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. )
Filed by the Registrant [X]
Filed by a 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
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
NEOMEDIA TECHNOLOGIES, INC.
(Name of Registrant as Specified in Its Charter)
NEOMEDIA TECHNOLOGIES, INC.
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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:
<PAGE>
NEOMEDIA TECHNOLOGIES, INC.
2201 Second Street, Suite 600
Fort Myers, Florida 33901
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 17, 1997
----------------
To Our Stockholders:
The 1997 annual meeting of the stockholders of NeoMedia Technologies, Inc.
will be held at The Radisson Hotel Lisle-Naperville, 3000 Warrenville Road,
Lisle, Illinois 60532, on Thursday, July 17, 1997, beginning at 9:30 a.m.,
Central Daylight Savings Time, for the following purposes:
1. To elect eight directors to hold office during the year following the
annual meeting or until their successors are elected (Item No.1 on proxy
card);
2. To ratify the appointment of Coopers & Lybrand L.L.P. as independent
auditors of the Corporation for the year ending December 31, 1997 (Item No.
2 on proxy card); and
3. To transact such other business as may properly come before the meeting or
any postponements or adjournments thereof.
The close of business on May 30, 1997 has been fixed as the record date for
determining the stockholders entitled to receive notice of and to vote at the
annual meeting or any postponement or adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ WILLIAM E. FRITZ
--------------------------
William E. Fritz
SECRETARY
June 13, 1997
Fort Myers, Florida
YOUR VOTE IS IMPORTANT
IT IS IMPORTANT THAT AS MANY SHARES AS POSSIBLE BE REPRESENTED AT THE ANNUAL
MEETING. PLEASE DATE, SIGN, AND PROMPTLY RETURN THE PROXY IN THE ENCLOSED
ENVELOPE. YOUR PROXY MAY BE REVOKED BY YOU AT ANY TIME BEFORE IT HAS BEEN VOTED.
<PAGE>
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS OF
NEOMEDIA TECHNOLOGIES, INC.
TO BE HELD ON JULY 17, 1997
TABLE OF CONTENTS
PAGE
------
General ............................................................... 1
Proposal One-Election of Directors .................................... 2
Information Concerning Nominees ....................................... 2
Recommendation of the Board of Directors .............................. 4
Stock Ownership of Directors and Executive Officers and Others ...... 4
Executive Officers Other Than Nominees .............................. 5
Committees of the Board of Directors ................................. 6
Compensation of Directors ............................................. 6
Proposal Two-Ratification of Appointment of Independent Auditors ...... 6
Executive Compensation ................................................ 7
Summary Compensation Table .......................................... 7
Incentive Plan for Management ....................................... 7
Option/Warrant Grants in 1996 ....................................... 8
Aggregate Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values .................................... 8
Employment Agreements ................................................ 9
Related Party Transactions .......................................... 10
Section 16(a) Beneficial Ownership Reporting Compliance ............... 12
Stockholder Proposals for the 1998 Annual Meeting of Stockholders ...... 13
Other Matters to be Acted Upon at the Annual Meeting of Stockholders ... 13
<PAGE>
NEOMEDIA TECHNOLOGIES, INC.
2201 Second Street, Suite 600
Fort Myers, Florida 33901
----------------
PROXY STATEMENT
----------------
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AT 9:30 A.M., JULY 17, 1997
GENERAL
SOLICITATION OF PROXIES. This proxy statement is furnished in connection
with the solicitation of proxies to be used at the Annual Stockholders Meeting
(the "Annual Meeting") of NeoMedia Technologies, Inc. ("NeoMedia"), a Delaware
corporation, to be held at The Radisson Hotel Lisle-Naperville, 3000 Warrenville
Road, Lisle, Illinois 60532, on Thursday, July 17, 1997, beginning at 9:30
a.m., and at any postponements or adjournments thereof, for the purposes set
forth herein. The principal executive offices of NeoMedia are located at 2201
Second Street, Suite 600, Fort Myers, Florida 33901. This proxy statement, the
enclosed proxy and a copy of NeoMedia's Annual Report to Stockholders for the
fiscal year ended December 31, 1996, are first being mailed on or about June 13,
1997, to stockholders of record.
The solicitation of proxies in the enclosed form is made on behalf of the
Board of Directors of NeoMedia.
COSTS OF SOLICITATION. The cost of preparing, assembling and mailing the
proxy material and of reimbursing brokers, nominees and fiduciaries for the
out-of-pocket and clerical expenses of transmitting copies of the proxy material
to the beneficial owners of shares held of record by such persons will be borne
by NeoMedia. NeoMedia does not intend to solicit proxies otherwise than by use
of the mail, but certain officers, directors and employees of NeoMedia, without
additional compensation, may use their personal efforts, by telephone or
otherwise, to solicit proxies.
STOCKHOLDERS ENTITLED TO VOTE AND OUTSTANDING VOTING SHARES. Only
stockholders of record at the close of business on May 30, 1997 are entitled to
notice of the Annual Meeting and to vote the shares of common stock of NeoMedia
held by them on that date at the Annual Meeting or any postponements or
adjournments thereof. Each outstanding share is entitled to one vote on each
matter to be voted upon. As of May 30, 1997, there were 5,376,096 shares of
NeoMedia's common stock issued and outstanding.
QUORUM AND VOTE REQUIRED FOR APPROVAL. One-third of the outstanding shares
are required to be present in person or by proxy at the Annual Meeting for there
to be a quorum for purposes of proceeding with the Annual Meeting. A simple
majority of the shares present in person or by proxy at the Annual Meeting, at
which a quorum is present, is required to elect directors and to ratify the
appointment of auditors. Votes may be cast by a stockholder in favor of the
nominees or withheld. Votes may be cast by a stockholder in favor of or against
the ratification of appointment of independent auditors or a stockholder may
elect to abstain. Abstentions and withheld votes will be counted for purposes of
determining if a quorum is present and will have the same effect as votes
against each matter. Broker non-votes (shares held of record by a broker for
which a proxy is not given) will be counted for purposes of determining a
quorum, and are shares not entitled to be voted and therefore will not be
counted for purposes of determining the total number of votes on any matter
considered at the meeting, but they do have the practical effect of reducing the
number of affirmative votes required to achieve a majority by reducing the total
number of shares from which the majority is calculated.
<PAGE>
VOTING AND REVOKING YOUR PROXY. A stockholder signing and returning a proxy
on the enclosed form has the power to revoke it at any time before the shares
subject to it are voted by giving the Secretary of NeoMedia written notice of
revocation by submitting a later-dated proxy or by attending the Annual Meeting
in person and requesting that the powers of the holders of such person's proxy
be suspended. Without such request, a proxy previously granted will not be
revoked. If a stockholder specifies how the proxy is to be voted with respect to
any of the proposals for which a choice is provided, the proxy will be voted in
accordance with such specifications. If a stockholder fails to so specify with
respect to such proposals, properly executed proxies received prior to being
voted will be voted "FOR" the nominees for directors contained in these proxy
materials and "FOR" the appointment of Coopers & Lybrand L.L.P. as NeoMedia's
auditors.
PROPOSAL ONE-ELECTION OF DIRECTORS
The annual election of NeoMedia's Board of Directors will take place at the
Annual Meeting. The Board proposes that each of the nominees described below be
elected to the Board. Each of the eight nominees, if elected, will serve on the
Board until their successors have been duly elected and qualified. Except for
Mr. Hosch, all of the nominees are currently serving as directors of NeoMedia.
If, for any reason, a nominee is unable to serve, the Board may designate a
substitute nominee and, if this occurs, the persons named in the enclosed proxy
may vote proxies that would otherwise be voted for all the named nominees for
the election of such substitute nominee or nominees. The Board has no reason to
believe that any of the nominees named below will be unable to serve.
INFORMATION CONCERNING NOMINEES
The following is information concerning nominees for election as directors
of NeoMedia. Seven of such persons are presently directors of NeoMedia.
CHARLES W. FRITZ, age 40, is a founder of NeoMedia and has served as its
President and a Director since its inception, and as Chief Executive Officer and
Chairman of the Board of Directors since August 6, 1996. Mr. Fritz is a member
of the Compensation Committee. Prior to founding NeoMedia, Mr. Fritz was an
Account Executive with IBM Corporation from 1986 to 1988, Director of Marketing
and Strategic Alliances for the Information Consulting Group from 1988-1989, and
a Consultant for McKinsey & Company. Mr. Fritz holds an M.B.A. from Rollins
College and a B.A. in finance from the University of Florida. Mr. Fritz is the
son of William E. Fritz, a Director of NeoMedia, and its Secretary.
WILLIAM E. FRITZ, age 66, is a founder of NeoMedia and has served as
Secretary and Director since its inception. He also served as Treasurer of
NeoMedia from its inception until May 1, 1996. Mr. Fritz, who has over
thirty-two years in establishing and operating privately owned companies,
currently is, and for at least the past ten years has been, an officer and
either the sole stockholder or a majority stockholder, of G.T. Enterprises, Inc.
(formerly Gen-Tech, Inc.), D.M., Inc. (formerly Dev-
Mark, Inc.) and EDSCO, three railroad freight car equipment manufacturing
companies. Mr. Fritz holds a B.S.M.E. and a Bachelor of Naval Science degree
from the University of Wisconsin. Mr. Fritz is the father of Charles W. Fritz,
NeoMedia's President, Chief Executive Officer and Chairman of the Board.
CHARLES T. JENSEN, age 53, has been Chief Financial Officer, Treasurer and
Vice President of NeoMedia since May 1, 1996. He has been a Director since
August 6, 1996. Mr. Jensen is a member of the Compensation Committee. Prior to
joining NeoMedia in November, 1995, Mr. Jensen, who has over 27 years of audit,
finance and business experience, including audit experience with Price
Waterhouse & Co., was Chief Financial Officer of Jack M. Berry, Inc., a Florida
corporation which grows and processes citrus products from December, 1994 to
October, 1995, and of Viking Range Corporation, a Mississippi corporation, a
manufacturer of gas ranges from November, 1993 to December, 1994. From December,
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<PAGE>
1992 to February, 1994, Mr. Jensen was Treasurer of Lin Jensen, Inc., a Virginia
corporation specializing in ladies clothing and accessories. Prior to that, from
January, 1982 to March, 1993, Mr. Jensen was Controller and Vice-President of
Finance of The Pinkerton Tobacco Co., a tobacco manufacturer. Mr. Jensen holds a
B.B.A. in accounting from Western Michigan University and is a Certified Public
Accountant.
ROBERT T. DURST, JR., age 44, has been Vice President of Technologies and
Business Development since April 1, 1996. He has been a Director since August 6,
1996. Prior to joining NeoMedia, Mr. Durst held management positions with Symbol
Technologies, Inc., Bohemia, New York, from February, 1992 to March, 1996 where,
among other things, he worked extensively on two dimensional bar code
technology. From March, 1986 to February, 1992, Mr. Durst was employed as a
Technical Director by Pitney Bowes, Inc., Stamford, Connecticut. Mr. Durst holds
an M.A. in Cognitive Psychology from the University of Illinois and a B.A. from
Allegheny College.
A. HAYES BARCLAY, age 66, has been a Director of NeoMedia since August 6,
1996, and is a member of the Stock Option Committee. Mr. Barclay has practiced
law for approximately 33 years and since 1985, has been an officer, owner and
employee of the law firm of Barclay & Damisch, Ltd. and its predecessor, with
offices in Chicago, Wheaton and Arlington Heights, Illinois. Mr. Barclay holds a
B.A. degree from Wheaton College, a B.S. from the University of Illinois and a
J.D. from the Illinois Institute of Technology-Chicago Kent College of Law.
JAMES J. KEIL, age 69, has been a Director of NeoMedia since August 6,
1996. Mr. Keil is a member of the Compensation Committee and of the Stock Option
Committee. He is founder and president of Keil & Keil Associates, a business and
marketing consulting firm located in Washington, D.C., specializing in
marketing, sales, and document technology projects. Prior to forming Keil & Keil
Associates in 1990, Mr. Keil worked for approximately 38 years at IBM
Corporation and Xerox Corporation in various marketing and sales positions. From
1989-1995, Mr. Keil was on the Board of Directors of Elixir Technologies
Corporation (a non-public corporation), and from 1990-1992 was the Chairman of
its Board of Directors. From 1992-1996, Mr. Keil served on the Board of
Directors of Document Sciences Corporation. Mr. Keil holds a B.S. degree from
the University of Dayton.
PAUL REECE, age 60, has been a Director of NeoMedia since August 6, 1996,
and is a member of the Compensation Committee. From 1987 until 1994, when he
retired from Pitney Bowes, Inc., Stamford, Connecticut, Mr. Reece served at
various times as its Vice-President of Operations and Technology Division,
Vice-President of Technical Systems and Advanced Products and Vice-President of
Corporate Engineering and Technology. Prior to joining Pitney Bowes, Inc., Mr.
Reece worked for 19 years at General Electric Company in various technical,
marketing and engineering positions. Mr. Reece holds a B.S., M.S. and PhD. in
electronics and engineering from the University of Manchester, England.
JAMES HOSCH, age 44, is currently the Senior Vice President of Corporate
Finance with Joseph Charles & Associates, Inc., the managing underwriter of
NeoMedia's initial public offering. Prior to joining Joseph Charles &
Associates, Inc. in 1995, Mr. Hosch was a Senior Vice President with Cohig &
Associates, a regional investment bank based in Denver, Colorado, with an
expertise in the areas of syndicate and corporate finance. Prior to that, Mr.
Hosch spent the majority of the past nineteen years in various aspects of real
estate in Texas. He graduated from Texas A&M University in 1975 with a B.B.A. in
Accounting.
Directors are elected on an annual basis. Each director of NeoMedia holds
office until the next annual meeting of the shareholders or until that
director's successor has been elected and qualified. At present, NeoMedia's
by-laws provide for not less than one director nor more than ten. Currently,
there are seven directors. Eight individuals have been nominated for election to
the Board; seven for re- election, and one for election. NeoMedia's by-laws
permit the Board of Directors to fill any vacancy and such director may serve
until the next annual meeting of shareholders or until his successor is elected
and qualified. Officers of NeoMedia are elected by the Board of Directors on an
annual basis and serve
3
<PAGE>
until the next annual meeting of the Board of Directors and until their
successors have been duly elected and qualified. From November 25, 1996 (the
date on which NeoMedia became a "public" company subject to the reporting
requirements of the Securities Exchange Act of 1934), to December 31, 1996,
NeoMedia held one directors' meeting which was attended by all directors.
NeoMedia has agreed, for a period of four years from November 25, 1996, if
so requested by Joseph Charles & Associates, Inc. ("Joseph Charles"), the
representative of the several underwriters of NeoMedia's initial public
offering, to nominate a designee of Joseph Charles as a director of NeoMedia.
James Hosch is the designee of Joseph Charles.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF NEOMEDIA RECOMMENDS THAT YOU VOTE "FOR" ALL OF
THE NOMINEES FOR DIRECTOR.
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS AND OTHERS
The following table provides information concerning the beneficial
ownership of common stock of NeoMedia as of May 1, 1997, (i) by each person or
entity known by NeoMedia to own beneficially more than five percent of
NeoMedia's common stock, (ii) by each of NeoMedia's current directors and
nominees for director, (iii) by each executive officer of NeoMedia named in the
Summary Compensation Table below, and (iv) by all executive officers and
directors of NeoMedia as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(1)
- ------------------------ ----------------------- -------------------
<S> <C> <C>
Charles W. Fritz(2)(3) ..................... 1,446,569 26.9%
Fritz Family Limited Partnership(2)(4) ...... 1,511,742 28.1%
Chandler T. Fritz 1994 Trust(2)(5)(6) ...... 58,489 1.1%
Charles W. Fritz 1994 Trust(2)(5)(7) ......... 58,489 1.1%
Debra F. Schiafone 1994 Trust(2)(5)(8) ...... 58,489 1.1%
Charles T. Jensen(2)(9) ..................... 90,386 1.7%
Robert T. Durst, Jr.(2)(9) .................. 153,657 2.8%
A. Hayes Barclay(10) ........................ 1,000 *
James J. Keil(11) ........................... 10,000 *
Paul Reece(12) .............................. 4,000 *
James Hosch(13) .............................. 27,000 *
All executive officers and directors
as a group (8 persons)(14) .................. 3,419,821 60.5%
<FN>
- ----------------
* less than one percent of issued and outstanding shares of Common Stock of
NeoMedia
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, and includes generally voting power
and/or investment power with respect to securities. Shares of common stock
subject to options currently exercisable or exercisable within sixty days
of May 1, 1997 are deemed outstanding for computing the beneficial
ownership percentage of the person holding such options but are not deemed
outstanding for computing the beneficial ownership percentage of any other
person. Options granted under NeoMedia's 1996 Stock Option Plan to Messrs.
Barclay, Keil, and Reece, and warrants (the "Principal Stockholder's
Warrants") granted to Charles W. Fritz are not currently exercisable or
exercisable within sixty days of May 1, 1997. Accordingly, the number of
shares of common stock issuable upon the exercise of any option or warrant
owned by such person or entity are not included in this table. Except as
indicated by footnote, to the knowledge of NeoMedia, the persons named in
the table above have the sole voting and investment power with respect to
all shares of common stock shown as beneficially owned by them.
4
<PAGE>
(2) c/o NeoMedia Technologies, Inc.
2201 Second Street, Suite 600
Fort Myers, FL 33901
(3) Mr. Fritz may be deemed to be a parent and promoter of NeoMedia, as those
terms are defined in the Securities Act of 1933 ("Securities Act"). Shares
beneficially owned (i) include 200 shares of common stock (50 shares owned
by each of Mr. Fritz's four minor children for an aggregate of 200 shares),
(ii) include 200 five-year redeemable publicly traded warrants to purchase
common stock at a price of $7.375 ("Warrants") (50 Warrants owned by each
of Mr. Fritz's four minor children for an aggregate of 200 Warrants), and
(iii) do not include the Principal Stockholder's Warrants to purchase
260,000 shares of common stock at $8.85 per share exercisable after
November 25, 1997.
(4) William E. Fritz, Secretary of NeoMedia, and his wife, Edna Fritz, are the
general partners of this Limited Partnership and therefore each are deemed
to be the beneficial owner of the 1,511,742 shares held in the Fritz Family
Partnership. As Trustee of each of the Chandler R. Fritz 1994 Trust,
Charles W. Fritz 1994 Trust and Debra F. Schiafone 1994 Trust, William E.
Fritz is deemed to be the beneficial owner of the shares of NeoMedia held
in each trust. Accordingly, Mr. William E. Fritz is deemed to be the
beneficial owner of an aggregate of 1,687,209 shares (175,467 of which as a
result of being trustee of the Chandler T. Fritz 1994 Trust, Charles W.
Fritz 1994 Trust and Debra F. Schiafone 1994 Trust, and 1,511,742 shares as
a result of being co-general partner of the Fritz Family Partnership). Mr.
William E. Fritz may be deemed to be a parent and promoter of NeoMedia, as
those terms are defined in the Securities Act.
(5) William E. Fritz is the Trustee of this Trust and therefore is deemed to be
the beneficial owner of such shares.
(6) Chandler T. Fritz, son of William E. Fritz, is primary beneficiary of this
trust.
(7) Charles W. Fritz, son of William E. Fritz and President and Chief Executive
Officer of NeoMedia, is primary beneficiary of this trust.
(8) Debra F. Schiafone, daughter of William E. Fritz, is primary beneficiary of
this trust.
(9) Represents options granted under NeoMedia's 1996 Stock Option Plan which
are currently exercisable.
(10) c/o Barclay & Damisch Ltd.
115 West Wesley Street
Wheaton, IL 60187
Does not include 1,000 shares of common stock owned by Mr. Barclay's adult
child living at Mr. Barclay's home, beneficial ownership of which is
disclaimed.
(11) c/o Keil & Keil Associates
733 15th Street, N.W.
Washington, DC 20005
(12) c/o 380 Gulf of Mexico Drive
Long Boat Key, FL 34228
Includes 2,000 Warrants owned by Mr. Reece
(13) Represents part of the warrants issued to Joseph Charles & Associates,
Inc., the managing underwriter of NeoMedia's initial public offering, in
connection with such offering. These warrants are not exercisable until
November 25, 1997.
(14) Includes an aggregate of 244,043 options granted under NeoMedia's 1996
Stock Option Plan and 29,200 Warrants.
</FN>
</TABLE>
EXECUTIVE OFFICERS OTHER THAN NOMINEES
DAN TRAMPEL, age 44, has been Senior Vice-President of Sales since July 3,
1996. Mr. Trampel has approximately twenty years of experience in sales,
marketing, sales management and general management. Prior to joining NeoMedia,
from September, 1993 to May, 1994, Mr. Trampel was Vice- President of Sales for
the Great Lakes region for Hitachi Data Systems, a California based company
which markets mainframe computers and peripherals to Fortune 500 companies. From
July, 1991 to August, 1993, Mr. Trampel was Vice-President of Sales, Marketing
and Customer Support for Data- Link Systems, Incorporated, an Indiana based
company which acts as a data servicer and software development concern to large
banks and mortgage servicers. From February, 1989 to January, 1991, Mr. Trampel
was Vice-President of Sales for the Central Region for Network Equipment
Technologies, Incorporated, a California based company which provides high-speed
hardware and software to Fortune 500 companies desiring to install and operate
their own private data networks. From July, 1974 to February, 1989, Mr. Trampel
worked for IBM Corporation where he worked in its Data Processing Division and
National Accounts Division until 1985, when he became the Branch Manager of its
Midtown Branch in Chicago, Illinois. Mr. Trampel holds a B.A. in Economics and
Public Administration from Drake University.
5
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
NeoMedia's Board of Directors has an Audit Committee, Compensation
Committee and a Stock Option Committee. The Board of Directors does not have a
Nominating Committee, and the functions of such committee are performed by the
Board of Directors.
AUDIT COMMITTEE. NeoMedia's Board of Directors acts as the Audit Committee,
which is responsible for nominating NeoMedia's independent accountants for
approval by the Board of Directors, reviewing the scope, results and costs of
the audit with NeoMedia's independent accountants, and reviewing the financial
statements, audit practices, and internal controls of NeoMedia. During the year
ended December 31, 1996, this Committee did not have any meetings, since
NeoMedia's initial public offering was only completed on November 25, 1996.
COMPENSATION COMMITTEE. The Compensation Committee is responsible for
recommending compensation and benefits for the executive officers of NeoMedia to
the Board of Directors and for administering NeoMedia's Incentive Plan for
Management. Charles W. Fritz and Charles T. Jensen served as the only members of
NeoMedia's Compensation Committee until February 20, 1997, when James J. Keil
and Paul Reece were elected as additional members of NeoMedia's Compensation
Committee. During the year ended December 31, 1996, this Committee did not have
any meetings, since NeoMedia's initial public offering was only completed on
November 25, 1996.
STOCK OPTION COMMITTEE. The Stock Option Committee, which is comprised of
non-employee directors, is responsible for administering NeoMedia's Stock Option
Plan. Effective November 25, 1996, A. Hayes Barclay and James J. Keil became
members of NeoMedia's Stock Option Committee. During the year ended December 31,
1996, this Committee did not have any meetings, since NeoMedia's initial public
offering was only completed on November 25, 1996.
COMPENSATION OF DIRECTORS
Directors who are also employees of NeoMedia do not receive any additional
compensation for services rendered as a director. Directors are reimbursed for
expenses actually incurred in connection with attending meetings of the Board.
Options to purchase 3,000 shares of NeoMedia's Common Stock are granted to
non-employee directors on the date that such person first becomes a member of
the Board of Directors. In addition, options to purchase up to an additional
1,000 shares of Common Stock are automatically granted to each non-employee
director as of the date of each annual meeting at which such person is
re-elected or continues to serve as a director.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors have selected and approved Coopers & Lybrand L.L.P.
as the principal independent auditors to audit the financial statements of
NeoMedia for 1997, subject to ratification by the stockholders. It is expected
that a representative of the firm of Coopers & Lybrand L.L.P. will be present at
the Annual Meeting and will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
In 1995, NeoMedia voluntarily changed its independent accountants from
McGladrey & Pullen, LLP to Coopers & Lybrand L.L.P. This change was approved by
NeoMedia's Board of Directors. The financial statements for each of the years in
the two year period ended December 31, 1995 were audited by Coopers & Lybrand
L.L.P. McGladrey & Pullen, LLP ("McGladrey") had been retained to audit
NeoMedia's balance sheet as of the year ended December 31, 1994. The report of
McGladrey for the year ended December 31, 1994, which is not included herein,
contained no adverse opinion or
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disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope or application of accounting principles. During the year ended December
31, 1994 and through the date of replacement, there were no disagreements with
McGladrey on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF NEOMEDIA RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE RATIFICATION OF COOPERS & LYBRAND L.L.P. AS NEOMEDIA'S INDEPENDENT AUDITORS.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
compensation paid to (i) NeoMedia's Chief Executive Officer and (ii) each of
NeoMedia's other executive officers who received aggregate cash compensation in
excess of $100,000 for services rendered to NeoMedia (collectively, "the Named
Executive Officers") during the years ended December 31, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1) SECURITIES
------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) WARRANTS/OPTIONS COMPENSATION
- --------------------------- ---- --------- ---------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Charles W. Fritz 1996 $146,666 $ 36,667 260,000(3) $5,486(4)
President and 1995 110,000 - - -
Chief Executive Officer 1994 145,000 230,000 - -
Charles T. Jensen 1996 95,000 50,782 90,386(5) $3,780(4)
Chief Financial Officer and 1995(6) 10,833 - - -
Vice-President and Treasurer 1994(7) - - - -
Robert T. Durst, Jr. 1996 104,994 22,967 153,657(5) $4,704(4)
Vice-President of Technologies 1995(7) - - - -
and Business Development 1994(7) - - - -
<FN>
- ----------------
(1) In accordance with the rules of the Securities and Exchange Commission
("Commission"), other compensation in the form of perquisites and other
personal benefits has been omitted in those instances where the aggregate
amount of such perquisites and other personal benefits constituted less than
the lesser of $50,000 or 10% of the total of annual salary and bonuses for
the Named Executive Officer for such year.
(2) The 1996 bonuses were paid in February, 1997, except $30,000 of the bonus to
Mr. Jensen, which was paid in August, 1996. The 1994 bonus was paid in
December, 1994.
(3) Represents a warrant, exercisable for a period of four years commencing
November 25, 1997, to purchase up to 260,000 shares of common stock at an
exercise price of $8.85.
(4) Includes life insurance premiums and the corresponding income tax effects of
these transactions.
(5) Represents options granted under NeoMedia's Stock Option Plan.
(6) Amounts cover the period from date of employment by NeoMedia in November,
1995 until December 31, 1995.
(7) Was not employed by NeoMedia during this year.
</FN>
</TABLE>
INCENTIVE PLAN FOR MANAGEMENT
Effective as of January 1, 1996, NeoMedia adopted an annual Incentive Plan
for Management ("Incentive Plan"), which provides for annual cash bonuses to
eligible employees based upon the
7
<PAGE>
attainment of certain corporate and individual performance goals during the
year. The Incentive Plan is designed to provide additional incentive to
NeoMedia's management to achieve these growth and profitability goals.
Participation in the Incentive Plan is limited to those employees holding
positions assigned to incentive eligible salary grades and whose participation
is authorized by NeoMedia's Compensation Committee (which administers the
Incentive Plan, including determination of employees eligible for participation
or exclusion). The Board of Directors can amend, modify or terminate the
Incentive Plan for the next plan year at any time prior to the commencement of
such next plan year.
To be eligible for consideration for inclusion in the Incentive Plan, an
employee must be on NeoMedia's payroll for the last three months of the year
involved. Death, total and permanent disability, or retirement are exceptions to
such minimum employment, and awards in such cases are granted on a pro-rata
basis. In addition, where employment is terminated due to job elimination, a
pro-rata award may be considered. Employees who voluntarily terminate their
employment, or who are terminated by NeoMedia for unacceptable performance,
prior to the end of the year are not eligible to participate in the Incentive
Plan. All awards are subject to any governmental regulations in effect at the
time of payment.
Performance goals are determined for both NeoMedia's and the employee's
performance during the year, and if performance goals are attained, eligible
employees are entitled to an award based upon a specified percentage of their
base salary.
The following presents certain information on stock options and warrants
for the Named Executive Officers of NeoMedia for the year ended December 31,
1996:
<TABLE>
<CAPTION>
OPTION/WARRANT GRANTS IN 1996
(INDIVIDUAL GRANTS)
----------------------------------------------------------------------------------------------
NUMBER OF SECURITIES PERCENTAGE OF TOTAL OPTIONS/
UNDERLYING OPTIONS/ WARRANTS GRANTED TO
NAME WARRANTS GRANTED EMPLOYEES IN 1996 EXERCISE PRICE EXPIRATION DATE
- ---- ----------------------- ------------------------------ -------------- ---------------
<S> <C> <C> <C> <C>
Charles W. Fritz ......... 260,000(1) 100.0%(1) $8.85 11/25/01
Charles T. Jensen ......... 90,386(2) 6.4% $.84 02/01/06
Robert T. Durst, Jr. ...... 153,657(2) 10.8% $.84 04/01/06
<FN>
- ----------------
(1) Represents a warrant ("Principal Stockholder's Warrant"), exercisable for
four years commencing November 25, 1997, granted in consideration of loans
made to NeoMedia. Since this was the only warrant granted, it represents
100% of all warrants of this kind granted. When combined with all options
granted under NeoMedia's 1996 Stock Option Plan, the Principal Stockholder's
Warrant represents 14.3% of all options and warrants granted by NeoMedia in
1996.
(2) Represents options granted under NeoMedia's 1996 Stock Option Plan. This
plan provides for the granting of nonqualified stock options and "incentive
stock options" within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended, and provides for the issuance of a maximum of
1,500,000 shares of common stock. No stock options can be granted after
January 31, 1999, and the maximum term of an option is ten years from the
date of its grant. The exercise price of each option must be not less than
100% of the fair market value of NeoMedia's common stock on the date the
option is granted. Options granted under the plan cannot be exercised until
one year from the date of grant. As of April 30, 1997, options to purchase
an aggregate of 1,398,603 shares of common stock have been granted.
</FN>
</TABLE>
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table sets forth options exercised by NeoMedia's Named
Executive Officers during fiscal 1996, and the number and value of all
unexercised options at fiscal year end. The value of "in-the-money" options
refers to options having an exercise price which is less than the market price
of NeoMedia's stock on December 31, 1996.
8
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED SECURITIES IN-THE-MONEY OPTIONS
UNDERLYING OPTIONS AT AT DECEMBER 31, 1996
SHARES DECEMBER 31, 1996 (BASED ON $4.785 PER SHARE)
ACQUIRED VALUE ------------------------------- -----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- -------------- ---------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Charles W. Fritz ......... - - 0 260,000 $0 $ 0
Charles T. Jensen ......... - - 0 90,386 $0 $432,497
Robert T. Durst, Jr. ...... - - 0 153,657 $0 $735,249
</TABLE>
For the year ended December 31, 1996, there have not been any long term
incentive plan awards made to a Named Executive Officer.
EMPLOYMENT AGREEMENTS
NeoMedia has entered into five year employment agreements ending April 30,
2001, with each of Charles W. Fritz, its President and Chief Executive Officer,
and Charles T. Jensen, its Vice President, Chief Financial Officer and
Treasurer, and with Robert T. Durst, Jr., its Vice-President of Technologies and
Business Development and Chief Technical Officer, ending March 31, 2001. The
employment agreements for Messrs. Fritz, Durst and Jensen provide for an annual
salary of $170,000, $140,000 and $110,000, respectively, subject to annual
review by the Board of Directors which may increase but not decrease such
salary, and participation in all benefits and plans available to executive
employees of NeoMedia. Effective May 1, 1997, the annual base salaries for
Messrs. Fritz and Jensen were increased to $187,000 and $121,000, respectively,
and the annual base salary for Mr. Durst was increased to $154,000, effective
April 1, 1997. Each employment agreement terminates upon the employee's death or
retirement, and may be terminated by NeoMedia upon the employee's total
disability, as defined in the agreement, or for cause which is defined, among
other things, as the willful failure to perform duties, embezzlement, or
conviction of a felony. In addition, Messrs. Fritz, Durst and Jensen participate
in a special insurance disability plan and receive life insurance benefits not
generally offered to other employees and are also entitled to certain severance
benefits. These severance benefits vary depending upon the reason for
termination and whether there has been a change in control of NeoMedia. If
termination occurs by NeoMedia (except for cause or total disability) or by the
employee for good reason, as defined in the employment agreement, the agreement
provides that NeoMedia will pay to the terminated employee (i) his salary
through the date of termination, (ii) any deferred and unpaid amounts due under
NeoMedia's Incentive Plan for Management, (iii) any accrued deferred
compensation, (iv) an amount equal to two times the sum of his annual base
salary plus his highest incentive compensation for the last two years, (v)
unpaid incentive compensation including a pro-rata amount of contingent
incentive compensation for uncompleted periods, (vi) in lieu of any stock
options granted whether under NeoMedia's Stock Option Plan or otherwise (which
are canceled upon the following payment), a cash amount equal to the aggregate
spread between the exercise prices of all options held at such time by such
terminated employee and the higher of the highest bid price of the common stock
during the twelve months immediately preceding the date of termination, or the
highest price per share of common stock actually paid in connection with any
change in control (as defined in the employment agreement) of NeoMedia, provided
that such payments do not violate the provisions of any option or the Stock
Option Plan or other plan then in effect, (vii) an amount equal to any taxes
payable on these payments, (viii) all relocation expenses if the terminated
employee moves his principal residence more than 50 miles within one year from
the date of termination, and (ix) all legal fees and expenses incurred as a
result of the termination. In addition, unless termination is for cause,
NeoMedia must continue to fund through the terminated employee's normal
retirement age any key man insurance that is in effect on the date of
termination, maintain in effect for the benefit of the terminated employee all
employee benefit plans, programs, or arrangements in effect immediately prior to
the date of termination. If the terminated employee's continued participation
under such plan and programs is not allowable, NeoMedia is obligated to provide
him with similar benefits. Each employment agreement provides that services may
be performed for companies, other entities, and individuals (whether or not
affiliated with NeoMedia) provided that the performance of such service does not
prevent the employee
9
<PAGE>
from attending to the affairs of NeoMedia, and such companies are not in
competition with NeoMedia. The employment agreements of Messrs. Fritz and Durst
contain provisions prohibiting their competing with NeoMedia both during and,
depending upon the reason for such termination, for one year following the
termination of their employment.
RELATED PARTY TRANSACTIONS
In 1994, NeoMedia paid to William E. Fritz the aggregate amount of $390,000
for a series of loans, in the aggregate amount of $803,000, made by him to
NeoMedia in 1993 and 1994. The net result of such transactions was that as of
December 31, 1994, NeoMedia was indebted to Mr. Fritz in the aggregate amount of
$413,000, which was represented by a promissory note, payable within thirty days
of demand, bearing interest at the rate of nine percent payable on the last day
of each calendar month. As described below, in the series of transactions
occurring in December, 1995, and January, 1996, this loan was repaid in full,
with $230,000 and $183,000 of this loan being repaid in December, 1995 and
January, 1996, respectively.
At various times, Dev-Mark, Inc. ("Dev-Mark"), an Illinois corporation
solely owned by William E. Fritz, and Gen-Tech, Inc. ("Gen-Tech"), an Illinois
corporation owned by William E. Fritz (or a limited partnership of which Mr.
Fritz is a general partner) and three minority stockholders, each of which is a
separate trust, with William E. Fritz, as trustee, and one of his three children
(including Charles W. Fritz) as the primary beneficiary of one of the trusts,
loaned money to NeoMedia and Dev-Tech Migrations, Inc., an Illinois corporation
and an affiliate of NeoMedia's predecessor ("DTM"). Until March 13, 1996,
Dev-Mark and Gen-Tech were shareholders of NeoMedia, at which time the
respective stock ownership in NeoMedia of such corporations was distributed to
their respective stockholders.
In 1994, Dev-Mark, in several transactions, loaned to NeoMedia the
aggregate principal amount of $255,000, $180,000 of which was repaid within
approximately one week. The remaining $75,000 was represented by a promissory
note, payable within thirty days of demand, bearing interest at the rate of nine
percent payable on the last day of each calendar month. As set forth below, in
the series of transactions occurring in December, 1995, and January, 1996, this
loan was paid in full in January, 1996.
In November, 1994, NeoMedia borrowed from Charles W. Fritz the principal
sum of $45,000, which was repaid in less than one week.
In 1994, Charles W. Fritz loaned DTM the principal sum of $10,000,
represented by a promissory note, payable within thirty days of demand, bearing
interest at the rate of nine percent payable on the last day of each calendar
month. This loan was paid in full in February, 1997.
In December, 1994, William E. Fritz loaned DTM the principal sum of
$90,000, represented by a promissory note, payable within thirty days of demand,
bearing interest at the rate of nine percent, payable on the last day of each
calendar month. As described below, in the series of transactions occurring in
December, 1995, and January, 1996, $70,000 and $20,000 of this loan were repaid
in December, 1995, and January, 1996, respectively.
In August, 1995, Gen-Tech loaned DTM the principal sum of $150,000,
represented by a promissory note, payable within thirty days of demand, bearing
interest at nine percent payable on the last day of each calendar month. As
described below in the series of transactions occurring in December, 1995, and
January, 1996, this loan was paid in full in December, 1995.
In December, 1994 and throughout 1995, NeoMedia loaned to DTM the aggregate
principal amount of approximately $600,000, represented by a $500,000 promissory
note, payable within five days of demand, bearing interest at the prime rate of
interest announced from time to time by NBD Bank,
10
<PAGE>
plus one percent, payable on the last day of each calendar month. This loan was
paid in full in the series of transactions described below occurring in
December, 1995, and January, 1996, with $230,000 being repaid in December, 1995,
and $370,000 being repaid in January, 1996.
DECEMBER, 1995 AND JANUARY, 1996 TRANSACTIONS
In December, 1995 and January, 1996, in a series of transactions between
affiliates, funds were loaned and borrowed between Charles W. Fritz, William E.
Fritz, Gen-Tech, Dev-Mark, DTM and NeoMedia.
In the transactions occurring in December, 1995: (1) Charles W. Fritz
loaned $450,000 to DTM, which used such funds to pay existing indebtedness of
$230,000, $150,000 and $70,000 to NeoMedia, Gen-Tech and William E. Fritz,
respectively, and (2) NeoMedia paid $230,000 to William E. Fritz in partial
payment of existing indebtedness.
In the transactions occurring in January, 1996: (1) Charles W. Fritz loaned
$750,000 to DTM, which used such funds to pay existing indebtedness of $20,000
and $370,000 to William E. Fritz and NeoMedia, respectively, (2) DTM loaned
$360,000 to NeoMedia, (3) NeoMedia paid $183,000 and $75,000 to William E. Fritz
and Dev-Mark, respectively, for existing indebtedness, and (4) NeoMedia loaned
William E. Fritz $472,000.
The result of such transactions occurring in December, 1995, and January,
1996, with respect to NeoMedia was that (1) NeoMedia and DTM paid in their
entirety any indebtedness owed by them to William E. Fritz, (2) NeoMedia loaned
to William E. Fritz the principal sum of $472,000, represented by a note payable
within 30 days of demand, bearing interest at eight percent per annum, (3)
NeoMedia paid in its entirety any indebtedness owed by it to Dev-Mark, (4)
Charles W. Fritz loaned to DTM the aggregate principal sum of $1,200,000,
represented by notes payable within thirty days of demand, bearing interest at
eight percent per annum, (5) DTM paid to William E. Fritz, NeoMedia and Gen-
Tech, in their entirety, any indebtedness existing prior to or incurred as a
result of such transactions, (6) DTM loaned to NeoMedia the principal sum of
$360,000, which is represented by a note payable within 30 days of demand,
bearing interest at eight percent per annum. The $472,000 loan receivable from
William E. Fritz was repaid in full in February, 1997.
Following these series of transactions occurring in December, 1995 and
January, 1996, DTM was indebted to Charles W. Fritz in the aggregate principal
amount of $1,210,000, which was comprised of the $1,200,000 resulting from these
transactions and a $10,000 loan in 1994 described above. This $1,210,000
principal amount remained unpaid until October, 1996, at which time Mr. Fritz
contributed $738,000 of such indebtedness to additional paid-in capital of
NeoMedia, thus reducing such aggregate principal indebtedness to him from DTM to
$472,000. This loan was repaid in full in February, 1997.
In March, 1996, Dev-Mark loaned to NeoMedia the principal sum of $135,000,
represented by a promissory note, payable within thirty days of demand, bearing
interest at the rate of eight percent payable on the last day of each calendar
month. This loan was repaid in full in December, 1996.
In March, 1996, Charles W. Fritz loaned NeoMedia the principal sum of
$35,958.19, represented by a promissory note, payable within thirty days of
demand, bearing interest at the rate of eight percent payable on the last day of
each calendar month. $6,000 of the principal amount of this loan was repaid in
several days from the date of the loan. The remaining principal amount of
$29,958.19 was paid in August, 1996.
In June, 1996, Charles W. Fritz loaned NeoMedia the principal sum of
$200,000, represented by a promissory note, payable within thirty days of
demand, bearing interest at the rate of eight percent payable on the last day of
each calendar month. This loan was repaid in full in December, 1996.
In June, 1996, in consideration of loans made by Charles W. Fritz to it,
NeoMedia granted to him a warrant (the "Principal Stockholder's Warrant") to
purchase up to 260,000 shares of Common Stock at
11
<PAGE>
an exercise price of $8.85. This warrant is exercisable for a period of four
years commencing on November 25, 1997 and contains anti-dilution provisions.
In connection with the extension of credit facilities by NBD Bank to
NeoMedia in 1994, and in connection with the renewal of such credit facility (1)
Gen-Tech (with respect to the first renewal in 1995 of the facility) and
Dev-Mark (with respect to the initial facility) guaranteed NeoMedia's
obligations to the Bank; (2) William E. Fritz pledged to the lender, as
collateral for the loan, all shares of Gen-Tech stock owned by him until the
second renewal in August, 1996, when such stock was released; (3) NeoMedia
assigned to the Bank all of its rights in the demand promissory note for
$500,000 from DTM to NeoMedia, and the security agreement between NeoMedia and
DTM until the second renewal in August, 1996, when NeoMedia and DTM became
co-borrowers; and (4) William E. Fritz (and Dev-Mark and Gen-Tech with respect
to the first renewal of the facility) subordinated rights to the Bank. In
February, 1997, William E. Fritz, Dev-Mark and Gen-Tech were released from the
guarantees on the NBD credit facility, including the letter of credit.
During the years ended December 31, 1996, and 1995, NeoMedia performed
administrative services for Gen-Tech in the amount of $6,838 and $3,500,
respectively, and for Dev-Mark in the amount of $11,363 and $27,364,
respectively.
During the years ended December 31, 1996 and 1995, NeoMedia performed
administrative services for Storage 2000, Inc., an affiliated company, in the
amount of $9,048 and $8,400, respectively, and for The Loop Group, Inc., an
affiliated company, in the amount of $-0- and $3,000, respectively. In addition,
for the years ended December 31, 1996 and 1995, NeoMedia has received rental
payments from Storage 2000, Inc. in the amount of $10,992 and $2,748,
respectively.
From July 15, 1995 to February 15, 1996, Charles W. Fritz and his wife,
pursuant to a verbal lease, leased space owned by them at 6054 Timberwood
Circle, #240, Ft. Myers, Florida 33908, to NeoMedia for use as an office at a
monthly rental of $350. During this period, the condominium was also used by
several employees as their personal living quarters, who paid Mr. Fritz monthly
rental of $500. Since February 15, 1996, the space has been leased exclusively
to NeoMedia at a monthly rental of $950.
Charles W. Fritz, Gen-Tech and Dev-Mark have each guaranteed NeoMedia's
obligations to IBM Credit Corp. ("ICC") under credit and financing
accommodations granted by ICC to NeoMedia. In addition, each guarantor
subordinated to ICC any liabilities and obligations owed to them by NeoMedia. If
any guarantor breaches the guaranty, ICC has the right, among other things, to
require immediate payment of all indebtedness of NeoMedia. In February, 1997,
Gen-Tech and Dev-Mark were released from the guarantees to ICC.
In November, 1996, NeoMedia entered into a lease with William E. Fritz
whereby Mr. Fritz leased to NeoMedia an exhibition booth which cost $85,435. The
lease is for 36 months with monthly payments of $2,858.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires NeoMedia's
officers and directors, and persons who own more than ten percent of a
registered class of NeoMedia's equity securities, to file reports of ownership
and changes in ownership with the Securities and Exchange Commission and with
the NASDAQ SmallCap Market. Officers, directors and greater than ten-percent
shareholders are required by the Securities and Exchange Commission regulation
to furnish NeoMedia with copies of all Section 16(a) forms they file.
With respect to compliance under Section 16(a) of the Securities Exchange
Act of 1934, James J. Keil, a director of NeoMedia, filed a Form 4, Statement of
Changes in Beneficial Ownership, in March of 1997 for purchases of NeoMedia's
common stock made in December, 1996 and February, 1997.
12
<PAGE>
STOCKHOLDER PROPOSALS
FOR THE 1998 ANNUAL MEETING OF STOCKHOLDERS
Any proposal of a stockholder intended to be presented at NeoMedia's 1998
annual meeting of stockholders must be received by the secretary of NeoMedia,
for inclusion in NeoMedia's proxy statement and proxy relating to the 1998
annual meeting, on or before January 5, 1998.
OTHER MATTERS TO BE ACTED UPON
AT THE ANNUAL MEETING OF STOCKHOLDERS
The management of NeoMedia knows of no other matters to be presented at the
Annual Meeting. Should any matter requiring a vote of the stockholders other
than those listed in this Proxy Statement arise at the meeting, the persons
named in the proxy will vote the proxies in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ WILLIAM E. FRITZ
-----------------------------
William E. Fritz
SECRETARY
June 13, 1997
Fort Myers, Florida
13
<PAGE>
NEOMEDIA TECHNOLOGIES, INC.
The undersigned hereby appoints CHARLES W. FRITZ AND CHARLES T. JENSEN and
WILLIAM E. FRITZ, or any of them individually, with full power of substitution,
to act as proxy and to represent the undersigned at the 1997 Annual Meeting of
shareholders and to vote all shares of common stock of NeoMedia Technologies,
Inc. which the undersigned is entitled to vote and would possess if personally
present at said meeting to be held at The Radisson Hotel, Lisle-Naperville, 3000
Warrenville Road, Lisle, Illinois 60532 on Thursday, July 17, 1997 at 9:30 a.m.,
and at all postponements or adjournments thereof upon the following matters:
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY
WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 LISTED ON THE
REVERSE SIDE. PROXIES ARE GRANTED THE DISCRETION TO VOTE UPON ALL OTHER MATTERS
THAT MAY PROPERLY BE BROUGHT BEFORE THE MEETING OR ANY POSTPONEMENT OR
ADJOURNMENT THEREOF.
(CONTINUED, AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
ADMISSION TICKET
ANNUAL MEETING OF
NEOMEDIA TECHNOLOGIES, INC.
THURSDAY, JULY 17, 1997
9:30 A.M.
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
A [X] Please mark your
votes as in this
example.
The Board of Directors recommends a vote FOR the nominees
and FOR the approval of the independent auditors.
FOR WITHHOLD
1. Election of [ ] [ ] Nominees: A. Hayes Barclay
Directors Robert T. Durst, Jr.
Charles W. Fritz
FOR, except vote withheld from the following William E. Fritz
nominees: James E. Hosch
Charles T. Jensen
____________________________________________ James J. Keil
Paul Reece
FOR AGAINST ABSTAIN
2. Approval of Coopers & Lybrand L.L.P. [ ] [ ] [ ]
as independent auditors for fiscal 1997
Change of Address [ ]
I plan to attend [ ] I do not [ ]
the meeting plan to
attend
the meeting
SIGNATURE(S)____________________________________________________DATE ___________
(NOTE: Please sign exactly as your name appears hereon, Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full titles as such.)
