100
shares of the Class A Common Stock of Congoleum. These shares on a
combined basis represent 69.5% of the voting power of the outstanding
capital stock of Congoleum. Each of the named individuals may be deemed
a beneficial owner of these shares.

(4) Natalie S. Marcus has sole voting and investment power over 807,908
shares. Mrs. Marcus is also a co-trustee with Richard G. Marcus and
Roger S. Marcus over 144,000 shares and trustee of a charitable trust,
which holds 4,000 shares. Mrs. Marcus also has the right to acquire
3,000 shares, which are issuable upon exercise of options currently
exercisable within 60 days of the date of this proxy statement.

(5) Richard G. Marcus has sole voting and investment power over 313,083
shares. Mr. Marcus is also a co-trustee with Natalie S. Marcus and Roger
S. Marcus over 144,000 shares. Mr. Marcus also has the right to acquire
50,000 shares, which are issuable upon exercise of options exercisable
within 60 days of the date of this proxy statement. Richard G. Marcus's
wife, Beth A. Marcus, owns 6,196 shares, of which shares Mr. Marcus
disclaims beneficial ownership. Mr. Marcus also has the right to acquire
40,000 shares of common stock of Congoleum, which are issuable upon
exercise of options exercisable within 60 days of the date of this proxy
statement.

(6) Roger S. Marcus has sole voting and investment power over 310,482
shares. Mr. Marcus is also a co-trustee with Natalie S. Marcus and
Richard G. Marcus over 144,000 shares. Mr. Marcus also has the right to
acquire 50,000 shares, which are issuable upon exercise of options
exercisable within 60 days of the date of this proxy statement. Roger S.
Marcus's daughter, Elissa G. Marcus, owns 9,096 shares, of which shares
Mr. Marcus disclaims beneficial ownership. Mr. Marcus also has the right
to acquire 40,000 shares of common stock of Congoleum which are issuable
upon exercise of options exercisable within 60 days of the date of this
proxy statement.

(7) William M. Marcus has sole voting and investment power over 305,734
shares. Mr. Marcus also has the right to acquire 40,000 shares, which
are issuable upon exercise of options exercisable within 60 days of the
date of this proxy statement. William M. Marcus's wife, Cynthia S.
Marcus, owns 9,400 shares, of which shares Mr. Marcus disclaims
beneficial ownership. Mr. Marcus also has the right to acquire 1,000
shares of common stock of Congoleum which are issuable upon exercise of
options exercisable within 60 days of the date of this proxy statement.

(8) J. Dennis Burns has sole voting and investment power over 3,104 shares.
Mr. Burns has the right to acquire 6,000 shares, which are issuable upon
exercise of options exercisable within 60 days of the date of this proxy
statement. Mr. Burns's wife, Kristin J. Burns, owns 100 shares of Class
A Common Stock of Congoleum, which shares represent less than 1% of the
voting power of the outstanding capital stock of Congoleum, of which
shares Mr. Burns disclaims beneficial ownership.

(9) Mark N. Kaplan has sole voting and investment power over 2,000 shares.
Mark N. Kaplan has the right to acquire 3,000 shares which are issuable
upon exercise of options exercisable within 60 days of the date of this
proxy statement. Mr. Kaplan also owns 16,000 shares of Class A Common
Stock of Congoleum, and has the right to acquire 3,000 shares of
Congoleum which are issuable upon exercise of options exercisable within
60 days of the date of this proxy statement which shares represent less
than 1% of the voting power of the outstanding capital stock of
Congoleum.

(10) Messrs. John C. Garrels III, James S. Marcus and Gilbert K. Gailius have
sole voting and investment power over 800, 200 and 12,000 shares
respectively. Messrs. John C. Garrels III, James S. Marcus and Kenneth
I. Watchmaker each have the right to acquire 3,000 shares, which are
issuable upon exercise of options exercisable within 60 days of the date
of this proxy statement. Mr. Gilbert K. Gailius has the right to acquire
1,000 shares which are issuable upon exercise of options exercisable
within 60 days of the date of this proxy statement.

(11) Howard N. Feist III has the right to acquire 8,000 shares which are
issuable upon exercise of options exercisable within 60 days of the date
of this proxy statement. Mr. Feist also owns 1,000 shares, and is
trustee for a custodial account which holds 1,177 shares, of Class A
Common Stock of Congoleum, which shares represent less than 1% of the
voting power of the outstanding capital stock of Congoleum. Mr. Feist
also has the right to acquire 3,000 shares of common stock of Congoleum
which are issuable upon exercise of options exercisable within 60 days
of the date of this proxy statement.

(12) Frederick H. Joseph has the right to acquire 3,000 shares which are
issuable upon exercise of options exercisable within 60 days of this
proxy statement. Mr. Joseph also owns 8,000 shares of Class A Common
Stock of Congoleum, which shares represent less than 1% of the voting
power of the outstanding capital stock of Congoleum.

(13) All directors and executive officers as a group may be considered
beneficial owners of 261,777 shares of Class A Common Stock of Congoleum
and 4,395,605 shares of Class B Common Stock of Congoleum, which
combined represent 69.9% of the voting power of the outstanding capital
stock of Congoleum.

(14) Based on information contained in a Schedule 13G filed with the
Securities and Exchange Commission on February 6, 2004.

(15) Based on information contained in a Schedule 13G filed with the
Securities and Exchange Commission on January 28, 2004.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act, requires the Company's directors,
executive officers and holders of more than 10% of the Common Stock and other
equity securities of the Company to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
the Common Stock and other equity securities of the Company. The Company
believes that during the year ended December 31, 2003, its officers, directors
and holders of more than 10% of the Company's Common Stock complied with all
Section 16(a) filing requirements.

DIRECTOR COMPENSATION AND COMMITTEES

During 2003, the Board held nine meetings. Each director who was not an
officer and employee of the Company received a director's fee of $15,000 per
year and $2,000 for each of the four regular Board meetings attended and each
member of the Audit Committee received $3,000 for each Audit Committee meeting
attended during 2003. The Directors do not receive a fee for telephonic
meetings. Each director attended at least 75% of the aggregate of the total
number of meetings of the Board of Directors and 75% of the total number of
meetings of the committees of the Board on which each Director serves in 2003.

Directors may elect to defer the receipt of all or a part of their fees.
Amounts so deferred earn interest, compounded quarterly, at a rate equal to the
base rate quoted by the FleetBoston Financial at the end of each quarter.

Directors are also eligible to have their contributions to qualified
charitable organizations matched by the company in an aggregate amount up to
$5,000 per director per year.

The Company's Compensation Committee consists of three members. The
Compensation Committee met once during 2003. The members of the Compensation
Committee are Messrs. Mark N. Kaplan, Chairman, John C. Garrells III and
Kenneth I. Watchmaker. The Compensation Committee is responsible for the review
and establishment of executive compensation including base salaries, bonuses and
criteria for their award, personnel policies, particularly as they relate to
fringe benefits, savings and investment, pension and retirement plans and other
benefits.

The Company has an Audit Committee composed of independent directors as
defined in AMEX's listing standards. Information regarding the functions
performed by the Audit Committee, its membership, and the number of meetings
held during the fiscal year, is set forth in the Audit Committee Report included
in this annual proxy statement. The Board of Directors has determined that
Company has at least one audit committee financial expert serving on its audit
committee. The audit committee financial expert is Kenneth I. Watchmaker who is
an independent director as defined in AMEX's listing standards. The written
charter adopted by the Board that governs the Audit Committee is included in
this annual proxy as Appendix A.

The Company does not have a standing nominating committee or formal
procedure for nomination of directors. The Board of Directors believes that this
is appropriate in light of the Company's ownership structure, which includes

individuals who together beneficially own 56.8% of the outstanding Common Stock
and who have identified themselves as persons who have in the past taken, and in
the future may take, actions which direct or cause the direction of the
management of the Company, and their voting of shares of Common Stock, in a
manner consistent with each other. Accordingly, these individuals may be deemed
to constitute a "group" within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, and Rule 13d under that act. In light of the
existence of this "group," the Company is a "controlled company," as that term
is defined in Section 801 of the AMEX Company Guide. Pursuant to the AMEX's
corporate governance rules, a "controlled company" may avail itself of an
exception to the AMEX rule that generally requires a company whose stock is
listed for trading on the AMEX to have director nominations selected or
recommended for the board's selection by either a nominating committee comprised
of independent directors or by a majority of the independent directors.All
members of the Board of Directors participate in the consideration of director
nominees. The Board does not have a policy with regard to the consideration of
any director candidates recommended by security holders. The Board of Directors
believes that a policy is not necessary because the directors have access to a
sufficient number of excellent candidates from which to select a nominee when a
vacancy occurs on the Board and because the Board includes the controlling
shareholders of the Company. Individual directors will generally recommend
candidates to the controlling shareholders and, if acceptable, will submit that
person's name for consideration by the Board. The Board generally seeks
candidates with a broad business background and who may also have a specific
expertise in such areas as law, accounting, banking, or investment banking.

All members of the Board of Directors are encouraged, but not required, to
attend the Company's annual meeting of stockholders. All members of the Board of
Directors attended the annual meeting held in 2003.

AUDIT COMMITTEE REPORT

The Audit Committee oversees the Company's financial reporting process
on behalf of the Board. Management has the primary responsibility for the
financial statements and the reporting process including the systems of internal
controls. In fulfilling its oversight responsibilities, the Audit Committee
reviewed the audited financial statements in the Company's Annual Report on Form
10-K for the year ended December 31, 2003 with management and the independent
auditors, including a discussion of the quality, not just the acceptability, of
the accounting principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.

The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with theAudit Committee under generally accepted auditing standards. In
addition, theAudit Committee discussed with the independent auditors the
auditors' independence from management and the Company including the matters
required to be discussed by Statement on Auditing Standards No. 61, has received
and reviewed written disclosures and the letter from the independent auditors
required by Independence Standards Board Standard No. 1 and considered the
compatibility of nonaudit services with the auditors' independence.

The Audit Committee discussed with the Company's internal and
independent auditors the overall scope and plans for their respective audits.
The Audit Committee met quarterly with the internal and independent auditors,
with and without management present, to discuss the results of their
examinations, their evaluations of the Company's internal controls, and the
overall quality of the Company's financial reporting. The Audit Committee held
four meetings during fiscal year 2003.

In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board (and the Board has approved) that the audited
financial statements be included in the Company's Annual Report on Form 10-K for
the year ended December 31, 2003 for filing with the Securities and Exchange
Commission. The Audit Committee has also appointed Ernst & Young as the
Company's independent auditors for 2004.

AUDIT COMMITTEE

Kenneth I. Watchmaker, Chairman
John C. Garrels III
James S. Marcus

COMPENSATION COMMITTEE REPORT

OVERALL POLICY

The Company's executive compensation program is designed to reflect both
corporate performance and individual responsibilities and performance. The
Compensation Committee administers the Company's executive compensation strategy
in an attempt to relate executive compensation appropriately to the Company's
overall growth and success and to the executive's duties, demonstrated abilities
and, where appropriate, the performance of the operating division or subsidiary
for which the executive is responsible. The objectives of the Company's
compensation strategy are to attract and retain the best possible executives, to
motivate those executives to achieve the Company's business goals and to provide
a compensation package that recognizes individual contributions as well as
overall business results.

Each year, the Compensation Committee conducts a review of the Company's
executive compensation. This review includes consideration of: the relationship
between an executive's current compensation and their current duties and
responsibilities; the compensation of executive officers with similar duties and
responsibilities; and inflationary trends. The annual compensation review
permits an ongoing evaluation of the relationships among the size and scope of
the Company's operations, the Company's performance and its executive
compensation. The Compensation Committee also considers the legal and tax
effects (including without limitation the effects of Section 162(m) of the
Internal Revenue Code of 1986, as amended) of the Company's executive
compensation program in order to provide the most favorable legal and tax
consequences for the Company.

The Compensation Committee determines the compensation of the
individuals whose compensation is detailed in this proxy statement (including in
the Summary Compensation Table) and sets policies for and reviews the
compensation awarded to the Company's most highly compensated corporate
executives. This process is designed to provide consistency throughout the
executive compensation program. In reviewing the individual performance of the
executives whose compensation is described in this proxy statement (other than
Roger S. Marcus, the Company's Chief Executive Officer), the Compensation
Committee takes into account the views of Roger S. Marcus.

The material elements of the Company's executive compensation consist of
base salary, annual bonus and stock options. In 1996, the Compensation Committee
established certain additional elements to the Company's executive compensation
program, including principally split-dollar insurance arrangements. The
Compensation Committee's policies with respect to each of these elements,
including the bases for the compensation awarded to Roger S. Marcus, are
discussed below. In addition, although the elements of compensation described
below are considered separately, the Compensation Committee takes into account
the full compensation package afforded by the Company (including its
subsidiaries) to the individual, including pension benefits, insurance and other
benefits, as well as the specific elements of the program described below.

BASE SALARIES

Base salaries for executive officers are determined by considering
historical salaries paid by the Company to officers having certain duties and
responsibilities and then evaluating the current responsibilities of the
position, the scope of the operations under management and the experience of the
individual. Annual salary adjustments are determined by evaluating on an
individual basis (i) new responsibilities of the executive's position, (ii)
changes in the scope of the operations managed, (iii) the performance both of
such operations and of the executive in the position and (iv) annual increases
in the cost of living.

With respect to the base salary of Roger S. Marcus in 2003, the
Compensation Committee took into account the Company's performance (and the
performance of Congoleum Corporation, a majority-owned subsidiary of the
Company) and the assessment by the Compensation Committee of Mr. Marcus's
individual performance as Chief Executive Officer of both the Company and
Congoleum Corporation. The Compensation Committee also took into account the
length of Mr. Marcus's service to the Company and his increasing
responsibilities in the course of such service.

ANNUAL BONUS

The Company's executive officers are eligible for an annual cash bonus.
Annual bonuses are determined on the basis of individual and corporate
performance. The most significant corporate performance measure for bonus
payments is earnings of the Company as a whole and then the relevant divisions
or subsidiaries, where appropriate. The Compensation Committee has adopted a
policy of paying bonuses to each of Roger S. Marcus and Richard G. Marcus of
approximately 3-4% of the Company's after-tax earnings, taking into account
significant exceptional or non-operational occurrences and the actual level of
profitability for the relevant year. In determining annual bonuses, the
Committee also considers the views of Roger S. Marcus as Chief Executive Officer
and discusses with him the appropriate bonuses for all executives, including
himself.

Roger S. Marcus was not awarded a bonus for 2003. For 2002, he was
awarded a bonus of $150,000. A portion of Mr. Marcus's 2002 bonus was based on
earnings for the Company as a whole in accordance with the Compensation
Committee policy set forth above. Consideration was also given to his
performance as Chief Executive Officer of the Company and as Chief Executive
Officer of Congoleum Corporation, taking into account certain payments by
Congoleum Corporation to the Company relating to, among other things, Mr.
Marcus's service as Chief Executive Officer of Congoleum Corporation. In
awarding Mr. Marcus's 2002 bonus, the Compensation Committee also considered the
performance of the Common Stock and Mr. Marcus's role in promoting the long-term
strategic growth of the Company.

STOCK OPTIONS

Under the Company's 1993 Stock Award and Incentive Plan, as amended,
stock options are granted to the Company's executive officers. Stock options are
granted to the Company's executive officers by the Compensation Committee or the
Stock Award Committee, as appropriate. Currently, these committees set
guidelines for the size of stock option awards based on factors similar to those
used to determine base salaries and annual bonus. Stock options are designed to
align the interests of executives with those of the stockholders.

Under the 1993 Stock Award and Incentive Plan, as amended, stock options
are typically granted with an exercise price equal to the market price of the
Common Stock on the date of grant and vest over time. This approach is designed
to encourage the creation of stockholder value over the long term since the full
benefit of options granted under the plan cannot be realized unless stock price
appreciation occurs over time.

SUPPLEMENTAL BENEFITS

In 1996, the Compensation Committee established supplemental benefits
for certain executive officers of the Company. These supplemental benefits were
proposed and approved as a means of addressing the substantial inequity to the
five most highly compensated executive officers of the Company created by the
cap on credited compensation under the Company's qualified pension plan
described below under the caption "Defined Benefit Pension Plan." The Company
entered into split-dollar life insurance agreements for the benefit of each of
William M. Marcus, Richard G. Marcus, Roger S. Marcus, J. Dennis Burns and
Howard N. Feist III. Under these contracts, the Company agreed to pay a portion
of premiums due over a specified time period on certain variable life insurance
policies providing life insurance protection for the family of each executive
officer, subject to various terms and conditions.

Premiums paid in 2001 under the split-dollar agreements are reflected in
the Summary Compensation Table set forth below under the column entitled "All
Other Compensation." The Company did not pay premiums under these agreements in
2002 or 2003 because it is not clear whether such payments could be considered
prohibited loans under the Sarbanes-Oxley Act of 2002. Because of this potential
prohibition, as well as recent tax law changes, the Compensation Committee has
determined these split dollar agreements are no longer a viable means of
achieving their intended purpose and is considering alternatives.

EMPLOYMENT AGREEMENTS

No executive officer of the Company has an employment agreement with the
Company.

CONCLUSION

Through the programs described above, a significant portion of the
Company's executive compensation is linked directly to individual and corporate
performance. In 2003, 1% of the Company's executive compensation consisted of
performance-based variable elements. In the case of Roger S. Marcus, none of his
2003 compensation consisted of performance-based variable elements. The
Compensation Committee intends to continue the policy of linking executive
compensation to corporate and individual performance, recognizing that the ups
and downs of the business cycle from time to time may result in an imbalance for
a particular period.

COMPENSATION COMMITTEE

Mark N. Kaplan, Chairman
John C. Garrels III
Kenneth I. Watchmaker

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee of the Board during 2003 are
listed above, none of whom is or was at any time during 2003 or at any previous
time an officer or employee of the Company. Mark N. Kaplan is presently Of
Counsel to Skadden, Arps, Slate, Meagher & Flom LLP, a law firm used for a
number of matters by the Company in 2003. The Company has retained Skadden,
Arps, Slate, Meagher & Flom LLP during 2004 and proposes to retain the firm
during the remainder of 2004. Mr. Kaplan is also a director of Congoleum
Corporation and serves on the Audit and Compensation Committees of Congoleum.

CODE OF ETHICS

The Company has adopted a code of ethics (as that term is defined in
Item 406 of Regulation S-K of the regulations promulgated by the SEC) that
applies to the principal executive officer, principal financial officer,
principal accounting officer or controller and all other employees of the
Company. The text of the Company's code of ethics is posted on our Internet
website www.ambilt.com or may be obtained without charge by sending a written
request to Mr. Henry W. Winkleman, Secretary of the Company, at the Company's
office at 57 River Street, Wellesley Hills, Massachusetts 02481.

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation
earned by or paid to the Company's Chairman of the Board and Chief Executive
Officer and the Company's four other most highly compensated officers
collectively, the "named executive officers" for services rendered to the
Company and its subsidiaries in all capacities during each of the last three
years. The table also identifies the principal capacity in which each of the
named executives served the Company at the end of 2003.

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION AWARDS
-------------------------
SECURITIES
ANNUAL COMPENSATION SECURITIES UNDERLYING ALL OTHER
----------------------- UNDERLYING CONGOLEUM COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ABI OPTIONS OPTIONS ($)(1)
--------------------------- ---- ----------- ---------- ----------- --------- ------------

Roger S. Marcus ..................... 2003 557,500 0 -- -- 16,186
Chairman of the Board and 2002 550,000 150,000 -- 200,000 16,000
Chief Executive Officer 2001 540,000 425,000 -- -- 196,800

Richard G. Marcus ................... 2003 557,500 0 -- -- 16,186
President and 2002 550,000 150,000 -- 200,000 16,000
Chief Operating Officer 2001 540,000 425,000 -- -- 156,800

William M. Marcus ................... 2003 446,000 0 -- -- 16,186
Executive Vice President 2002 440,000 120,000 -- 5,000 16,000
and Treasurer 2001 432,000 160,000 -- -- 226,800

Howard N. Feist III ................. 2003 255,600 25,000 -- -- 7,715
Vice President-Finance 2002 247,500 35,000 -- 15,000 6,000
And Chief Financial Officer 2001 237,500 45,000 -- -- 61,800

J. Dennis Burns ..................... 2003 230,000 0 -- -- 7,860
Vice President and General 2002 223,300 20,000 -- -- 6,000
Manager, Tape Products 2001 215,000 25,000 -- -- 18,800
Division

------------------
(1) The amounts disclosed in this column include:

(a) Company contributions of $6,000 in 2003 $6,800 in 2002 and
$6,000 in 2001, under the Section 401(k) Savings Investment
Plan, on behalf of each individual listed;

(b) payment by the Company of $10,000 in each of 2003, 2002, and
2001 to individual life insurance trusts for Roger S. Marcus,
Richard G. Marcus and William M. Marcus;

(c) premiums paid by the Company in 2001 under split-dollar
insurance arrangements on behalf of Roger S. Marcus, Richard G.
Marcus, William M. Marcus, J. Dennis Burns and Howard N. Feist
III, totaling $180,000, $140,000, $210,000, $12,000, and $55,000
respectively for each individual; and

(d) Company paid group-term life insurance premiums on behalf of
Roger S. Marcus, Richard G. Marcus, William M. Marcus, J. Dennis
Burns Howard N. Feist III totaling $186, $186, $186, $1,715 and
$1,860 respectively.

STOCK OPTIONS

The table below sets forth information relating to stock option
exercises in 2003 by the named executive officers of the Company and the number
and value of each such officer's unexercised in-the-money options/SARs on
December 31, 2003 based upon the difference between exercise price and closing
price per share at fiscal year-end.

OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE MONEY
COMPANY SHARES OPTIONS/SARS AT 12/31/03 OPTIONS/SARS AT 12/31/03
GRANTING ACQUIRED ON VALUE ---------------------------------- ----------------------------------
NAME OPTIONS EXERCISE (#) REALIZED ($) EXERCISABLE (#) UNEXERCISABLE (#) EXERCISABLE (#) UNEXERCISABLE (#)
---- ---------- ------------ ------------ --------------- ----------------- --------------- -----------------

Roger S. ........ ABI -- -- 50,000 0 0 0
Marcus Congoleum -- -- 40,000 160,000 0 0

Richard G. ...... ABI -- -- 50,000 0 0 0
Marcus Congoleum -- -- 40,000 160,000 0 0

William M. ...... ABI -- -- 40,000 0 0 0
Marcus Congoleum -- -- 1,000 4,000 0 0

Howard N. ....... ABI -- -- 8,000 2,000 0 0
Feist III Congoleum -- -- 3,000 12,000 0 0

J. Dennis ....... ABI -- -- 6,000 0 0 0
Burns

DEFINED BENEFIT PENSION PLAN

In addition to the remuneration set forth above, the Company maintains a
tax-qualified defined benefit pension plan (the "Pension Plan"). The following
table shows for various income and service levels, the annual benefits payable
under the Pension Plan, commencing at normal retirement at age 65. These
benefits are presented on a five years certain and life thereafter basis and
reflect any reduction for Social Security or other offset amounts that may
apply.

APPROXIMATE ANNUAL PENSION AT AGE 65

YEARS OF SERVICE
--------------------------------------------------------------------------------------
FINAL AVERAGE
ANNUAL COMPOSITION 15 20 25 30 35 40 45
------------------ -------- -------- -------- -------- -------- -------- --------

$200,000 $24,400 $32,500 $40,600 $48,700 $56,800 $65,000 $71,100
$300,000 24,400 32,500 40,600 48,700 56,800 65,000 71,100
$400,000 24,400 32,500 40,600 48,700 56,800 65,000 71,100
$500,000 24,400 32,500 40,600 48,700 56,800 65,000 71,100

The Pension Plan provides non-contributory benefits based upon years of
service and average annual earnings for the 60 consecutive months in which the
participating employee had the highest level of earnings during the 120
consecutive months preceding retirement.

The compensation used to determine a person's benefits under the Pension
Plan is such person's salary (including amounts deferred as salary reduction
contributions to any applicable tax-qualified plans maintained under Sections
401(k) or 125 of the Internal Revenue Code of 1986, as amended). The Internal
Revenue Service has limited the maximum compensation for benefit purposes to
$200,000 in 2003. Salary amounts listed in the Summary Compensation Table are
items of compensation covered by the Pension Plan. The table below sets forth
certain information relating to the Pension Plan with respect to the five most
highly compensated executive officers of the Company.

2003 REMUNERATION CREDITED YEARS
NAME COVERED BY PLAN OF SERVICE
---- --------------- ----------
Roger S. Marcus $200,000 36
Richard G. Marcus 200,000 33
William M. Marcus 200,000 43
Howard N. Feist III 200,000 22
J. Dennis Burns 200,000 19

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During 2003, the Company retained the services of the law firm Skadden,
Arps, Slate, Meagher & Flom LLP for a variety of legal matters. The Company has
retained Skadden, Arps, Slate, Meagher & Flom LLP during 2004 and proposes to
retain that firm during the remainder of 2004. Mr. Kaplan is of counsel to
Skadden, Arps, Slate, Meagher & Flom LLP.

During 2003, the Company employed Mr. William M. Marcus's son in a
marketing position, with compensation paid (including salary, value of company
provided automobile, and 401(k) match) for 2003 of $68,707. The Company and
Congoleum Corporation also engaged Mr. Richard G. Marcus's daughter to provide
consulting services for which she was paid $3,394. During 2003, Congoleum
Corporation employed Mr. Roger S. Marcus's two daughters, both in marketing
positions, with compensation paid (including salary, value of company provided
automobile, 401(k) match, and pay in lieu of medical benefits, as applicable)
for 2003 of $26,768 and $71,349 respectively, and employed his son-in-law in an
administrative position. Congoleum Corporation also employed Mr. Richard G.
Marcus's son in a marketing position with compensation paid (including salary,
value of company provided automobile and 401(k) match) of $70,351. One of Mr.
Roger Marcus' daughters left Congoleum Corporation in 2003. The Company
currently does not contemplate using the consulting services of Mr. Richard
Marcus' daughter in 2004. All other employment relationships are expected to
continue during 2004.

The Company and K&M Associates L.P., a Rhode Island limited partnership
("K&M") of which the Company has a controlling interest, make some of their
business travel and lodging arrangements for their employees through Winkleman
Travel, a travel agency owned by Joseph Winkleman, the brother of Henry W.
Winkleman, Vice President, Corporate Counsel and Secretary of the Company.
During 2003, the Company and K&M made business travel and lodging arrangements
negotiated on an arms length basis with Winkleman Travel of approximately
$64,000. Winkleman Travel earns commissions from the provider of the travel and
lodging as well as through service fees charged to the Company and K&M for the
booking and writing of airline tickets. The Company and K&M expect to continue
purchasing travel arrangements from Winkleman Travel in 2004.

CHANGE OF CONTROL ARRANGEMENTS

Under the terms of the Company's 1993 Stock Award and Incentive Plan, as
amended and restated as of March 4, 1997 (the "1993 Plan"), all outstanding
awards granted under that plan that were not previously exercisable and vested
will become fully vested and exercisable if: (i) any person (other than an
exempt person (as defined in the succeeding sentence)) is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities; (ii) during any period of two consecutive years,
individuals who at the beginning of that two-year period constitute the entire
Board, and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction of the
type referred to in clauses (i), (iii) or (iv) of this paragraph) whose election
to the Board or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then in office who
either were directors at the beginning of that two-year period or whose election
or nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board; (iii) the Company's stockholders
approve a merger or consolidation of the Company with any other corporation,
other than (a) a merger or consolidation which would result in the Company's
voting securities outstanding immediately prior to the consummation of that
transaction representing 50% or more of the combined voting power of the
surviving or parent entity outstanding immediately after the merger or
consummation or (b) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person
(other than an exempt person) acquires 50% or more of the combined voting power
of the Company's then outstanding voting securities; or (iv) the Company's
stockholders approve a plan of complete liquidation of the Company or an
agreement for the sale of all, or substantially all of, the Company's assets (or
any transaction having a similar effect). For purposes of the 1993 Plan, an
"exempt person" means (a) the Company, (b) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, (c) any
corporation owned, directly or indirectly, by the Company's stockholders in
substantially the same proportions as their ownership of the Company, or (d) any
person or group of persons who, immediately prior to the adoption of the 1993
Plan owned more than 50% of the combined voting power of the Company's then
outstanding voting securities.

CUMULATIVE TOTAL STOCKHOLDER RETURN

The graph that follows compares the cumulative total stockholder return
of the Common Stock to the cumulative returns of the American Stock Exchange
Market Value Index and a Peer Group Index which includes companies in Standard
Industrial Classification (SIC) code number 3089--Plastic Products, N.E.C.

COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG AMERICAN BILTRITE INC.,
AMEX MARKET INDEX AND SIC CODE INDEX

[PERFORMANCE GRAPH]

1998 1999 2000 2001 2002 2003
AMERICAN BILTRITE INC. 100.00 71.40 74.02 76.25 52.98 44.52
SIC CODE INDEX 100.00 96.55 64.14 76.15 67.66 79.96
AMEX MARKET INDEX 100.00 124.67 123.14 117.47 112.78 153.50

ASSUMES $100 INVESTED ON JAN. 1, 1998
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2003

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

The Audit Committee has selected Ernst & Young LLP as independent
auditors to audit the financial statements of the Company for 2004. Fees billed
by Ernst & Young LLP for 2002 and 2003 are as follows:

AUDIT FEES

The aggregate fees and expenses billed by Ernst & Young LLP for
professional services rendered for the audit of the financial statements of the
Company for 2002 and 2003 and the reviews of the Company's quarterly financial
statements included in the Company's Quarterly Reports on Form 10-Q for 2002 and
2003 were $791,500 and $882,000 respectively, ($280,000 in 2002 and $300,500 in
2003 of such fees was for services provided to Congoleum.)

AUDIT RELATED FEES

The aggregate fees and expenses billed by Ernst & Young LLP for
professional services rendered for the audit related services which were
primarily related to audits of the employee benefit plans and services with
respect to internal controls for 2002 and 2003 were $74,500 and $100,500
respectively, ($38,000 in 2002 and $50,000 in 2003 of such fees was for services
provided to Congoleum.)

TAX FEES

The aggregate fees billed by Ernst & Young LLP for tax services related
to tax compliance, tax advice, tax planning and tax examination assistance in
2002 and 2003 were $155,500 and $494,400 respectively, ($10,500 in 2002 and
$26,000 in 2003 of such fees was for services provided to Congoleum.)

ALL OTHER FEES

The aggregate fees billed by Ernst & Young LLP for all other services
rendered to the Company other than those mentioned above for 2002 and 2003 were
$0 and $31,000, respectively, which related to services in connection
Congoleum's filing a petition under Chapter 11 of the federal Bankruptcy Code.

Audit fees for 2002 include additional billings not known at the time
the Company filed last year's Proxy.

Fees for services provided to Congoleum Corporation are approved by
Congoleum's audit committee. The Audit Committee does not pre-approve fees for
services for Congoleum but considers the amounts of such fees paid when making
judgments regarding independence. All audit related services, tax services and
other services, other than those provided to Congoleum, were pre-approved by the
Audit Committee, which concluded that the provision of such services by Ernst &
Young was compatible with the maintenance of that firm's independence in the
conduct of its auditing functions. The Audit Committee's pre-approval policy and
procedure is to review proposed Ernst & Young's audit, audit-related services,
tax services and other services and pre-approve such services specifically
described to the Committee on an annual basis. In addition, individual
engagements anticipated to exceed pre-established thresholds must be separately
approved. The policy authorizes the Committee to delegate to one or more members
of the Committee pre-approval authority with respect to permitted services. The
Audit Committee did not approve any services pursuant to Rule 2-01(c)(7)(i)(C)
of Regulation S-X of the regulations promulgated by the SEC.

Representatives of Ernst & Young LLP are expected to be present at the
Meeting, will be given an opportunity to make a statement if they desire to do
so, and are expected to be available to respond to appropriate questions.

SHAREHOLDER COMMUNICATION POLICY

The Company has established procedures for shareholders to communicate
directly with the Board of Directors on a confidential basis. Shareholders who
wish to communicate with the Board or with a particular director may send a
letter to the Secretary of the Corporation at 57 River Street, Wellesley Hills,
Massachusetts 02481 Attention: Henry W. Winkleman. The mailing envelope must
contain a clear notation indicating that the enclosed letter is a
"Shareholder-Board Communication" or "Shareholder-Director Communication." All
such letters must identify the author as a shareholder and clearly state whether
the intended recipients are all members of the Board or just certain specified
individual directors. The Secretary will make copies of all such letters and
circulate them to the directors addressed. To the extent that a shareholder
wishes the communication to be confidential, such shareholder must clearly
indicate on the envelope that the communication is "confidential." The Secretary
will then forward such communication, unopened, to the Chairman of the Board of
Directors.

SUPPLEMENTAL INFORMATION

On December 31, 2003, Congoleum Corporation filed a petition for
reorganization under Chapter 11 of the United States Bankruptcy Code. Roger S.
Marcus, Richard G. Marcus and Howard N. Feist III were executive officers of
Congoleum Corporation at the time of such filing.

STOCKHOLDER PROPOSALS

Stockholder proposals intended to be presented at the year 2004 Annual
Meeting of Stockholders pursuant to Rule 14a-8 under the Exchange Act must be
received by the Company at the Company's principal executive offices by November
30, 2004. In order for stockholder proposals made outside of Rule 14a-8 under
the Exchange Act to be considered "timely" within the meaning of Rule 14a-4(c)
under the Exchange Act, such proposals must be received by the Company at the
Company's principal executive offices by February 13, 2005.

OTHER MATTERS

Management of the Company has no knowledge of any other matters which
may come before the Meeting and does not itself intend to present any such other
matters. However, if any such other matters shall properly come before the
Meeting or any adjournment thereof, the persons named as proxies will have
discretionary authority to vote the shares represented by the accompanying proxy
in accordance with their best judgment.

By Order of the Board of Directors
AMERICAN BILTRITE INC.

Henry W. Winkleman
Secretary

Wellesley Hills, Massachusetts
April 15, 2004

APPENDIX A

CHARTER OF THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS OF AMERICAN BILTRITE INC.
AS ADOPTED BY THE BOARD ON MARCH 24, 2004

1. PURPOSE OF THE COMMITTEE

The Committee's purpose is to provide oversight of matters involving the
accounting, auditing, financial reporting, and internal control functions of the
Company and its subsidiaries.

2. COMPOSITION OF THE COMMITTEE

The Committee shall be comprised of three or more independent directors
as determined from time to time by resolution of the Board. The Chairman of the
Committee shall be designated by the Board, PROVIDED that if the Board does not
so designate a Chairman, the members of the Committee, by majority vote, may
designate a Chairman. Each member of the Committee shall be qualified to serve
on the Committee pursuant to the requirements of the AMEX, the SEC, the
Sarbanes-Oxley Act, and other regulations or regulatory bodies.

3. MEETINGS OF THE COMMITTEE

The Committee shall hold four regularly scheduled meetings per year and
additional meetings as it shall determine is necessary to carry out its duties
and responsibilities. The Committee, in its discretion, may ask members of
management or others to attend its meetings (or portions thereof) and to provide
pertinent information as necessary. The Committee shall maintain minutes of its
meetings and records relating to those meetings and provide copies of such
minutes to the Board.

4. RESPONSIBILITIES OF THE COMMITTEE

In order for the Audit Committee to effectively carry out its purposes,
its processes must remain flexible so it can best react to changing conditions,
information, accounting rules, securities laws and regulations and other factors
which bear on its responsibilities. The key responsibilities described in this
Charter, therefore, shall define the principal recurring processes of the Audit
Committee. These processes are set forth as a guide with the understanding that
the Audit Committee may supplement them as it deems necessary or appropriate to
accomplish its purposes.

The Company's management is responsible for preparing the Company's
financial statements in accordance with generally accepted accounting principles
("GAAP") and its periodic reports as required by the Securities and Exchange
Commission (the "SEC"). The Company's auditor is responsible for auditing the
Company's annual financial statements and reviewing the Company's interim
financial statements. While the Audit Committee has responsibility to oversee
management's and the auditor' conduct of these activities, it is not the
responsibility of the Audit Committee to plan or conduct audits or to determine
that the Company's financial statements are complete and accurate or are in
compliance with GAAP.

The Audit Committee is expected to maintain free and open communication
with the auditor and management of the Company. In order to facilitate such free
and open communication, the Audit Committee should meet with members of
management, the internal auditor and the independent auditor, separately, at
least once a year and at such other times as the members of the Audit Committee
deem it necessary or appropriate to accomplish its purposes.

Nothing contained in this charter is intended to, or should be construed
as, creating any responsibility or liability of the members of the Committee
except to the extent otherwise provided under Delaware law which shall continue
to set the legal standard for the conduct of the members of the Committee.

5. DUTIES OF THE COMMITTEE

The Committee shall fulfill its oversight responsibilities by
accomplishing the following:

APPOINTMENT, COMPENSATION, RETENTION AND OVERSIGHT OF INDEPENDENT AUDITOR

(a) Annually evaluate, determine the selection of, and if necessary,
determine the replacement of or rotation of, the independent
auditor.

A-1

(b) Review, evaluate and discuss formal reports, at least annually,
from the independent auditor regarding the auditor's
independence, including a delineation of all relationships
between the independent auditor and the Company and the written
disclosures required by the Independence Standards Board; and
recommend actions to satisfy the Board of the independence of
the independent auditor.

(c) Approve or pre-approve all auditing services (including comfort
letters and statutory audits) and all permitted non-audit
services by the independent auditor.

(d) At least annually, receive a report from the independent auditor
detailing the firm's internal quality control procedures and any
material issues raised by the independent auditor's internal
quality control review, peer review or any governmental or other
professional inquiry performed within the past five years and
any remedial actions implemented by the firm.

(e) Establish hiring policies for employees or former employees of
the independent auditors.

OVERSIGHT OF AUDIT PROCESS AND COMPANY'S LEGAL COMPLIANCE PROGRAM

(a) Review with management, the internal auditor and the independent
auditor the overall scope and plans for audits. Review with
management, the internal auditor, and the independent auditor
any difficulties or disputes with management encountered in
connection with the audits.

(b) Review and discuss with management, the internal auditor, and
independent auditor the Company's system of internal control,
including information systems controls and security, its
financial and critical accounting practices, and policies
relating to risk assessment, including steps that management has
taken to minimize risk to the Company.

(c) Receive and review reports of the independent auditor discussing
(i) all critical accounting policies and practices used in the
preparation of the Company's financial statements, (ii) all
alternative treatments of financial information within generally
accepted accounting principles ("GAAP") that have been discussed
with management, ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred by the
independent auditor, and (iii) other material written
communications between the independent auditor and management,
such as any management letter or schedule of unadjusted audit
differences.

(d) Discuss with management and the independent auditor any changes
in the Company's critical accounting policies and the effects of
alternative GAAP methods, off-balance sheet structures and
regulatory and accounting initiatives.

(e) Review and discuss with management and the independent auditor
the annual and quarterly financial statements and the Company's
"Management's Discussion and Analysis of Financial Conditions
and Results of Operations" ("MD&A") prior to the filing of the
Company's Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q. Discuss any significant changes in the audit plan,
results of the annual audit and quarterly review and any other
matters required to be communicated to the committee by the
independent auditor under generally accepted auditing standards.
Discuss with management and the independent auditor their
judgment about the quality of accounting principles, the
reasonableness of significant judgments, including a description
of any transactions as to which the management obtained
Statement on Auditing Standards No. 50 letters, and the clarity
of disclosures in the financial statements, including the
Company's disclosures of critical accounting policies and other
disclosures.

(f) Review, or establish standards for the type of information and
the type of presentation of such information to be included in,
earnings press releases and earnings guidance provided to any
analysts.

(g) Receive from the Chief Executive Officer and Chief Financial
Officer a report of all significant deficiencies and material
weaknesses in the design or operation of internal controls over
financial reporting, and any fraud that involves management or
other employees who have a significant role in the company's
internal controls over financial reporting.

(h) Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting,
internal accounting controls or auditing matters, and the
confidential, anonymous submissions by employees of concerns
regarding questionable accounting or auditing matters.

A-2

OTHER RESPONSIBILITIES

(a) Review and concur in the appointment, replacement, reassignment,
or dismissal of the internal auditor and other senior financial
officers.

(b) Prepare a report for inclusion in the Company's annual proxy
statement as required by the rules of the Securities and
Exchange Commission.

(d) Annually perform, or participate in, an evaluation of the
performance of the Committee, the results of which shall be
presented to the Board.

Perform any other activities consistent with the Charter, By-laws and
governing law as the Board or the Audit Committee shall deem appropriate.

6. AUTHORITY AND RESOURCES OF THE AUDIT COMMITTEE

The Committee has the authority to retain legal, accounting or other
experts that it determines to be necessary to carry out its duties. It also has
authority to determine compensation for such advisors as well as for the
independent auditor. The Committee may determine appropriate funding needs for
its own ordinary administrative expenses that are necessary and appropriate to
carrying out its duties. Funding for such retained services shall be provided
for by the Company.

A-3

[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE AMERICAN BILTRITE INC.

ANNUAL MEETING OF STOCKHOLDERS MAY 10, 2004 WITH- FOR ALL
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR HOLD EXCEPT
1. ELECTION OF CLASS II DIRECTORS [ ] [ ] [
The undersigned hereby appoints Roger S. Marcus, Richard (except as marked to the contrary
G. Marcus and William M. Marcus and each of them, as attorneys below):
and proxies, with full power of substitution, to represent and
to vote, as designated below, at the Annual Meeting of
Stockholders of American Biltrite Inc. (the "Company") to be NOMINEES: JOHN C. GARRELS III JAMES S. MARCUS
held at the FleetBoston Financial Corporation, America Room, ROGER S. MARCUS
2nd Floor, 100 Federal Street, Boston, Massachusetts on
Monday, May 10, 2004, at 10:00 A.M., local time, and at any INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
adjournment thereof, all shares of Common Stock of the Company NOMINEE, MARK "FOR ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME
which the undersigned could vote if present in such manner as IN THE SPACE PROVIDED BELOW.
such proxies may determine on any matters which may properly
come before the meeting and to vote on the following as ----------------------------------------------------------------
specified hereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH
NOMINEE.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE
PROPOSAL. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO
VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.

Note: Signature(s) should agree with name(s) as printed
hereon. All joint owners and fiduciaries should sign. When
signing as attorney, executor, administrator, trustee,
guardian or custodian for a minor, please give full title as
such. If a corporation, please sign full corporate name and
indicate the signer's office of authority. If a partner, sign
in partnership name by authorized person.
------------------------
Please be sure to sign and date Date
this Proxy in the box below.
--------------------------------------------------------------

---Stockholder sign above----Co-holder (if any) sign above----

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^ DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE-PAID ENVELOPE PROVIDED. ^

AMERICAN BILTRITE INC.

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PLEASE FILL IN DATE, SIGN AND MAIL THIS PROXY IN
THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE
----------------------------------------------------------------------------------------------------------------------------

IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE
ENVELOPE PROVIDED.

_______________________________________________________________