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
Filed by the registrant [X] Filed by party other than the
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
LIFESTREAM TECHNOLOGIES, INC.
(Name of Registrant as Specified in Its Charter)
LIFESTREAM TECHNOLOGIES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6j(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(45) and
0-11
[X] No fee required
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[ ] 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) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
LIFESTREAM TECHNOLOGIES, INC.
510 Clearwater Loop, Suite 101
Post Falls, ID 83854
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 15, 2000
To our Stockholders:
You are cordially invited to attend the 2000 Annual Meeting ("Annual
Meeting") of Stockholders of Lifestream Technologies, Inc., a Nevada corporation
(the "Company"), which will be held at Templin's Resort located at 414 East
First Avenue, Post Falls, Idaho, on December 15, 2000 at 8:30 a.m. Pacific Time,
or at any and all adjournments thereof, for the following purposes:
1. To elect to the Board three (3) directors for terms expiring in 2002;
2. To consider and vote upon a proposal to ratify the appointment of BDO
Seidman LLP as independent public accountants for the Company for the
fiscal year ending June 30, 2001; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
These matters are more fully discussed in the Proxy Statement
accompanying this Notice.
The Board of Directors has fixed the close of business on October 20,
2000 as the record date for determining those stockholders who will be entitled
to notice of, and to vote at, the meeting. The stock transfer books will not be
closed between the record date and the date of the meeting.
Representation of at least a majority of the shares of Common Stock of
the Company entitled to vote, whether present in person or represented by proxy,
is required to constitute a quorum. Accordingly, it is important that your
shares be represented at the meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN
THE ENCLOSED ENVELOPE. Your proxy may be revoked at any time prior to the time
it is voted.
The financial statements of the Company for the fiscal year ended June
30, 2000 are contained in the accompanying Annual Report on Form 10-KSB. The
Annual Report does not form any part of the material for the solicitation of
proxies.
Please read the proxy materials carefully. Your vote is important and
the Company appreciates your cooperation in considering and acting on the
matters presented.
Very truly yours,
/s/ Christopher Maus
--------------------------------------------
Christopher Maus, Chairman of the Board of
Directors, President and Chief Executive Officer
Post Falls, Idaho
October 27, 2000
2
Stockholders Should Read The Entire Proxy Statement
Carefully Prior To Returning Their Proxies
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS OF
LIFESTREAM TECHNOLOGIES, INC.
To Be Held December 15, 2000
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Lifestream Technologies, Inc., a Nevada corporation
(the "Company"), of proxies to be voted at the 2000 Annual Meeting of
Stockholders ("Annual Meeting") to be held at Templin's Resort located at 414
East First Avenue, Post Falls, Idaho, on December 15, 2000, at 8:30 a.m.,
Pacific Time, or at any and all adjournments thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders. The cost of this
solicitation will be borne by the Company. Proxies will be solicited principally
through the use of the mails, but, if deemed desirable, may be solicited
personally or by telephone, email, telegraph, or personal interview by
directors, officers and employees of the Company for no additional compensation.
Arrangements may be made with brokerage houses and other custodians, nominees
and fiduciaries to send proxies and proxy material to the beneficial owners of
the Company's Common Stock, and such persons may be reimbursed for their
expenses. The Annual Report on Form 10-KSB of the Company for the fiscal year
ended June 30, 2000 ("Fiscal 2000") is being mailed together with this Proxy
Statement and form of Proxy. This Proxy Statement and the proxy card were first
mailed to stockholders on or about November 6, 2000.
VOTING RIGHTS AND SOLICITATION
The close of business on October 20, 2000 was the record date for
stockholders entitled to notice of, and to vote at, the Annual Meeting. As of
that date, approximately 19,553,156 shares of the Company's common stock, $.001
par value per share (the "Common Stock"), were issued and outstanding. All of
the shares of the Company's Common Stock outstanding on the record date are
entitled to vote at the Annual Meeting, and stockholders of record entitled to
vote at the Annual Meeting will have one (1) vote for each share so held on the
matters to be voted upon.
Shares of the Company's Common Stock represented by proxies in the
accompanying form that are properly executed and returned to the Company will be
voted at the Annual Meeting of Stockholders in accordance with the stockholders'
instructions contained therein. In the absence of contrary instructions, shares
represented by such proxies will be voted FOR the election of the directors as
described under "Proposal 1---Election of Directors and FOR ratification of the
appointment of accountants as described herein under "Proposal 2---Ratification
of Appointment of Independent Public Accountants." Management does not know of
any matters to be presented at the Annual Meeting other than those set forth in
this Proxy Statement and the Notice accompanying this Proxy Statement. If other
matters should properly come before the Annual Meeting, the proxy holders will
vote on such matters in accordance with their best judgment. Any stockholder has
the right to revoke his or her proxy at any time before it is voted by (i)
delivering to the Company at its principal executive offices at 510 Clearwater
Loop, Suite 101, Post Falls, Idaho 83854, Attn: Chief Financial Officer, a
written notice of revocation or duly executed proxy bearing a later date, or
(ii) attending the Annual Meeting and voting in person.
The quorum necessary to conduct business at the Annual Meeting consists
of a majority of the outstanding Common Stock of the Company as of the record
date. Approval of Proposals 1 and 2 shall each be determined by a majority of
the votes cast by the stockholders entitled to vote at the election present in
person or represented by proxy. Abstentions and broker non-votes are each
included in the determination of the number of shares present for quorum
purposes but have no effect for Proposals 1 and 2.
3
PROPOSAL 1
ELECTION OF DIRECTORS
The five members of the Company's Board of Directors are classified
into two classes, one of which is elected at each Annual Meeting of Stockholders
to hold office for a two-year term and until successors of such class have been
elected and qualified or until the death, resignation or removal of such
director. The nominees for the Board of Directors are set forth below. The proxy
holders intend to vote all proxies received by them in the accompanying form for
the nominees for director listed below. In the event that any other director is
unable or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any nominee who shall be designated by the present
Board of Directors to fill the vacancy. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them for any nominee listed below. As of the date of this
Proxy Statement, the Board of Directors is not aware that any nominee is unable
or will decline to serve as a director.
The Company's Board of Directors recommends that stockholders vote FOR
the nominees listed below.
Nominees to Board of Directors
Class and Year
Director In Which Term
Name Principal Occupation(s) Since Will Expire Age
- ---- ----------------------- ----- ----------- ---
Christopher Maus Chairman of the Board, 1994 Class I, 47
President and Chief Executive 2002
Officer
Michael Crane Chairman of the Dulles 1998 Class I, 45
Greenway, Trip II (Toll 2002
Investors Partnership II, L.P.),
President of Alchemy International
David Hurley Chief Executive Officer of 2000 Class I 41
The New Health Exchange 2002
Christopher Maus has served as the Company's Chief Executive Officer,
President and Chairman of the Board of Directors since its legal reorganization
in February of 1994, except for the period from September 1998 to March 2000
when he served only as Chairman of the Board. From 1989 to 1994, Mr. Maus was a
general partner in Lifestream Development Partnership and President of
Lifestream Diagnostics, Inc., the Company's predecessors. From June 1996 to
September 1999, Mr. Maus was a founder and stockholder of Secured Interactive
Technologies, Inc., developer of the PrivalinkTM System, which was acquired by
the Company Lifestream in a merger on September 1, 1999. Mr. Maus attended North
Texas State University.
Michael Crane has served as a Director on the Company's Board of
Directors since April 1998. Since 1994, Mr. Crane has served as Chairman of the
Dulles Greenway, Trip II (Toll Investors Partnership II, L.P.), a privately held
company, and President of Alchemy International, a privately held company
devoted to solving cancer through passive chemistry. Mr. Crane also serves as a
Director on the Board of Directors of Discflo Corporation, a privately held
company. Mr. Crane has a Bachelor of Science degree in Banking from the
University of Richmond
David Hurley was nominated to the Company's Board of Directors on
September 30, 2000. Recently, Mr. Hurley became Chief Executive Officer of The
New Health Exchange, an electronic source for healthcare product and contract
information, a privately held company. From January 1999 to May 2000, Mr. Hurley
was President, Chief Executive Officer and Board member of Geneva
Pharmaceuticals Inc., a subsidiary of Novartis Corporation, a publicly held
company. From November 1994 to January 1999, Mr. Hurley was President, Chief
Executive Officer and Board Member of Norvartis Nutrition, a subsidiary of
Novartis Corporation. Mr. Hurley has a Masters degree in International
Management from the American Graduate School of International Management and a
Bachelor of Arts in General Studies from the University of Iowa.
4
Directors Not Standing For Election
The members of the Board of Directors who are not currently standing
for election at this year's Annual Meeting are set forth below:
Class and Year
Director In Which Term
Name Principal Occupation(s) Since Will Expire Age
- ---- ----------------------- ------------------ -------------- ------
Robert Boyle Secretary and Treasurer of 1999 Class II, 54
the Company; Certified 2001
Public Accountant
William Gridley Retired Corporate Executive 1997 Class II, 71
2001
Robert Boyle has served as a Director on the Board of Directors of the
Company since June 1999, at which time he also became the Company's Secretary
and Treasurer. Since 1995, Mr. Boyle has served as president of Robert Boyle,
CPA, a public accounting firm. From 1980 to 1995, Mr. Boyle served as President
of Boyle and Stoyle, Certified Public Accountants, specializing in the areas of
taxation and business acquisitions and sales. Prior thereto, Mr. Boyle served as
both an independent consultant and as a tax manager and auditor with a
predecessor to KPMG Peat Marwick. Mr. Boyle has a Bachelor of Arts degree in
accounting from San Diego State University.
William Gridley has served as a Director on the Board of Directors of
the Company since April 1997. Since 1997, Mr. Gridley has served as the Chairman
of the Board of Directors of Hymedix Inc., a privately held polymer chemicals
company. Mr. Gridley served as President and Chief Executive Officer of Hymedix,
Inc. Since 1980, Mr. Gridley has served as the Vice Chairman and Chairman of the
Finance Committee at Tuskegee University. Mr. Gridley has a Bachelor of Arts
degree from Yale University.
5
MANAGEMENT
Directors and Executive Officers of the Company
The directors and executive officers of the Company are set forth below:
Name Age Positions Held
- ---- --- --------------
Christopher Maus 47 Chief Executive Officer, President
and Chairman of the Board
Robert Boyle 54 Director, Secretary and Treasurer
Michael Crane 45 Director
William Gridley 71 Director
David Hurley 41 Director
Edward Siemens 46 Chief Operating Officer - Devices
Douglas Robinson 42 Chief Operating Officer - The
Data Concern
Brett Sweezy 35 Chief Financial Officer
Ken Clegg 31 Chief Technology Officer
Brian Packard 30 Vice President - Business
Development
Paul Beatty 53 Vice President - Consumer Sales
Edward Kalin 52 Vice President - Professional Sales
Jackson Connolly 51 Vice President - Operations
Edward Siemens has served as Chief Operating Officer - Devices since
joining the Company in August 2000. From April 1999 to June 2000, Mr. Siemens
served as President of Omron Healthcare, Inc., a publicly held manufacturer and
marketer of home-use digital blood pressure monitors and home medical diagnostic
products. From 1994 to 1999, Mr. Siemens served as Senior Vice President, Sales
and Marketing of Omron Healthcare, Inc. Mr. Siemens has a Masters degree in
Business Administration from Pepperdine University and a Bachelor of Fine Arts
from California College of Arts and Crafts.
Douglas Robinson has served as Chief Operating Officer - The Data
Concern since joining the Company in September 2000. From 1996 to September
2000, Mr. Robinson served as Vice President of Sales and Marketing for Source
Information Management Co/Myco, Inc., where he was responsible for developing a
sustainable business base in the point-of-purchase segment. From 1991 to 1996,
Mr. Robinson served in various positions at Newell Company (NewellRubbermaid), a
three billion dollar publicly held manufacturer and marketer of consumer
products. Mr. Robinson has a Bachelor of Science degree in Construction
Management from Washington State University.
Brett Sweezy, a Certified Public Accountant, has served as Chief
Financial Officer since joining the Company in June 1999. From June 1996 to
September 1999, Mr. Sweezy served as Chief Financial Officer and Treasurer of
Secured Interactive Technologies, Inc. From 1994 to August 2000, Mr. Sweezy was
also President of Brett R. Sweezy, CPA, PA, a public accounting firm. Mr. Sweezy
has a Bachelor of Science degree in Economics and Business from the New England
College.
6
Ken Clegg has served as Chief Technology Officer since joining the
Company in July 1998. Previous to 1998, Mr. Clegg ran two Internet companies and
a computer manufacturing firm. In recent years, Mr. Clegg has sat on several
advisory boards and software development committees and served as a computer and
software consultant Mr. Clegg has a Bachelor of Science degree, with majors in
Computer Science, Mathematics, and Education from the Whitworth College.
Brian Packard has served as Vice President - Business Development since
joining the Company in September 2000. From August 1999 to September 2000, Mr.
Packard served as Market Development Manager for the New Ventures Division of
Agilent Technologies, publicly held company. Mr. Packard was an inaugural member
of Agilent's consumer healthcare initiative and was responsible for conducting
market research to identify unmet health monitoring needs, preparing the
business plan for the launch of a new consumer-focused chronic disease
management service, and developing various outside business partnerships. From
August 1997 to August 1999, Mr. Packard served as Product Manager of the
ThermScan Professional, a division of The Gillette Company, a publicly held
company. Previous to 1997, Mr. Packard served as Assistant Brand Manager for
Bayer Corporation. Mr. Packard has a Masters degree in Business Administration
(Marketing and International Business) and a Bachelor degree in Science/Business
from the University of Notre Dame.
Paul Beatty has served as Vice President - Consumer Sales since joining
the Company in October 2000. From 1994 to September 2000, Mr. Beatty served as
Director of Retail Sales at OPTIVA Corporation, a privately held corporation,
and the makers of the sonicare(R) sonic toothbrush. Mr. Beatty has a Bachelor of
Arts degree in Business and Economics from Central Washington University.
Edward Kalin has served as Vice President - Professional Sales since
joining the Company in June 1998. Previous to 1998, Mr. Kalin served as Regional
Sales Manager - Special Markets for Colgate Oral Pharmaceuticals. Mr. Kalin has
a Bachelor of Science degree in Economics from the University of Maryland.
Jackson Connolly has served as Vice President - Operations for the
Company since January 1998. Upon joining the Company in January 1997, and until
January 1998, Mr. Connelly served as Director of Operations. Previous to 1997,
Mr. Connolly served as Senior Sales Engineer at Advanced Input Devices. Mr.
Connolly has a combined Bachelor of Arts and Science degree in Industrial
Technology and Arts from California State University- Fresno.
There are no family relationships among any of the Company's directors and
executive officers.
7
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of nine meetings
during Fiscal 2000. Each director attended 100% of the meetings.
The Board of Director's Audit Committee is responsible for recommending
to the Board of Directors the appointment of independent public accountants,
reviewing and approving the scope of audit activities of the auditors, reviewing
accounting policies, practices and controls, performing independent director
duties and reviewing audit results. The Audit Committee is currently comprised
of William Gridley (Chairman), Michael Crane and David Hurley. The Audit
Committee met two times during Fiscal 2000. Each member attended 100% of the
meetings.
The Board of Director's Compensation Committee is responsible for
reviewing and recommending to the Board of Directors the compensation structure
for the Company's directors and executive officers, including salary rates,
participation in incentive compensation and benefit plans and other forms of
compensation, and administering the Company's Equity Incentive Plan and Stock
Option Plan. Similarly, the Compensation Committee reviews and approves the
compensation for other management personnel. The Compensation Committee is
currently comprised of Michael Crane (Chairman), Robert Boyle and David Hurley.
The Compensation Committee met three times during Fiscal 2000. Each member
attended 100% of the meetings.
DIRECTOR REMUNERATION
Non-employee members of the Company's Board of Directors receive 2,000
shares of the Company's Common Stock for each month he or she serves as a
director. Employee members of the Company's Board of Directors receive 2,000
shares of the Company's Common Stock for each month he or she serves as a
director, which is in addition to the compensation he or she receives in
connection with their regular employment with the Company. Directors currently
receive no additional compensation for any committee service.
8
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT (1)
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of October 20, 2000 by (i)
each person known by the Company to be the beneficial owner of more than 5% of
the outstanding shares of Common Stock, (ii) each director an nominee for
director, (iii) each officer listed in the Summary Compensation Table of the
section of this Proxy Statement entitled "Executive Compensation" and (iv) all
current directors and executive officers as a group. A person is also deemed to
be a beneficial owner of any securities of which the person has the right to
acquire beneficial ownership within 60 days. All shares are subject to the named
person's sole voting and investment power except where otherwise indicated.
Except as otherwise indicated, the business address for the persons set forth
below is 510 Clearwater Loop, Suite 101, Post Falls, Idaho 83854.
Shares Total
Name and Address Beneficially Option Beneficial Percent of
Of Beneficial Owner Owned Grants Ownership (1) Class (2)
- ------------------- ----- ------ ------------- ---------
Christopher Maus 2,601,950 250,000 2,851,950 (3) 14.59%
Michael Crane 451,527 50,500 502,027 (4) 2.57%
William Gridley 148,000 0 148,000 (5) Less than 1%
Robert Boyle 133,200 25,000 158,200 (6) Less than 1%
David M. Hurley 0 30,000 30,000 (7) Less than 1%
Edward Siemens 0 50,000 50,000 (8) Less than 1%
Douglas Robinson 0 25,000 25,000 (9) Less than 1%
Brett Sweezy 86,139 70,900 157,039 (10) Less than 1%
Ken Clegg 0 47,851 47,851 (11) Less than 1%
Brian Packard 0 25,000 25,000 (12) Less than 1%
Paul Beatty 4,431 37,500 41,931 (13) Less than 1%
Edward Kalin 28,800 56,600 85,400 (14) Less than 1%
Jackson Connolly 41,000 70,303 111,303 (15) Less than 1%
- -----------------------------------------------------------------------------------------------------------
Total of all Officers and Directors 3,495,047 738,154 4,233,901 21.65%
=================================== ========== ======== ========== ======
Other Beneficial Owners
Timothy Mathers 1,500,750 0 1,500,750 7.68%
Mercer Management, Inc. 1,133,926 308,333 1,442,259 7.38%
- --------------------------
(1) Based upon information furnished to the Company by the principal security
holders or obtained from the stock transfer books of the Company. Other
than indicated in the notes, the Company has been informed that such
persons have sole voting and disposition power with respect to their
shares.
9
(2) Based on 19,553,156 shares of Common Stock outstanding as of October 20,
2000.
(3) Mr. Maus is the Chairman of the Board of Directors, President and Chief
Executive Officer of the Company. Includes (i) 200,000 shares of Common
Stock issuable upon the exercise of options granted to Mr. Maus on April
10, 1998 and exercisable for a period of five years thereafter at an
exercise price of $1.25 per share and (ii) 50,000 shares of Common Stock
issuable upon the exercise of options granted to Mr. Maus on January 3,
2000 and exercisable for a period of ten years thereafter at an exercise
price of $1.25 per share. Includes 2,000 shares per month to Directors for
their Board of Directors' duties.
(4) Mr. Crane serves as a director on the Company's Board of Directors.
Includes (i) 25,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Crane on February 28, 2000 and exercisable for a
period of two years thereafter at an exercise price of $2.50 per share and
(ii) 25,500 shares of Common Stock issuable upon the exercise of options
granted to Mr. Crane on October 20, 2000 and exercisable for a period of
two years thereafter at an exercise price of $3.00 per share. Such options
were granted to Mr. Crane in conjunction with terms under two separate
private placement memorandums. Includes 2,000 shares per month to Directors
for their Board of Directors' duties.
(5) Mr. Gridley serves as a director on the Company's Board of Directors.
Includes 2,000 shares per month to Directors for their Board of Directors'
duties.
(6) Mr. Boyle serves as a director on the Company's Board of Directors.
Includes 25,000 shares of Common Stock issuable upon the exercise of
options exercisable through July 20, 2009 at a price of $1.25 per share.
These options were granted on June 20, 1999 in exchange for services
rendered in 1998. Includes 2,000 shares per month to Directors for their
Board of Directors' duties.
(7) Mr. Hurley serves as a director on the Company's Board of Directors.
Includes 30,000 shares of Common Stock issuable upon the exercise of
options exercisable through October 4, 2010 at a price of $3.00 per share.
These options were granted on October 4, 2000 in connection with his
agreeing to join the Company's Board.
(8) Mr. Siemens is the Company's Chief Operating Officer - Devices. Includes
50,000 shares of Common Stock issuable upon the exercise of options
exercisable through October 4, 2010 at a price of $3.00 per share. These
options were granted on October 4, 2000 as part of his employment
agreement, which includes a total common stock option package of 300,000
shares that vest ratably over a five year period and are exercisable
through October 4, 2010.
(9) Mr. Robinson is the Company's Chief Operating Officer - The Data Concern.
Includes 25,000 shares of Common Stock issuable upon the exercise of
options exercisable through October 4, 2010 at a price of $3.00 per share.
These options were granted on October 4, 2000 as part of his employment
agreement, which includes a total common stock option package of 200,000
shares that vest ratably over a five year period and are exercisable
through October 4, 2010.
(10) Mr. Sweezy is the Company's Chief Financial Officer. Includes (i) 25,000
shares of Common Stock issuable upon the exercise of options exercisable
through July 20, 2009 at a price of $1.25 per share which were granted on
June 20, 1999 in exchange for services rendered in 1998, (ii) 3,400 shares
of Common Stock issuable upon the exercise of options exercisable through
January 3, 2010 at a price of $1.25 per share which were granted on January
3, 2000 as part of the Company's annual ISO performance review, (iii)
20,000 shares of Common Stock issuable upon the exercise of options
exercisable through April 6, 2010 at a price of $2.44 per share which were
granted on April 6, 2000 in exchange for services rendered as interim Chief
Financial Officer and (iv) 22,500 shares of Common Stock issuable upon the
exercise of options exercisable through October 4, 2010 at a price of $3.00
per share which were granted on October 4, 2000 as part of his employment
agreement, which includes a total common stock option package of 150,000
shares that vest ratably over a five year period and are exercisable
through October 4, 2010
10
(11) Mr. Clegg is the Company's Chief Technology Officer. Includes (i) 11,400
shares of Common Stock issuable upon the exercise of options exercisable
through April 9, 2009 at a price of $1.25 per share which were granted on
April 9, 1999 for the annual performance review, (ii) 2,251 of Common Stock
issuable upon the exercise of options exercisable through June 30, 2009 at
a price of $.98 per share which were granted on June 30, 1999 as a 90-day
stay bonus, (iii) 4,200 shares of Common Stock issuable upon the exercise
of options exercisable through January 3, 2010 at a price of $1.25 per
share which were granted on January 3, 2000 as part of the Company's annual
ISO performance review and (iv) 30,000 shares of Common Stock issuable upon
the exercise of options exercisable through October 4, 2010 at a price of
$3.00 per share which were granted on October 4, 2000 as part of his
employment agreement, which includes a total common stock option package of
100,000 shares that vest ratably over a five year period and are
exercisable through October 4, 2010.
(12) Mr. Packard is the Company's Vice-President - Business Development.
Includes 25,000 shares of Common Stock issuable upon the exercise of
options exercisable through October 4, 2010 at a price of $3.00 per share
which were granted on October 4, 2000 as part of his employment agreement,
which includes a total common stock option package of 200,000 shares that
vest ratably over a five year period and are exercisable through October 4,
2010.
(13) Mr. Beatty is the Company's Vice-President of Sales - Consumer. Includes
37,500 shares of Common Stock issuable upon the exercise of options
exercisable through October 4, 2010 at a price of $3.00 per share which
were granted on October 4, 2000 as part of his employment agreement, which
includes a total common stock option package of 250,000 shares that vest
ratably over a five year period and are exercisable through October 4,
2010.
(14) Mr. Kalin is the Company's Vice-President of Sales - Professional. Includes
18,000 shares of common stock purchased on June 1, 1998 for $1.25 per share
pursuant to his employment agreement with the Company dated June 1, 1998 as
well as 18,000 matching shares issued by the Company pursuant to Mr.
Kalin's employment agreement. Also includes (i) 20,000 shares of Common
Stock issuable upon the exercise of options exercisable through June 1,
2008 at a price of $1.25 per share issued on June 1, 1998 pursuant to Mr.
Kalin's employment agreement, (ii) 19,800 shares of Common Stock issuable
upon the exercise of options exercisable through April 9, 2009 at a price
of $1.25 per share which were granted on April 9, 1999, (iii) 9,450 of
Common Stock issuable upon the exercise of options exercisable through June
30, 2009 at a price of $.98 per share which were granted as a 90-day stay
bonus on June 30, 1999 and (iv) 7,350 shares of Common Stock issuable upon
the exercise of options exercisable through January 3, 2010 at a price of
$1.25 per share which were granted on January 3, 2000 as part of the
Company's annual ISO performance review.
(15) Mr. Connolly is the Company's Vice-President - Operations. Includes (i)
60,000 shares of Common Stock issuable upon the exercise of options
exercisable through April 9, 2009 at a price of $1.25 per share which were
granted in conjunction with his employment agreement dated April 9, 1999,
(ii) 5,403 of Common Stock issuable upon the exercise of options
exercisable through June 30, 2009 at a price of $.98 per share which were
granted as a 90-day stay bonus on June 30, 1999, and (iii) 4,900 shares of
Common Stock issuable upon the exercise of options exercisable through
January 3, 2010 at a price of $1.25 per share which were granted on January
3, 2000 as part of the Company's annual ISO performance review.
11
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table sets forth certain information concerning
compensation earned by the Company Chief Executive Officer and each of the
Company's four other most highly compensated executive officers for the fiscal
year ended June 30, 2000, the transitional six-month fiscal period ended June
30, 1999 and the fiscal year ended December 31, 1998. The persons named in the
table are hereinafter referred to as the "Named Executive Officers."
Summary Compensation Table
Annual Compensation Long Term Compensations
- ------------------------------------------------------------------------------------------------------------------------------------
Awards Payouts
--------------------------------------------
Securities
Other Restricted Underlying All
Annual Stock Options LTIP Other
Year Salary Bonus Compensation Awards /SARs Payouts Compensation
Christopher Maus 2000 $150,000 $ 0 $0 -0- 250,000(3) -0- 18,000(5)
Chairman, Cheif Executive 1999 $120,000 $ 69,455(2) $0 -0- -0- -0- 24,000(5)
Officer, President and Director 1998 $ 77,900(1) $100,000(1) $0 -0- 400,000(4) -0- 18,000(5)
Edward Kalin 2000 $105,000 $ 0 $0 -0- 36,750(8) -0- 6,633(9)
Vice President 1999 $105,000 $ 0 $0 -0- 19,350 -0-
1998 $ 61,300(6) $ 0 $0 18,0000(7) 20,000 -0- -0-
Edward Siemens 2000 $125,000(10) $ 0 $0 -0- 300,000(10) -0- 15,000(10)
Paul Beatty 2000 $120,000(11) $ 0 $0 -0- 250,000(11) -0- 15,000(11)
- ----------------------
(1) In March 1996, the Company executed an employment contract with Mr. Maus
which provides an annual salary of $100,000. Additionally, in connection
with a 1994 agreement, the Company paid Mr. Maus a $100,000 bonus in July
1998 for successful completion of the private placement stock offering
completed in May 1998.
(2) Mr. Maus received a bonus of $69,455 on June 30, 1999 that offset his
promissory note receivable owed to the Company.
(3) Includes 250,000 shares of Common Stock issuable under stock options
granted to Mr. Maus on January 3, 2000 which ratably vest in annual
installments over a five year period and which are exercisable for a period
of ten years thereafter at an exercise price of $1.25 per share.
(4) Includes (i) 200,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Maus on April 10, 1998 and exercisable for a period
of five years thereafter at an exercise price of $1.25 per share. Includes
(ii) 100,000 shares of Common Stock issuable upon the exercise of options
granted to Mr. Maus on April 10, 1998 which options are exercisable based
upon the successful launch of Cholestron at an exercise price of $3.00 per
share any time prior to April 10, 2006; and (iii) 100,000 shares of Common
Stock issuable upon the exercise of options granted to Mr. Maus on April
10, 1998 which options are exercisable upon the Company achieving
$1,000,000 in net profits at an exercise price of $5.00 per share any time
prior to April 10, 2006.
(5) Shares issued for Board of Director Services
(6) Actual cash compensation was based on a start date of June 1, 1998.
(7) Matching shares from employment agreements.
(8) Grant of options from the 1998 ISO Plan exercisable upon ratable annual
vesting over a five year period granted to Mr. Kalin on January 3, 2000 and
exercisable for a period of ten years thereafter at an exercise price of
$1.25 per share.
(9) Payment of 1999 employee stay bonus.
(10) Annual Salary - Mr. Siemen's employment commenced on August 21, 2000.
Actual salary paid to October 20, 2000 was $19,392. Mr. Sieman's employment
agreement allows for a $15,000 moving allocation and a common stock option
package granted on October 4, 2000 totaling 300,000 shares at $3.00 per
share exercisable upon vesting for a period of ten years thereafter.
(11) Annual Salary - Mr. Beatty's employment commenced on October 1, 2000.
Actual salary paid to October 20, 2000 was $4,999. Mr. Beatty's employment
agreement allows for a $15,000 moving allocation and a common stock option
package granted on October 4, 2000 totaling 250,000 shares at $3.00 per
share exercisable upon vesting for a period of ten years thereafter.
12
Stock Options
The Company has reserved 600,000 shares of its Common Stock for issuance
upon the exercise of options granted or available for grant under its 1996
Incentive Stock Option Plan ("ISOP"). Options granted under the ISOP fall within
the meaning of, and conform to, Section 422 of the Internal Revenue Code of
1986, as amended. Under the terms of the ISOP, all officers, employees,
consultants, and advisors of the Company are eligible for incentive stock
options ("ISOs"). The Board of Directors determines at its discretion which
persons receive ISOs, the applicable vesting provisions, and the exercise term
thereof. The terms and conditions of each option grant may differ and will be
set forth in the optionee's individual incentive stock option agreement. As of
October 20, 2000, the Company has not issued any shares under the 1993 ISOP.
The Company has reserved 2,000,000 shares of its Common Stock for
issuance pursuant to options or stock appreciation rights granted under its 1998
Stock Option Plan ("1998 Plan"). The 1998 Plan is administered by either the
Board of Directors or its Compensation Committee and determines, without
limitation, the selection of the persons who will be granted options under the
1998 Plan, the type of options to be granted, the number of optioned shares and
the option exercise price per share. The terms and conditions of each option
grant may differ and will be set forth in the optionee's individual incentive
stock option agreement. Officers, directors, key employees and consultants of
the Company and its subsidiaries are eligible to receive Non-Qualified Stock
Options under the 1998 Plan. Only officers, directors and employees of the
Company who are employed by the Company or its subsidiaries are eligible to
receive Incentive Stock Options. As of October 20, 2000, the Company had issued
293,700 shares with 131,550 of these shares vested and exercisable under the
1998 ISOP Plan.
Option/SAR Grants in Last Fiscal Year
Number of Percent of Total
Securities Option/SARs
Underlying Granted to
Option/SARs Employees in Exercise or Base
Name Granted (#) Fiscal Year Price ($/Share) Expiration Date
- ---------------------------------------------------------------------------------------------------------------------
Christopher Maus 250,000 46.30% $1.25 1/03/10
Edward Kalin 36,750 6.8% $1.25 1/03/10
Edward Siemens -0- 0% -0-
Paul Beatty -0- 0% -0-
13
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY/End Option/SAR Values
Number of
Securities
Underlying
Option/SARs at Market Value of
Shares Acquired on Value FY End (#) Option/SARs at FY
Name Exercise(#) Realized Exercisable/ End (#) Exercisable/
($) Unexercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------
Christopher Maus -0- $0 250,000/400,000 $875,000/$1,400,000
Edward Kalin -0- $0 44,600/41,400 $156,100/$144,900
Edward Siemens -0- $0 -0-/-0- -0-/-0-
Paul Beatty -0- $0 -0-/-0- -0-/-0-
At the Company's fiscal year end on June 30, 2000, the common stock closed at
$3.50 per share as reported by the National Quotations Bureau Incorporated.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Christopher Maus received cash advances from the Company that were
formalized into a promissory note executed in favor of the Company by Mr. Maus
on December 31, 1995. The note matures upon demand by the Company and bears
interest at 8% per annum. On June 30, 1999, the Company authorized a bonus to
Mr. Maus in the amount of $69,455 that was offset against the outstanding
promissory note. The outstanding balance of the promissory note was $18,826,
$25,531 and $97,090 at June 30, 2000, June 30, 1999 and December 31, 1998,
respectively.
The Company and Messrs. Maus, Boyle, Crane, Connolly, and Sweezy were
shareholders of Secured Interactive Technologies, Inc. ("SITI"). On September 1,
1999 the Company completed the acquisition of SITI by effectuating a merger
whereby the stockholders of SITI received one share of the Company's common
stock for each share of SITI owned by such stockholder. The Company issued a
total of 1,944,000 shares of common stock to the stockholders of SITI.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") requires the Company's directors and executive officers, and
persons who own more than ten (10%) percent of a registered class of the
Company's equity securities, to file with the Securities and Exchange Commission
(the "Commission") initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than ten-percent stockholders are required by Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based upon a review of the information
furnished to the Company during the last fiscal year and to the date of
this proxy by such person, the Company believes that all reporting
requirements under Section 16(a) for such fiscal year were met in a
timely manner by its executive officers, Board members and greater than
10% shareholders except that certain of the Company's executive officers
and directors have looked to the Company to assist them in filing the
appropriate Section 16(a) reports and, inadvertently, such forms have
not been prepared or filed for the period from July 31, 1999 to the date
hereof. Mr. Boyle should have filed seven Forms 4, reporting 10
individual transactions. Mr. Clegg should have filed a Form 3 reporting
appointment to an Officer and two Forms 4, reporting 2 individual
transactions. Mr. Connolly should have filed three Forms 4 reporting 5
individual transactions. Mr. Kalin should have filed five Forms 4,
reporting five individual transactions. Mr. Maus should have filed
seven forms 4, reporting thirteen individual transactions. Mr. Sweezy
should have filed five forms 4, reporting 8 individual transactions.
Mr. Gridley should have filed two forms 4, reporting six individual
transactions. Mr. Crane should have filed five forms 4, reporting five
individual transactions. Messrs. Siemens, Beatty, Robinson, Packard and
Hurley have not filed Form 3 following their appointments as officers or
directors of the Company. Form 5 reports for all such executive
officers and directors will be filed for all such executive officers and
directors no later than November 15, 2000.
14
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of BDO Seidman LLP has served as independent public
accountants for the Company since 1997. The Board of Directors has appointed BDO
Seidman LLP to serve in the same capacity for the fiscal year ended June 30,
2001 and is asking stockholders to ratify the appointment of BDO Seidman LLP by
the Board of Directors as independent public accountants. The affirmative vote
of a majoruty of shares presented and voting at the Annual Meeting is required
to ratify the appointment of BDO Seidman. In the event that stockholders fail to
ratify the appointment of BDO Seidman LLP, the Board of Directors would
reconsider such appointment. Although the Board of Directors is submitting the
appointment of BDO Seidman LLP for stockholder approval, it reserves the right
to change the selection of BDO Seidman LLP as independent public accountants, at
any time during the fiscal year, if it deems such change to be in the best
interest of the Company, even after stockholder approval.
A representative of BDO Seidman LLP is expected to attend the Annual
Meeting. The representative will have the opportunity to make a statement if he
or she desires to do so and will be available to respond to appropriate
questions of the stockholders.
The Company's Board of Directors recommends that stockholders vote FOR the
ratification of the appointment of BDO Seidman LLP as the Company's independent
public accountants for the fiscal year ending June 30, 2001.
15
INTEREST OF CERTAIN PERSONS IN
OPPOSITION TO MATTERS TO BE ACTED UPON
Management is not aware of any substantial interest, direct or
indirect, by securities holdings or otherwise of any director, officer or
associates of the former in any matter to be acted on, as described herein,
other than the proposed nominees for election to the Company's Board of
Directors.
OTHER MATTERS
Management does not know of any matters to be presented at this Annual
Meeting other than those set forth herein and in the Notice accompanying this
Proxy Statement. If any other matters properly come before the Annual Meeting,
it is the intention of the persons named in the enclosed form of proxy to vote
the shares they represent as the Board of Directors may recommend. Discretionary
authority with respect to such matters is granted by the execution of the
enclosed proxy.
STOCKHOLDERS' PROPOSALS TO BE PRESENTED AT THE
COMPANY'S NEXT ANNUAL MEETING OF STOCKHOLDERS
Stockholder proposals intended to be presented at the 2001 Annual
Meeting of Stockholders of the Company must be received by the Company at its
principal executive offices at 510 Clearwater Loop, Suite 101, Post Falls, Idaho
83854, Attn: Chief Financial Officer not later than June 30, 2001 for inclusion
in the Proxy Statement and Proxy relating to the 2001 Annual Meeting of
Stockholders.
AVAILABILITY OF FORM 10-KSB ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 2000 accompanies this Proxy Statement, but is exclusive of
certain related exhibits filed with the Securities and Exchange Commission.
These exhibits are available, without charge, to stockholders upon request to
Christopher Maus, President, or Brett Sweezy, Chief Financial Officer.
It is important that your shares be represented at the Annual Meeting,
regardless of the number of shares which you hold. YOU ARE URGED TO EXECUTE
PROMPTLY AND RETURN THE ACCOMPANYING PROXY IN THE ENVELOPE WHICH HAS BEEN
ENCLOSED FOR YOUR CONVENIENCE. Stockholders who are present at the Annual
Meeting may revoke their proxies and vote in person or, if they prefer, may
abstain from voting in person and allow their proxies to be voted.
By Order of the Board of Directors,
/s/ Christopher Maus
-----------------------------------
Christopher Maus
Chairman of the Board of Directors,
President and Chief Executive Officer
October 27,2000
Post Falls, Idaho
16
This Proxy is solicited by and on behalf of the Board of Directors
LIFESTREAM TECHNOLOGIES, INC.
Proxy - Annual Meeting of Stockholders - December 15, 2000
The undersigned, revoking all previous proxies, hereby appoint(s) Christopher
Maus as Proxy, with full power of substitution, to represent and to vote all
Common Stock of Lifestream Technologies, Inc. owned by the undersigned at the
Annual Meeting of Stockholders to be held at Templin's Resort located at 414
East First Avenue, Post Falls, Idaho, on December 15, 2000 at 8:30 A.M.,
including any original or subsequent adjournment thereof, with respect to the
proposals set forth in the Notice of Annual Meeting and Proxy Statement. No
business other than matters described below is expected to come before the
meeting, but should any other matter requiring a vote of stockholders arise, the
person named herein will vote thereon in accordance with his best judgment. All
powers may be exercised by said Proxy. Receipt of the notice of Annual Meeting
and Proxy Statement is hereby acknowledged.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
1. Election of Directors
Nominees: Christopher Maus Michael Crane David M. Hurley
(Instructions: To withhold authority to vote for any individual
nominee please draw a line through that nominee's name)
[ ] WITHOLDING AUTHORITY to vote for all nominees listed above
2. To ratify the appointment of independent auditors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares represented by this proxy will be voted as directed. IF NO SPECIFIC
DIRECTION IS GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE
NOMINEES NAMED IN PROPOSAL 1 AND FOR PROPOSAL 2.
The undersigned stockholder hereby acknowledges receipt of the Notice of Annual
Meeting and Proxy Statement and hereby revokes any proxy or proxies heretofore
given. This proxy may be revoked at any time prior to the Annual Meeting. If you
received more than one proxy card, please date, sign an return all cards in the
accompanying envelope.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign in the corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: , 2000
-------------------------------------
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Signature
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Signature if held jointly
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(Please print name)
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(Number of shares subject to proxy)
PLEASE SIGN, DATE AND RETURN IN THE ENCLOSED ENVELOPE