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
- --------------------------------------------------------------------------------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.
                   7300 METRO BLVD.Metro Blvd., SUITESuite 550
                     EDINA, MINNESOTAEdina, Minnesota  55439
                       (PH: 612-820-0022)
                              ---------------------(ph: 952-820-0022)
                      _____________________

            NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                    TO BE HELD APRIL 14, 1998To 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  Tuesday,  April 14,
1998,June  27,  2000, at 3:30 p.m. CST,10:00  a.m.  CDT,  at  the  Minneapolis Athletic Club, 615 Second Avenue
South, Minneapolis,One
Corporate  Center,  7300  Metro  Boulevard,  Suite  160,   Edina,
Minnesota 55402,55439, for the following purposes:

1.   To elect three directors of the Company.

2.       To2.To ratify the appointment of Deloitte & ToucheKPMG 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
February 13,
1998,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

                              /s/ LeAnn H. Davis
                              LeAnn H. Davis
                              Secretary and Chief Financial
Officer
Edina, Minnesota U.S.A.
March 17, 1998April 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.

                 PLEASE MAIL YOUR PROXY PROMPTLY


               DEVELOPED TECHNOLOGY RESOURCE, INC.
                   7300 METRO BLVD.Metro Blvd., SUITESuite 550
                     EDINA, MINNESOTAEdina, Minnesota  55439
                    TELEPHONE (612)Telephone (952) 820-0022
                      ---------------------_____________________

                         PROXY STATEMENT
             FOR THE ANNUAL MEETING OF SHAREHOLDERS
                                 APRIL 14, 1998
                              ---------------------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 Tuesday, April 14, 1998,June 27, 2000,  at
3:30 p.m. CST,10:00   a.m.  CDT,  at  the  Minneapolis Athletic Club,
615 Second Avenue South, Minneapolis,One  Corporate  Center,  7300  Metro
Boulevard,  Suite  160,  Edina,  Minnesota  55402,55439,  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 17, 1998.May 26, 2000.

      The  Company  will  be  providing without  charge  to  each
stockholder a copy of Form 10-KSB for the fiscal year ended OctoberDecember 31,
1997,1999, 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 February 13, 1998,April 27, 2000,  there  were
outstanding  805,820930,820 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

      The  following table contains information as of  February 13, 1998,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 February 13, 1998,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.

                               AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL OWNER   OF BENEFICIAL OWNER   PERCENTAGE OWNED(A)
- ------------------------------------   -------------------   -----------------Amount and Nature
     Name and Address of      of Beneficial Owner    Percentage
      Beneficial Owner                                    Owned(A)
 Vladimir Drits                   71,33571,835 (1)       7.6%6.5%
 11901 Meadow Lane West
 Minnetonka, MN  55305

 Erlan Sagadiev                  55,000130,000 (2)       5.8%11.8%
 7300 Metro Blvd, Suite 550
 Edina, MN  55439


 Roger W. Schnobrich (B)           30,700 (3)35,700(3)        3.3%
 222 South Ninth Street
 Suite 3200
 Minneapolis, MN  55402

 John P. Hupp (B, C)                       55,500(B), (C)           148,800 (4)       5.9%13.5%
 7300 Metro Blvd, Suite 550
 Edina, MN  55439

 Peter L. Hauser (B)              47,73641,000 (5)        5.1%3.7%
 2820 IDS Tower
 Minneapolis, MN  55402

 Beneficial Owners of 5% or      427,335           38.8%
 more,         260,271                 27.5% Officers and
 Directors as a group

 All current directors and       225,500           20.5%
 officers       133,936                 14.2% as a group
 (4(3 people)

(A) The total number of shares 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 944,3201,100,320 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)  Includes  23,335 shares of Common Stock gifted by Mr.  Drits
     to his spouse and children.

(2)  Includes  presently exercisable options90,000  shares held by DTR as collateral  for  Mr.
     Sagadiev's $82,500 loan outstanding on the balance owed for his
     purchase of 55,000125,000 shares at $1.22 per share issued under terms of the 1992 Stock Option
         Plan as Amended September 30, 1996.share.

(3)  Includes  presently exercisable options for the purchase  of
     15,000 shares at $1.50 per share.share and 5,000 shares at $3.00 issued
     under the terms of the 1997 Outside Directors Stock Option Plan.

(4)  Includes  presently exercisable options for the purchase  of
     55,000124,500 shares at $1.22 per share issued under terms of the 1992 Stock Option
         Plan as Amended September 30, 1996.and 20,000 shares at $1.37 per
     share.

(5)  Includes  4,2366,000  shares held in IRA for the benefit  of  Mr.
     Hauser.  Includes presently exercisable warrantsoptions for the purchase
     of  13,5005,000 shares at $18 per share$3.00 issued in 1993 under the terms of the Company's
         initial public offering.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
Directors  named  below.  Each of the  nominees  is  currently  a
director of the Company whose current term expires at the 1998  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.

OFFICERS AND DIRECTORSOfficers and Directors

The following table sets forth the current and proposed directors
and executive officers of the Company, their ages and positions
with the companyCompany as of February 13, 1998:


              NAME                        AGE               POSITION
              ----                        ---               --------April 27, 2000:


          Name                Age            Position

 Peter L. Hauser(1)(2)        5659       Director

 Roger W.                     70       Director
 Schnobrich(1)(2)              68             Director

 John P. Hupp                 3840       Director,
                                       President, CEO

 LeAnn H. Davis               2830       Chief Financial
                                       Officer, Corporate
                                       Secretary

(1)  Member of the Compensation Committee.

(2)  Member of the Audit Committee.


      


         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  1999 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
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 from
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  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 intensive language  training
from the Leningrad State University in St. Petersburg, Russia.

      LeAnn  H.  Davis, CPA was employed by the  Company  as  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  worked aswas CFO of  Galaxy  Foods  Company  in
Orlando, Florida from December 1995 to June 1997.  From  1994  to
1995,  she  was a senior auditor for Coopers and Lybrand  LLP  in
Orlando, FL.  From 1992 to 1994, she worked for the local  public
accounting  firm of Pricher and Company in Orlando  as  a  senior
auditor and tax accountant.  Prior to 1992, Ms. Davis worked  for
Arthur Andersen LLP as a staff auditor.  Ms. Davis earnedobtained a  BS
in Business Administration and 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  a  successor is elected, or until the  earlier  of
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 19971999
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 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 1997,1999,
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 four
times during fiscal 1997.


CERTAIN TRANSACTIONS1999.

Certain Transactions

     The law firm of Hinshaw & Culbertson provides legal services
to  the Company.  Roger Schnobrich, a director of the Company, is
a partner 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 upon the Company's review of the copies of such forms
it has received from certain reporting persons that they were not
required  to file Forms 5 furnishedfor the year ended December  31,  1999,
the   Company  believes  that  all  of  its  executive  officers,
directors  and  greater than 10% beneficial owners complied  with
all  filing  requirements  applicable to  the Companythem  with  respect  to
its fiscal year ended October 31, 1997, each of the following
directors, officers or beneficial owners of more than 10 percent of the
Company's Common Stock filed a Form 5 reporting previously unreported
transactions which were reportable, or previously unreported holdings which
became reportable, during such fiscal year: LeAnn H. Davis. This officer
reported the holdings which became reportable on or before December 15, 1997.1999.




        COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

      The  following  table  sets  forth  the  cash  and  noncash
compensation for fiscal years ended December 31, 1999 and 1998, the two-
month  transition period ended December 31, 1997,  1996, and  1995the  year
ended  October  31,  1997  awarded to  or  earned  by  the  Chief
Executive Officer:

                   


                           SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG-TERM OTHER ANNUAL COMPENSATION FISCAL YEAR SALARY BONUS COMPENSATION AWARDS/OPTIONS NAME AND PRINCIPAL POSITION ENDED ($) ($) ($) (#) - --------------------------- ----- -------- ----- ------------ -------------- John P. Hupp, President(1) 1997 $87,500Summary Compensation Table Annual Compensation Long-Term Other Compensation Fiscal Salary Bonus Annual Awards/Options Name and Principal Year ($) 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 0 1996 $75,000 none none 250,000(3) 1995 $65,967 none none 8,333(2)
(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, upon assuming the position of President, his salary was increased to $6,250 per month. Effective January 1997, his salary was increased to $7,500 per month; and effective October 1998, his salary was increased to $9,167 per month. (2) Mr. Hupp was issued an option forIn 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 was approved by the shareholders at the 1996 Annual Meeting. AGGREGATED OPTION EXERCISES: LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUESExercises: Last Fiscal Year and Fiscal Year-End Option Values The following table summarizes for the named executive officers the number of stock options exercised during the fiscal year ended OctoberDecember 31, 1997,1999, the aggregate dollar value realized upon exercise, the total number of unexercised options held at OctoberDecember 31, 19971999 and the aggregate dollar value of in-the-money unexercised options held at OctoberDecember 31, 1997.1999. 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, 19971999 which was $2$1.125 per share. AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND FISCAL YEAR-END OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT NAME AND OCTOBER 31, 1997 (#) OCTOBER 31, 1997 ($) PRINCIPAL SHARES ACQUIRED VALUE -------------------- -------------------- POSITION ON 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. None None 150,000 100,000 $0 $0 Hupp(1), None None 55,000 200,000 $39,000 $156,000 President,
CEO (1) Includes 250,000 options granted under September 30, 1996 employment agreement. EMPLOYMENT AGREEMENTSEmployment 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 Company without cause terminates the Agreement.Agreement 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 sharesthese options in the event that he is terminated without cause. Compensation 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. The incentive stock options that were awarded as part of Mr. Hupp's previous employment agreement were cancelled. 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 19971999, non-employee directors received no cash compensation for their services as a director or committee member. However, they each received 5,000 shares of the Company's Common Stock under the terms of the 1997 Outside Director's Stock Option 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 Hinshaw & Culbertson, which serves as counsel for the Company and which receives payment of legal fees for such services. On November 6, 1997, the Board of Directors adopted a new stock option plan for outside directors, superseding the then existing stock option plan. At the same time the Board, in exchange for the surrender of all stock options previously granted to the outside directors for their services as directors, granted to the each outside director stock options for the purchase of 15,000 shares of common stock at a price of $1.50 per share, with 13,750 of the options vested as of November 6, 1997, and 1,250 of the options to vest on December 31, 1997. It is the Company's intention to issue to each outside director an option for 5,000 shares of the Company's Common Stock each year under terms of the 1997 Outside Director's Stock Option Plan onupon their election to the Board forat the Company's 1998 annual meeting. The option will vest at 1,250 shares onequally over the date of the grant and each quarter thereafter.calendar year. Options granted under the 1997 Outside Directors Stock Option Plan are not intended to and do not qualify as incentive stock options as described in Section 422 of the Internal Revenue Code. RELATIONSHIP OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors selects the independent certified public accountants for the Company each year. The Board of Directors selected the firm of Deloitte & ToucheKPMG LLP to audit the Company's consolidated financial statements for the fiscal year ended OctoberDecember 31, 1997.1999 and 2000. Representatives of Deloitte & ToucheKPMG 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 7300 Metro Blvd, Suite 550, Edina, Minnesota 55439, Attention: Mr. John P. Hupp, President. On December 23, 1997,October 21, 1999, Developed Technology Resource, Inc. dismissed Deloitte & Touche LLP, the Board of Directors dismissed the firm of Lurie, Besikof, Lapidus & Co., LLP (hereinafter "Lurie, Besikof") as the independentprincipal accountant previously engaged to audit the Company'sregistrant's consolidated financial statements. Lurie, Besikof'sstatements for the 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 year 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 iswas not modified as to uncertainty, audit scope, or accounting principles. In connection with itsthe audit for the most recent fiscal yearsyear ended October 31, 1997 and through December 23, 1997,October 21, 1999, there have been no disagreements with Lurie, BesikofDeloitte & 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 Lurie, BesikofDeloitte & Touche LLP would have caused them to make reference thereto in their report on the financial statements for such years.period. On December 23, 1997, Deloitte & ToucheOctober 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 December 23, 1997,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 statements. 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 19992000 ANNUAL MEETING Shareholders who intend to submit proposals for inclusion in the Company's 19992001 Proxy Statement and Proxy for shareholder action at the 19992001 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 5, 1998.February 26, 2001. By Order of the Board of Directors /s/ LeAnn H. Davis LeAnn H. Davis CHIEF FINANCIAL OFFICER AND SECRETARY March 17, 1998 Chief Financial Officer and Secretary April 27, 2000 DEVELOPED TECHNOLOGY RESOURCE, INC. ANNUAL MEETING OF SHAREHOLDERSAnnual Meeting of Shareholders - APRIL 14, 1998June 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 the Minneapolis Athletic Club, 615 Second Avenue South, Minneapolis,One Corporate Center, 7300 Metro Boulevard, Suite 160, Edina, Minnesota 5540255439 at 3:30 p.m. CST10:00 a.m. CDT on Tuesday, April 14, 1998,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. Ratification of the appointment of Deloitte & ToucheKPMG LLP as independent auditors for the 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 March 14, 1998.April 27, 2000. Dated ________, 1998 __________________________ _______________________________________, 2000 ______________ ________________ Signature Print Name Dated ________, 1998 __________________________ _______________________________________, 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 TOThis Proxy may also be returned via facsimile to (952) 820-0011.