SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )_X_ Filed by the registrant [X]Registrant
____ Filed by a partyParty other than the registrant [ ]Registrant
Check the appropriate box:
[ ]_____ Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ]Proxy Statement
_____ Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
DEVELOPED TECHNOLOGY RESOURCE, INC.
- --------------------------------------------------------------------------------_X__ Definitive Proxy Statement
_____ Definitive Additional Materials
_____ Soliciting Material Pursuant to 240.14a-11c or
240.14a-12
Developed Technology Resource, Inc., a Minnesota Corporation
(Name of Registrant as Specified inIn Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]
__X__ No fee required
[ ]required.
_____ Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1)O-11.
1. Title of each class of securities to which transaction
applies:
(2)2. Aggregate number of securities to which transactionstransaction applies:
(3)3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11. (Set0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined.)
(4)determined):
4. Proposed maximum aggregate value of transaction:
(5)5. Total fee paid:
[ ]_____ Fee paid previously with preliminary materials.
[ ]_____ Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1)1. Amount previously paid:
(2)Previously Paid:
2. Form, Schedule or Registration Statement No.:
(3)3. Filing party:
(4)Party:
4. Date filed:Filed:
DEVELOPED TECHNOLOGY RESOURCE, INC.
12800 WHITEWATER DRIVE, SUITE 170
MINNETONKA, MINNESOTA 55343
---------------------7300 Metro Blvd., Suite 550
Edina, Minnesota 55439
(ph: 952-820-0022)
_____________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1997To Be Held June 27, 2000
To the Shareholders of
Developed Technology Resource, Inc.
The Annual Meeting of the Shareholders of Developed
Technology Resource, Inc. (the "Company" or "DTR"), will be held
on Thursday, April 24,
1997,Tuesday, June 27, 2000, at 4 p.m. Minneapolis Time,10:00 a.m. CDT, at the offices of Lurie, Besikof, Lapidus &
Co., LLP, 2501 WayzataOne
Corporate Center, 7300 Metro Boulevard, Minneapolis, MN 55405,Suite 160, Edina,
Minnesota 55439, for the following purposes:
1. To elect three directors of the Company to serve untilCompany.
2.To ratify the next Annual
Meetingappointment of Shareholders and until their successors are elected and have
qualified.
2. To approve the Amendment dated September 30, 1996, to the 1992 Stock
Option Plan.KPMG LLP as independent auditors.
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on
March 7,
1997,May 8, 2000, as the record date for the determination of
shareholders entitled to vote at the Annual Meeting and to
receive notice thereof. The transfer books of the Company will
not be closed.
A PROXY STATEMENT AND FORM OF PROXY ARE ENCLOSED.
SHAREHOLDERS ARE REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED
PROXY TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
ENCLOSED ENVELOPE IN THE UNITED STATES. IT IS IMPORTANT THAT
PROXIES BE RETURNED PROMPTLY WHETHER OR NOT YOU EXPECT TO ATTEND
THE MEETING IN PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY
REVOKE THEIR PROXIES AND VOTE IN PERSON IF THEY DESIRE.
By Order of the Board of Directors
John P. Hupp/s/ LeAnn H. Davis
LeAnn H. Davis
Secretary and President
Minnetonka,Chief Financial
Officer
Edina, Minnesota U.S.A.
February 26, 1997April 27, 2000
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed
proxy, date and sign it, and return it in the envelope provided,
which is addressed for your convenience.
No postage is required if mailed in the United States.
PLEASE MAIL YOUR PROXY PROMPTLY
DEVELOPED TECHNOLOGY RESOURCE, INC.
12800 WHITEWATER DRIVE, SUITE 170
MINNETONKA, MINNESOTA 55343
TELEPHONE (612) 938-7080
---------------------7300 Metro Blvd., Suite 550
Edina, Minnesota 55439
Telephone (952) 820-0022
_____________________
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 1997
---------------------for the Annual Meeting of Shareholders
June 27, 2000
_____________________
GENERAL INFORMATION
This proxy statement is furnished to shareholders by the
Board of Directors of Developed Technology Resource, Inc. (the
"Company") for solicitation of proxies for use at the Annual
Meeting of Shareholders to be held on Thursday, April 24, 1997,Tuesday, June 27, 2000, at
4:10:00 pma.m. CDT, at Lurie, Besikof, Lapidus & Co., LLP,
2501 Wayzatathe One Corporate Center, 7300 Metro
Boulevard, Minneapolis, MN 55405,Suite 160, Edina, Minnesota 55439, and at all
adjournments thereof, for the purposes set forth in the attached
Notice of Annual Meeting of Shareholders.
Shareholders may revoke proxies before exercise by
submitting a subsequently dated proxy or by voting in person at
the Annual Meeting. Unless a shareholder gives contrary
instructions on the proxy card, proxies will be voted at the
meeting to elect as directors the three nominees listed thereon.
This proxy statement and the enclosed proxy are being mailed to
the shareholders of Developed Technology Resource, Inc. on or
about March 24, 1997.May 26, 2000.
The Company will be providing without charge to each
stockholder a copy of the Annual Report on Form 10-KSB for the fiscal year ended OctoberDecember 31,
1996,1999, including the consolidated financial statements, and schedules thereto, filed with
the Securities and Exchange Commission, and this proxy in March.May
2000. If a stockholder requests copies of any exhibits of such
Form 10-KSB, the Company may require the payment of a fee
covering its reasonable expenses. A written request should be
addressed to the Company at the address shown above.
The cost of soliciting proxies, including their preparation,
assembly, and mailing, will be borne by the Company. In addition
to the solicitation of proxies by use of the U.S. Postal Service,
certain officers and regular employees who will receive no extra
compensation for their services may solicit proxies in person or
by telephone or facsimile. The Company may reimburse brokerage
firms and others for expenses in forwarding solicitation
materials to the beneficial owners of Common Stock.
OUTSTANDING SHARES AND VOTING RIGHTS
At the close of business on January 31, 1997,April 27, 2000, there were
outstanding 790,820930,820 shares of Common Stock, par value $.01 per
share, which is the only outstanding class of stock of the
Company. Each share is entitled to one vote. As provided in the
Articles of Incorporation of the Company, there is no right of
cumulative voting. All matters being voted upon by the
shareholders require a majority vote of the shares represented at
the Annual Meeting either in person or by proxy.
The presence at the Annual Meeting in person or by proxy of
the holders of a majority of the outstanding shares of the
Company's Common Stock entitled to vote constitutes a quorum for
the transaction of business. Shares voted as abstentions on any
matter (or a "withhold authority" vote as to directors) will be
counted as present and entitled to vote for purposes of
determining a quorum and for purposes of calculating the vote
with respect to such matter, but will not be deemed to have been
voted in favor of such matter. If a broker submits a proxy that
indicates the broker does not have discretionary authority to
vote certain shares on a particular matter, those shares will be
counted as present for purposes of determining a quorum, but will
not be considered present and entitled to vote for purposes of
calculating the vote with respect to such matter.
PRINCIPAL SHAREHOLDERS AND
MANAGEMENT OWNERSHIP OF MANAGEMENT
The following table contains information as of January 31, 1997,April 27,
2000, concerning the beneficial ownership of the Company's Common
Stock by persons known to the Company to beneficially own more
than 5% of the Common Stock, by each director, by each executive
officer named in the Summary Compensation Table, and by all
current and nominated directors and executive officers as a
group. Shares reported as beneficially owned include those for
which the named persons may exercise voting power or investment
power, and all shares owned by persons having sole voting and
investment power over such shares unless otherwise noted. The
number of shares reported as beneficially owned by each person as
of January 31, 1997,April 27, 2000, includes the number of shares that such person
has the right to acquire within 60 days of that date, such as
through the exercise of stock options or warrants that are
exercisable within that period.
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OWNED* PERCENTAGE OWNED
------------------------------------ ------------- ----------------
Vladimir Drits 70,252(2) 8.4%
11901 Meadow Lane West
Minnetonka, MN 55305
Peter L. Hauser 26,001(3)(4)(5) 3.0%
2820 IDS Tower
Minneapolis, MN 55402
Roger W. Schnobrich 19,034(5) 2.3%
222 South Ninth Street
Suite 3300
Minneapolis, MN 55402
John P. Hupp(1) 4,583(6) *Amount and Nature
Name and Address of of Beneficial Owner Percentage
Beneficial Owner Owned(A)
Vladimir Drits 71,835 (1) 6.5%
11901 Meadow Lane West
Minnetonka, MN 55305
Erlan Sagadiev 130,000 (2) 11.8%
7300 Metro Blvd, Suite 550
Edina, MN 55439
Roger W. Schnobrich (B) 35,700(3) 3.3%
222 South Ninth Street
Suite 3200
Minneapolis, MN 55402
John P. Hupp (B), (C) 148,800 (4) 13.5%
7300 Metro Blvd, Suite 550
Edina, MN 55439
Peter L. Hauser (B) 41,000 (5) 3.7%
2820 IDS Tower
Minneapolis, MN 55402
Beneficial Owners of 5% or 427,335 38.8%
more, Officers and
Directors as a group
All current directors and 225,500 20.5%
officers as a group 49,619(7) 5.7%
(3 people)
* Less than 1%(A) The total number of total shares outstanding.
- -----------outstanding assuming the exercise
of all currently exercisable and vested options and warrants
held by all executive officers, current directors, and holders
of 5% or more of the Company's issued and outstanding Common
Stock is 1,100,320 shares. Does not assume the exercise of any
other options or warrants.
(B) Designates a Director of the Company.
(C) Designates an Executive Officer of the Company.
(1) The named person's address is 12800 Whitewater Drive, Suite 170,
Minnetonka, Minnesota 55343.
(2) Includes 23,33323,335 shares of CommomCommon Stock gifted by Mr. Drits
to his spouse and children, and presntly exercisable options underchildren.
(2) Includes 90,000 shares held by DTR as collateral for Mr.
Sagadiev's $82,500 loan outstanding on the the
Company's 1992 Stock Option Planbalance owed for thehis
purchase of 833 shares.125,000 shares at $1.22 per share.
(3) Includes presently exercisable warrants for the purchase of 9,167
shares issued in 1992 under terms of a bridge loan agreement.
(4) Includes presently exercisable warrants for the purchase of 13,500
shares issued in 1993 under terms of the Company's initial public
offering.
(5) Includes presently exercisable options for the purchase of
3,33415,000 shares at $1.50 per share and 5,000 shares at $3.00 issued
under the terms of the 19931997 Outside Directors Stock Option Plan.
(6)(4) Includes presently exercisable options for the purchase of
4,583124,500 shares issued under termsat $1.22 per share and 20,000 shares at $1.37 per
share.
(5) Includes 6,000 shares held in IRA for the benefit of the Developed Technology Resource, Inc. 1992
Stock Option Plan. 8,333 exercisable option were replaced under a new
employment agreement dated September 30, 1996.
(7)Mr.
Hauser. Includes presently exercisable options for the purchase
of 11,2525,000 shares and presently exercisable warrants forat $3.00 issued under the purchaseterms of 22,667
shares.the 1997
Outside Directors Stock Option Plan.
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the number of
directors shall be as fixed from time to time by resolution of
the shareholders, subject to increase by the Board of Directors.
The Board is authorized to fill vacancies resulting from
increases in the size of the Board or otherwise. Currently there
are three directors.
The Board of Directors has nominated for election the
three personsDirectors named below. Each of the nominees is currently a
director of the Company whose current term expires at the Annual
Meeting. Unless authority is withheld, the proxies will be voted
FOR these nominees to serve as directors until the next Annual
Meeting of Shareholders and until their successors are elected
and have been qualified. If any one of the nominees is unable to
serve as a director by reason of death, incapacity or other
unexpected occurrence, the proxies will be voted for such
substitute nominee as is selected by the Board of Directors, but
in no event will proxies be voted for more than three nominees.
The Board of Directors is unaware of any reason why the nominees
would not be available for election or, if elected, would not be
able to serve.
DIRECTORS AND NOMINEESOfficers and Directors
The namesfollowing table sets forth the current and proposed directors
and executive officers of the nomineesCompany, their ages and certain information about them are set
forth below:
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
Peter L. Hauser(1)(2)(3) 55 Vice President and Principal of Equity 1993
Securities Trading Co., Inc.
John P. Hupp 37 President andpositions
with the Company as of April 27, 2000:
Name Age Position
Peter L. Hauser(1)(2) 59 Director
Roger W. 70 Director
Schnobrich(1)(2)
John P. Hupp 40 Director,
President, CEO
LeAnn H. Davis 30 Chief Financial
Officer, Corporate
Secretary of the Company 1996
Roger W. Schnobrich(1)(2) 67 Attorney, Popham, Haik, Schnobrich & Kaufman, 1993
Ltd.
- -----------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Pursuant to an Underwriting Agreement dated April 23, 1993 between the
Company and Equity Securities Trading Co., Inc. ("Equity Securities"),
in connection with the Company's initial public offering, the Company
granted Equity Securities the right until April 1998 to nominate one
member who is reasonably satisfactory to the Company for election to
the Company's Board of Directors. While maintaining the right to do so
in the future, Equity Securities has not exercised its right to
nominate a member to the board for this election.
Each nominee, if elected, will serve until the 1998 Annual
Meeting of Shareholders in the year 2001 and until a successor
has been elected and duly qualified or until the director's
earlier resignation or removal.
Mr. Hauser has been a director of the Company since October
of 1993. Since 1977, he has been employed by Equity Securities
Trading Co., Inc., a Minneapolis-based brokerage firm, and is
currently a vice president and principal.
Mr. Schnobrich has been a director of the Company since
October 1993. He is a partner with Hinshaw & Culbertson, a
Minneapolis law firm which serves as legal counsel to the
Company. Until 1997, he was an owner and attorney with Popham,
Haik, Schnobrich & Kaufman, Ltd., a Minneapolis-based law firm
which he co-founded in 1960. He also serves as a director of
Rochester Medical Corporation, a company that develops,
manufactures and markets improved, latex free, disposable
urological catheters.
Mr. Hupp has been the Company's President since June 1995,
and a director since April 1996. He was Corporate Secretary sincefrom
July 1994 until September 1997, and was Director of Legal Affairs
from July 1993 to June 1995. From June 1992 until June 1993, Mr.
Hupp was President of Magellan International Ltd., which marketed
on-line and hard-copyhard copy information for a Russian information
company. From March to June 1992, he served as Of Counsel for
the law firm of Hale & Dorr, establishing the firm's Moscow
office. His work included negotiating and establishing joint
ventures for clients. From September 1990 to January 1992, Mr.
Hupp was Senior Project Manager and Corporate Counsel with
Management Partnership International, Ltd. (MPI). Prior to his
work at MPI, Mr. Hupp was a trial lawyer for the firmsfirm of
Bollinger & Ruberry and Pretzel & Stouffer in Chicago for six
years. Mr. Hupp received a J.D. Degree from the University of
Illinois College of Law and a B.A. degrees in Russian Area Studies
and Political Science. Mr. Hupp has extensiveintensive language training
from the Leningrad State University in St. Petersburg, Russia.
Mr. Schnobrich has been a director ofLeAnn H. Davis, CPA was employed by the Company since Octoberas the
Controller on July 7, 1997 and on September 25, 1997 was named
Chief Financial Officer and Corporate Secretary. Prior to joining
the Company, Ms. Davis was CFO of 1993. He isGalaxy Foods Company in
Orlando, Florida from December 1995 to June 1997. From 1994 to
1995, she was a shareholdersenior auditor for Coopers and attorney with Popham, Haik, Schnobrich & Kaufman,
Ltd., a Minneapolis-based lawLybrand LLP in
Orlando, FL. From 1992 to 1994, she worked for the local public
accounting firm which he co-foundedof Pricher and Company in 1960 and which serves
as legal counsel to the Company. He also servesOrlando as a director of Rochester
Medical Corporation,senior
auditor and tax accountant. Prior to 1992, Ms. Davis worked for
Arthur Andersen LLP as a company that develops, manufacturesstaff auditor. Ms. Davis obtained a BS
in Business Administration and markets improved,
latex free, disposable urological catheters.a BS in Accounting from Palm Beach
Atlantic College in West Palm Beach, Florida in May 1990, and a
Masters in Accounting from Florida State University, Tallahassee,
Florida in August 1991.
Each Executive Officer of the Company is elected or
appointed by the Board of Directors of the Company and holds
office until hisa successor is elected, or until the earlier of
his death, resignation or removal.
To the knowledge of the Company, no executive officer or
director of the Company is a party adverse to the Company or has
material interest adverse to the Company in any legal proceeding.
The information given in this Proxy Statement concerning the
Directors is based upon statements made or confirmed to the
Company by or on behalf of such Directors, except to the extent
that such information appears in its records.
THE BOARD OF DIRECTORS RECOMMENDS A VOTEThe Board of Directors recommends a vote FOR EACH NOMINEE FOR ELECTION
TO THE BOARD OF DIRECTORS.
MEETINGS OF THE BOARD AND COMMITTEESeach nominee
for election to the Board of Directors.
Meetings of the Board and Committees
The Board of Directors held four formal meetings during fiscal 19961999
and adopted certain resolutions by written minutes of action. The
Board of Directors has two standing committees; an audit
committee and a compensation committee. All directors attended
all of the meetings
were attended by all directors.formal meetings. The Audit Committee is responsible
for reviewing the services rendered by the Company's independent
auditors and the accounting standards and principles followed by
the Company. The Audit Committee held one meeting during fiscal 1996,1999,
which was attended by all Committee members. The Compensation
Committee is responsible for making recommendations to the Board
of Directors regarding the salaries and compensation of the
Company's executive officers. The Compensation Committee met severalfour
times during fiscal 1996.
CERTAIN TRANSACTIONS1999.
Certain Transactions
The law firm of Pophaim Haik SchnobrichHinshaw & Kaufman Ltd.,Culbertson provides legal services
to the Company. Roger Schnobrich, a director of the Company, is
a shareholderpartner in the firm.
On December 3, 1998, SXD, DTR's wholly-owned subsidiary,
entered into an 8%, $600,000, unsecured, convertible promissory
note with Hyperport International (Hyperport). In addition to
the note, the SXD received warrants to purchase up to 60,000
shares of Hyperport's common stock at an exercise price of $10
per share. This loan was offered as part of a $1.2 million
bridge financing deal that was being administered by Equity
Securities Investments Inc. (Equity Securities). Peter Hauser,
one of DTR's current directors, is the Vice-President of Equity
Securities. In addition to the bridge financing, Equity
Securities was working with Hyperport as its agent to raise
additional financing through a private placement. This
relationship expired November 1999 and there is no current
commitment to renew. During 1999, the Company wrote down its
investment in this unaffiliated company to zero since there is
no guarantee as to when or if Hyperport will be able to repay
the loan. However, DTR is currently restructuring its loan and
is hopeful that it will recover the current balance of $649,288,
including interest, at a future date.
On February 1, 2000, Erlan Sagadiev exercised his right to
125,000 shares of the Company's common stock. He paid the
Company $70,000 and gave the Company a promissory note bearing
interest at 4.87% per annum for the balance owed of $82,500. The
principal and interest are due in five equal installments
beginning February 2001 and each year thereafter. This note is
secured by 90,000 of the exercised shares.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's
Officersofficers and Directors,directors, and persons who own more than 10 percent
of the registered class of the Company's equity securities to
file reports of ownership on Forms 3, 4, and 5 with the SEC.
Officers, Directorsdirectors and greater than 10 percent shareholders are
required by SEC regulation to furnish the Company with copies of
all Forms 3, 4, and 5 they file.
Based solely onupon the Company's review of the copies of such forms
it has received and representations from certain reporting persons that they were not
required to file Forms 5 for specified fiscal years,the year ended December 31, 1999,
the Company believes that all of its Executive Officers, Directorsexecutive officers,
directors and greater than 10 percent10% beneficial owners complied with
all filing requirements applicable to them with respect to
transactions during fiscal 1996.1999.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the cash and noncash
compensation for fiscal years 1996, 1995,ended December 31, 1999 and 19941998, the two-
month transition period ended December 31, 1997, and the year
ended October 31, 1997 awarded to or earned by the Chief
Executive Officer of the Company.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
------------------------------------------ LONG-TERM
FISCAL OTHER ANNUAL COMPENSATION
YEAR SALARY BONUS COMPENSATION AWARDS/OPTIONS
NAME AND PRINCIPAL POSITION ENDED ($) ($) ($) (#)
- --------------------------- --------- --------- ------- ------------- -------------
John P. Hupp, President and 1996 75,000Officer:
Summary Compensation Table
Annual Compensation Long-Term
Other Compensation
Fiscal Salary Bonus Annual Awards/Options
Name and Principal Year ($) Compensation
Position Ended _($)___ ___ ___($)____ ____(#)____
John P. Hupp, 1999 $110,000 none $3,300(2) none
President, CEO(1)
1998 $ 95,000 $16,000 $2,850(2) none
2-month $ 15,000 none none none
1997
1997 $ 87,500 none none none 250,000(3)
Secretary
(1) 1995 65,967 none none 8,333(2)
1994 60,342 none none 1,667
- -----------
(1) Mr. Hupp became President on June 16, 1995. Beginning June
15, 1993, as the Company's Director of Legal Affairs, Mr.
Hupp began to receive a full-time salary of $5,000 per month.
Effective June 16, 1995, onupon assuming the position of
President, his salary was increased to $6,250 per month.
(2) Mr. HuppEffective January 1997, his salary was issued an option forincreased to $7,500
per month; and effective October 1998, his salary was
increased to $9,167 per month.
(2)In 1998, the purchaseBoard of 8,333 shares (adjusted
for stock split) on June 15 under terms of his employment agreement.
These options were replaced underDirectors voted to contribute up to 3%
over the new employment agreement dated
September 30, 1996.
(3) Under the Amendment dated September 30, 1996employees' base salary to the 1992 Stocktheir respective Sar/Sep
retirement account.
Aggregated Option Plan, Mr. Hupp was issued an option to purchase 250,000 shares. This
amendment requires approval by the shareholders.
OPTION GRANTS DURING FISCAL 1996
On September 30, 1996, the 1992 StockExercises: Last Fiscal Year and Fiscal Year-End
Option Plan was amended
to increase the number of reserved shares of common stock from 200,000 to
600,000 shares. As required by Code Section 422 and the Plan, the foregoing
amendment requires approval by the shareholders.
As a result of this amendment, Mr. John Hupp, President, and
Mr. Erlan Sagadiev, General Director of DTR's Kazakhstan subsidiary, were each
granted an incentive stock option to purchase 250,000 shares of common stock of
the Company, par value one cent per share, at $1.00 per share pursuant to the
terms of their Employment Agreement effective September 30, 1996. An Amendment
to the Stock Option grant was made on December 11, 1996, whereby the option
price was adjusted to $1.22 per share.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
Number of Percent of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($) Date
John P. Hupp 250,000 50% $1.22 9/29/06
AGGREGATED OPTION EXERCISES: LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUESValues
The following table summarizes for the named executive
officerofficers the number of stock options exercised during the fiscal year
ended OctoberDecember 31, 1996,1999, the aggregate dollar value realized upon
exercise, the total number of unexercised options held at
OctoberDecember 31, 19961999 and the aggregate dollar value of in-the-money
unexercised options held at OctoberDecember 31, 1996.1999. Value realized
upon exercise is the difference between the fair market value of
the underlying stock on the exercise date and the exercise price
of the option. Value of Unexercised In-the-Money Options at fiscal year-endyear-
end is the difference between its exercise price and the fair
market value of the underlying stock on OctoberDecember 31, 19961999 which
was $1 1/2$1.125 per share.
AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND FISCAL YEAR-END OPTION VALUES
----------------------------------------------------------------------------
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT MONEY OPTIONS AT
NAME AND SHARES OCTOBER 31, 1996 (#) OCTOBER 31, 1996 ($)
PRINCIPAL ACQUIRED ON VALUE -------------------- --------------------
POSITION EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------- ----------- -------- ----------- ------------- ----------- -------------
Aggregated Option Exercises in Fiscal 1999 and Fiscal Year-End Option Values
Number of Value of Unexercised
Name and Unexercised In-the-Money Options
Principal Shares Value Options at at
Position Acquired Realized December 31, 1999 December 31, 1999 ($
on Exercise Exercisable Unexercisable Exercisable Unexercisable
John P. Hupp, None None 4,583 250,417(1) None None 150,000 100,000 $0 $0
Hupp(1),
President,
CEO
(1) Includes 250,000 options granted under September 30, 1996
employment agreement (see discussion below).
EMPLOYMENT AGREEMENTSagreement.
Employment Agreements
Mr. Hupp's original employment agreement dated June 1, 1995
was amended on September 30, 1996.1996 and then amended and restated
on October 1, 1998. The new employment agreement provides for
compensation of $110,000 per year and standard employee benefits
during the employment term expiring September 30, 2001. In
addition, Mr. Hupp or his successors will receive salary and
benefits for a lump sum
payment equal to 90 days salarytwelve-month period upon total death or disability
of Mr. Hupp or if the Agreement is terminated byCompany terminates the CompanyAgreement without
cause. Under terms of the Agreement, Mr. Hupp will devote his
best efforts to the performance of his duties, and agrees to
certain restrictions related to participation in activities felt
to conflict with the best interests of the Company.
In additionOn January 13, 2000, the Board of Directors agreed to cash compensation,amend
Mr. Hupp's employment agreement also
provides for an incentiveto reduce his current number of
stock options from 250,000 to 207,500, to grant him 40,000 new
stock options at the fair market value of $1.37, and to offer him
the option of a non-interest bearing loan to purchase 250,000 shares of common
stock ofthese
options in the Company, par value one cent per share at the option price of $1.22
per share. 50,000 shares are exercisable per year commencing September 30, 1997.
The agreement also outlines the exercise of options upon termination of
employment and death. The incentive stock optionsevent that were awarded as part of
Mr. Hupp's previous employment agreement were cancelled.
A similar employment agreement was made with Erlan Sagadiev. The new
employment agreement provides for compensation and standard employee benefits
during the employment term, and a lump sum payment equal to 90 days salary if
the Agreementhe is terminated by the Company without cause.
Under termsCompensation of the
Agreement, Mr. Sagadiev will devote his best efforts to the performance of his
duties, and agrees to certain restrictions related to participation in
activities felt to conflict with the best interests of the Company.
In addition to cash compensation, Mr. Sagadiev's employment agreement
also provides for an incentive stock option to purchase 250,000 shares of common
stock of the Company, par value one cent per share at the option price of $1.22
per share. 50,000 shares are exercisable per year commencing September 30, 1997.
The agreement also outlines the exercise of options upon termination of
employment and death.
COMPENSATION OF DIRECTORSDirectors
No director who is also an employee of the Company received
any separateadditional compensation for services as a director.
The non-employee directors of the Company include Messrs.
Hauser and Schnobrich. During fiscal 19961999, non-employee directors
received no cash compensation for their services as a director or
committee member. Non-employee
directors receive stock options as described belowHowever, they each received 5,000 shares of the
Company's Common Stock under "1993the terms of the 1997 Outside
DirectorsDirector's Stock Option Plan."Plan for their services during 1999.
These options were issued at an exercise price of $3 per share
which was the market price on the date of the grant. Mr.
Schnobrich is an attorney with Popham, Haik, SchnobrichHinshaw & Kaufman, Ltd.,Culbertson, which serves
as counsel for the Company and which receives payment of legal
fees for such services.
Non-employee directorsIt is the Company's intention to issue to each receiveoutside
director an automatic grant of options to
purchase 1,667option for 5,000 shares of the Company's Common Stock
each year under terms of the 1997 Outside Director's Stock Option
Plan upon their election to the Board at the Company's annual
meeting. The option will vest equally over the calendar year.
Options granted under the Developed
Technology Resource, Inc. 19931997 Outside Directors Stock
Option Plan (the "1993
Plan"), which was approved by the Company's shareholders at the Annual Meeting
held on March 8, 1994.
The 1993 Plan provides for the grant of stock options under a
predetermined formula only to directors who are not employees of the Company.
Options granted under the 1993 Plan are not intended to and do not qualify as incentive
stock options as described in Section 422 of the Internal Revenue
Code.
Options which expire, or are canceled or terminated without having been
exercised, may be regranted to other outside directors under the 1993 Plan. When
an outside director is appointed, elected, or re-elected to the Board, that
person will be granted options for 1,667 shares under the 1993 Plan, effective
on their next anniversary as a director at an exercise price equal to the fair
market value on the date of grant. Options granted under the 1993 Plan first
become exercisable one year and one day after the date of grant. If a person
ceases to be a director, other than by removal for cause, for three months
thereafter that person may exercise only that portion of the outstanding options
that are exercisable at the time when that person ceases to be a director. If an
outside director is removed for cause, all outstanding options granted to that
person under the 1993 Plan immediately lapse.
On April 23, 1996, Messrs. Schnobrich and Hauser were each granted
three-year options for the purchase of 1,667 shares of the Company's Common
Stock at an exercise price of $1.00 per share.
It is the Company's intention to issue to each outside director an
option for 1,667 shares of the Company's Common Stock under terms of the 1993
Outside Director's Stock Option Plan on election to the Board for the Company's
1997 annual meeting.
APPROVALRELATIONSHIP OF THE AMENDMENT TO THE 1992 STOCK OPTION PLAN
The Developed Technology Resource, Inc. 1992 Stock Option Plan (the
"1992 Plan"), which was approved by the Board of Directors effective August 5,
1992 and by the Company's shareholders on March 15, 1993, provides for the grant
of options to purchase shares of the Company's Common Stock to employees and any
other persons providing services to the Company. The Board of Directors has
determined that outside directors who are eligible to participate under the 1993
Plan are not eligible to receive options under the 1992 Plan. A total of 66,667
shares (after adjustment for split) of Common Stock were reserved for issuance
under the 1992 Plan. Presently, 833 shares (after adjustment for split) have
been acquired on exercise of options, and options for 42,416 shares (after
adjustment for split) are outstanding.
On September 30, 1996, the board amended the plan, subject to
shareholder approval, to increase the number of reserved shares to 600,000 so
that substantial options may be granted to retain the services of and to provide
adequate incentives to key executives following the restructuring of the
Company. Coinciding with this amendment, Messrs. Hupp and Sagadiev were granted
250,000 options each. Options granted under the 1992 Plan may be either
"incentive stock options" (as defined under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code")) or "non-qualified stock options" (options
which do not qualify for special tax treatment). Only employees of the Company
are eligible to receive incentive stock options under the 1992 Plan.
The 1992 Plan as amended September 30, 1996, is administered by the
Board of Directors of the Company, which designates the type of option to be
granted, the number of options to be granted, the number of shares of Common
Stock to be covered by each option (subject to a specified maximum number of
shares of Common Stock which may be purchased under all options granted), the
exercise price, the method of payment, the exercise period (up to ten years) and
certain other terms. The exercise price for an incentive stock option may not be
less than the fair market value, at the time the option is granted, of the stock
subject to the option. The exercise price for an incentive stock option granted
to any individual who owns stock, at the time of grant, possessing more than 10%
of the voting power of the capital stock of the Company may not be less than
110% of such fair market value on the date of grant. No more than $100,000 of
stock vesting during any calendar year will qualify for incentive stock option
treatment. The exercise price for non-qualified options may not be less than 85%
of the fair market value of the Company's Common Stock on the date of grant.
Options granted under the 1992 Plan may be exercisable at such times as are
determined by the Board of Directors or the committee. Options are
nontransferable, other than by will or the laws of descent and distribution, and
may be exercised only by the optionee while employed by the Company or within
three months after termination of employment by resignation or one year
following termination of employment resulting from death or disability. Options
expire no later than ten years from the date of grant, provided that incentive
stock options granted to employees owning stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company expire five
or fewer years from the date of grant.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE PROPOSAL TO
APPROVE THE AMENDMENT TO THE 1992 STOCK OPTION AGREEMENT.
RELATIONSHIP OFINDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors selects the independent certified
public accountants for the Company each year. Lurie, Besikof, Lapidus & Co.,The Board of
Directors selected the firm of KPMG LLP auditedto audit the Company's
consolidated financial statements for the fiscal year ended OctoberDecember 31,
1996.1999 and 2000.
Representatives of Lurie, Besikof, Lapidus & Co,KPMG LLP will attend the Annual Meeting,
may make a statement if they so desire, and will be available to
respond to appropriate questions. If possible, such questions
should be submitted in writing to the Company at least 10 days
prior to the Annual Meeting, at 12800 Whitewater Drive,7300 Metro Blvd, Suite 170, Minnetonka,550,
Edina, Minnesota 55343,55439, Attention: Mr. John P. Hupp, President.
On April 23, 1996, Price Waterhouse,October 21, 1999, Developed Technology Resource, Inc.
dismissed Deloitte & Touche LLP, ("PW") the independent
accountant who was previously engaged as the principal accountant
previously engaged to audit the Company'sregistrant's consolidated
financial statements declined to stand for re-election. PW's reportsthe year ended December 31, 1998, the
two-month transition period ended December 31, 1997 and the
fiscal year ended October 31, 1997, as its independent certified
public accountant. Deloitte & Touche LLP's report on the
financial statements for the past two years doyear ended December 31, 1998 and the
two-month transition period ended December 31, 1997 contained a
paragraph expressing doubt over the Company's ability to continue
as a going concern but was not modified as to audit scope or
accounting principles. Deloitte & Touche LLP's report on the
financial statements for the fiscal year ended October 31, 1997
does not contain an adverse opinion or disclaimer of opinion, and
arewas not modified as to uncertainty, audit scope, or accounting
principles. In connection with its auditsthe audit for the two most
recent fiscal yearsyear
ended October 31, 1997 and through April 23, 1996,October 21, 1999, there have
been no disagreements with PWDeloitte & Touche LLP on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements,
if not resolved to the satisfaction of PWDeloitte & Touche LLP
would have caused them to make reference thereto in their report
on the financial statements for such years. The decision to change
accountants has been approved by the Board of Directors of the Company.period.
On April 23, 1996 Lurie, Besikof, Lapidus & Co.,October 21, 1999, KPMG LLP was appointed as the
Company'sregistrant's new independent accountant to audit the Company'sregistrant's
consolidated financial statements. During the two most recentpast fiscal yearsyear
and through April 23, 1996,October 21, 1999, the Companyregistrant has not, prior to
engaging the new accountant, consulted the new accountant
regarding the application of accounting principles to a specific
completed or contemplated transaction or regarding the type of audit
opinion that might be rendered on the Company'sregistrant's consolidated
financial statementsstatements.
OTHER BUSINESS
Management knows of no other matters that will be presented
for consideration at the meeting. If any other matter properly
comes before the meeting, proxies will be voted in accordance
with the best judgment of the person or persons acting under
them.
PROPOSALS FOR 19982000 ANNUAL MEETING
Shareholders who intend to submit proposals for inclusion in
the Company's 19982001 Proxy Statement and Proxy for shareholder
action at the 19982001 Annual Meeting must do so by sending the
proposal and supporting statements, if any, to the Company at its
corporate offices no later than December 24, 1997.February 26, 2001.
By Order of the Board of Directors
John P. Hupp
PRESIDENT AND SECRETARY
March 17, 1997/s/ LeAnn H. Davis
LeAnn H. Davis
Chief Financial Officer and
Secretary
April 27, 2000
DEVELOPED TECHNOLOGY RESOURCE, INC.
ANNUAL MEETING OF SHAREHOLDERSAnnual Meeting of Shareholders - APRIL 24, 1997June 27, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John P. Hupp or his
appointee as proxy of the undersigned, with full power of
substitution, for and in the name of the undersigned, to
represent the undersigned at the Annual Meeting of Shareholders
of Developed Technology Resource, Inc., to be held at 2501 Wayzatathe One
Corporate Center, 7300 Metro Boulevard, Minneapolis,Suite 160, Edina,
Minnesota 5540555439 at 4:10:00 p.m.a.m. CDT on Thursday, April 24,
1997,Tuesday, June 27, 2000, and
at any adjournments thereof, and to vote all shares of stock of
said Company standing in the name of the undersigned, as
designated below, with all the powers which the undersigned would
possess if personally at such meetings.
1. Election of Directors duly nominated: Peter L. Hauser, John
P. Hupp, and Roger W. Schnobrich.
_______ FOR _______ WITHHELD FOR ALL _______ WITHHELD FOR
THE FOLLOWING ONLY
(Write the nominee's name in space below):
- --------------------------------------------------------------------------------
2. ApprovalRatification of the Amendment toappointment of KPMG LLP as independent
auditors for the 1992 Stock Option Plan.current fiscal year.
_______ FOR _______ AGAINST
- --------------------------------------------------------------------------------
3. The authority of Directors to vote, in their discretion, on
all other business that may properly come before the meeting.
_______ GRANTED _______ WITHHELD
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
GIVEN FOR VOTING ON THE MATTERS ABOVE, THIS PROXY WILL BE VOTED
FOR item 1, electing all duly nominated Directors as listed, voted FOR
item 2, approving the amendment,ratifying independent auditors, and GRANTED for item 3,2,
granting the Directors authority to vote in their discretion on
all other business coming before the meeting. Shareholders who
are present at the meeting may withdraw their Proxy and vote in
person if they so desire. The undersigned has received the proxy
statement dated February 26,
1997.April 27, 2000.
Dated _____________, 1997 ___________________________ ______________________2000 ______________ ________________
Signature Print Name
Dated _____________, 1997 ___________________________ ______________________2000 ______________ _______________
Signature Print Name
Please sign exactly as name(s) appear(s) on this Proxy. If
shares are registered in more than one name, the signatures of
all persons are required. A corporation should sign in its full
corporate name by a duly authorized officer, stating their title.
Trustees, guardians, executors and administrators should sign in
their official capacity, giving their full title as such. If a
partnership, please sign in partnership name by authorized
person.
Please check as appropriate:
___ I DO plan on attending the Annual Meeting of
Shareholders.
___ I DO NOT plan on attending the Annual Meeting of
Shareholders.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY
NO POSTAGE IS REQUIRED IF RETURNED IN THE ENCLOSED ENVELOPE.
THIS PROXY MAY ALSO BE RETURNED VIA FACSIMILE TO 612/938-2319.This Proxy may also be returned via facsimile to (952) 820-0011.