UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [__]
Check the appropriate box:
[___] Preliminary Proxy Statement
[___] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(E) (2))
[ X ] Definitive Proxy Statement
[___] Definitive Additional Materials
[___] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
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BSD MEDICAL CORPORATION
(Name of Registrant as Specified In Its Charter)
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(Name of Persons(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[___] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not Applicable
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(2) Aggregate number of securities to which transaction applies:
Not Applicable
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(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):
Not Applicable
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(4) Proposed maximum aggregate value of transaction:
Not Applicable
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(5) Total fee paid: Not Applicable
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[___] Fee paid previously with preliminary materials.
[___] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: Not Applicable
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(2) Form, Schedule or Registration Statement No.: Not Applicable
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(3) Filing Party: Not Applicable
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(4) Date Filed: Not Applicable
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<PAGE>
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NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
To be Held February 2, 2001
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Dear Shareholder:
It is my pleasure to invite you to the 2000 Annual Meeting of the
Shareholders of BSD Medical Corporation, a Delaware corporation ("the Company")
which will be held on February 2, 2000, at 9.00 a.m., local time, at the offices
of the Company located at 2188 West 2200 South, Salt Lake City, Utah 84119. The
purposes of the meeting will be to:
o Consider and vote upon the appointment of Tanner + Co. as independent
auditors for the fiscal year ending August 31, 2001,
o Elect five directors to serve for one year terms, or until their
respective successors shall be duly elected or appointed, and
o Transact such other business as may properly come before the meeting,
or any adjournment or postponement of the meeting.
Only shareholders of record at the close of business on December 8,
2000, are entitled to vote at the meeting, or any adjournment or postponement of
the meeting. We are mailing proxy solicitation material to our shareholders
commencing on or before January 5, 2001. We must receive your proxy on or before
8:30 a.m. (MST) February 2, 2000, in order for your proxy to be voted at the
meeting.
You are invited to attend the meeting. Regardless of whether you expect
to attend the meeting in person, we urge you to read the attached proxy
statement and sign and date the accompanying proxy card and return it in the
enclosed postage-prepaid envelope. It is important that your shares be
represented at the meeting.
By Order of the Board of Directors,
By:
--------------------------------------
Salt Lake City, Utah Dixie Toolson Sells, Secretary
December 21, 2000
<PAGE>
TABLE OF CONTENTS
GENERAL INFORMATION...................................................1
INFORMATION REGARDING THE MEETING.....................................2
APPOINTMENT OF INDEPENDENT AUDITORS...................................5
ELECTION OF DIRECTORS.................................................6
BOARD AND COMMITTEE MEETINGS..........................................8
DIRECTOR COMPENSATION.................................................8
BENEFICIAL OWNERSHIP..................................................9
COMPENSATION OF EXECUTIVE OFFICERS...................................11
CERTAIN TRANSACTIONS.................................................13
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT............14
SHAREHOLDER PROPOSALS................................................15
OTHER MATTERS........................................................15
<PAGE>
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GENERAL INFORMATION
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We sent you this proxy statement and the enclosed proxy card because
our Board of Directors is soliciting your proxy for use at our 2000 annual
meeting of shareholders. All holders of record on December 8, 2000, of our
shares of common stock are entitled to vote at the meeting.
This proxy statement and the accompanying proxy card were first mailed
to shareholders on or before January 5, 2001. The package mailed to shareholders
includes the information required by Rule 14a-3 of the Rules of the Securities
and Exchange Commission, including audited financial statements for our last
completed fiscal year, which ended August 31, 2000. We are incorporating by
reference in this proxy statement our prior filings with the Securities and
Exchange Commission. If you would like copies of any of those documents, other
than the filings we are delivering to you in connection with this proxy
statement, you can request (by phone or in writing) copies of them by sending
your request to: BSD Medical Corporation, 2188 West 2200 South, Salt Lake City,
Utah 84119, Telephone (801) 972-5555, attention: Dixie Toolson Sells, Secretary.
We will not charge you for any of the copies.
At the meeting, you will be asked to:
o Consider and vote upon the appointment of Tanner + Co. as independent
auditors for the fiscal year ending August 31, 2001,
o Elect five directors to serve for one year terms, or until their
respective successors shall be duly elected or appointed, and
o Transact such other business as may properly come before the meeting,
or any adjournment or postponement of the meeting.
<PAGE>
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INFORMATION REGARDING THE MEETING
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What may I vote on? You will be entitled to vote, either in person or
by proxy, on:
(1) The approval of the appointment of Tanner + Co. as our independent
auditors for fiscal year 2001; AND
(2) The election of five directors to serve on our Board of Directors.
How does the Board recommend I vote on the proposals? The Board
recommends a vote FOR the appointment of Tanner + Co. as our independent
auditors for fiscal year 2001 and FOR each of the Board nominees.
Who is entitled to vote? Shareholders as of the close of business
December 8, 2000, (the record date) are entitled to vote at the meeting.
How do I vote? Sign and date the proxy card you receive with this proxy
statement and return it in the prepaid envelope. If you return your signed proxy
card but do not mark the boxes showing how you wish to vote, your shares will be
voted FOR the two proposals. You have the right to revoke your proxy at any time
before the meeting by:
o notifying our Corporate Secretary, Dixie Toolson Sells; OR
o voting in person; OR
o returning a later-dated proxy card.
Who will count the votes? We have appointed Dennis Bradley as the
inspector of the election. The inspector's representative will count and
tabulate the votes.
Is my vote confidential? Your vote will not be disclosed except:
o as needed to permit the inspector of election to tabulate and certify
the vote;
o as required by law; or
o in limited circumstances, such as a proxy contest in opposition to the
Board.
Additionally, all comments written on the proxy card or elsewhere will
be forwarded to our management, but your identity will be kept confidential
unless you ask that your name be disclosed.
What shares are included on the proxy card? The shares on your proxy
card represent ALL of your shares, including those shares held in your accounts
at various brokerages. If you do not return your proxy card, your shares will
not be voted.
What does it mean if I get more than one proxy card? If your shares are
registered differently and are in more than one account, you will receive more
than one proxy card. Sign and return all the proxy cards you receive to ensure
that all your shares are voted.
How many shares can vote? As of the record date December 8, 2000,
17,464,520 shares of common stock were outstanding and entitled to vote. Each
share of common stock is entitled to one vote on each matter being considered.
What is a "quorum"? A "quorum" is a majority of the outstanding shares.
The shares may be represented by attendance of the shareholder at the meeting or
by proxy. There must be a quorum for the meeting to be held, and a proposal must
be approved by more than 50% of the shares voting at a meeting at which there is
a quorum to be adopted. The five nominees for director receiving the highest
number of affirmative votes will be elected as directors. If you submit a
properly executed proxy card, even if you abstain from voting, then you will be
considered part of the quorum. However, abstentions are not counted in the tally
of votes FOR or AGAINST a proposal. We intend to treat shares referred to as
"broker non-votes" (i.e., shares held by brokers or nominees as to which the
broker or nominee indicates on a proxy that it does not have discretionary
authority to vote) as shares that are present and entitled to vote for purposes
of determining the presence of a quorum. We will not consider broker non-votes
as votes cast either for or against a particular matter.
Who can attend the Annual meeting? All of our shareholders on December
8, 2000, can attend. Due to limited space in the meeting room, we are limiting
the persons who can attend the meeting to our shareholders, their
representatives, our employees and directors and our representatives.
How will voting on any other business be conducted? Although we do not
know of any business to be considered at the meeting other than the proposals
described in this proxy statement, if any other business is presented at the
meeting, your signed proxy card gives authority to Dixie Toolson Sells, our
Secretary Treasurer, and Paul F. Turner, our Chairman of the Board, to vote on
those matters at their discretion.
Who are the largest principal shareholders? As of December 8, 2000, 3
of our shareholders each owned more than 5% of our capital stock. Those
shareholders are Gerhard Sennewald, our Director, who owns 38.59 % of our common
stock, Paul Turner, our Vice President and Chief Technology Officer, who owns
11.31% of our common stock, and John Langdon, our Shareholder, who owns 7.42 %
of our common stock.
How much did this proxy solicitation cost? We estimate that our costs
for distribution of the proxy materials or the solicitation of votes (which will
be conducted by our employees, officers and directors) will be approximately
$15,000. We will also reimburse brokerage houses and other custodians, nominees
and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy
and solicitation materials to our shareholders.
How do I revoke my proxy after I give it? A shareholder giving a proxy
pursuant to this solicitation may revoke it at any time prior to its exercise at
the meeting by delivering to our Corporate Secretary a written notice of
revocation, or a duly executed proxy bearing a later date, or by attending the
meeting and voting in person. Attendance at the meeting will not, however,
constitute revocation of your proxy without your further action. Any written
notice revoking your proxy should be sent to our principal executive offices
addressed as follows: BSD Medical Corporation, 2188 West 2200 South, Salt Lake
City, Utah 84119, Telephone (801) 972-5555, attention: Dixie Toolson Sells,
Secretary.
<PAGE>
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APPOINTMENT OF INDEPENDENT AUDITORS
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We are asking you to ratify our appointment of Tanner + Co. ("Tanner")
as our independent public accountants for the fiscal year ending August 31,
2001. Tanner currently acts as the Company's independent auditors, and has acted
in that capacity since August 14, 1997, when it was engaged to replace KPMG Peat
Marwick, L.L.P. ("KPMG"), as the Company's independent certified public
accountants for the year ending August 31, 1997. KPMG's engagement was
terminated on August 14, 1997. KPMG's report on the Company's 1996 financial
statements was modified to include an uncertainty as to the Company's ability to
continue as a going concern. Except for that modification, KPMG's report on the
Company's financial statements for 1995 and 1996 did not contain an adverse
opinion or disclaimer of opinion, nor was its report modified as to uncertainty,
audit scope, or accounting principles. KPMG's termination did not occur because
of resolved or unresolved disagreements on any matter of accounting principles
or practices, financial statement disclosures or auditing scope or procedures.
The decision to change the Company's accountants from KPMG to Tanner was
recommended by the Company's officers and approved by the Board.
A representative of Tanner + Co. has been invited to the meeting, and,
if in attendance, will have the opportunity to make a statement, and will be
expected to be available to respond to appropriate questions from shareholders.
The Board unanimously recommends that you vote
FOR the selection of Tanner + Co. to serve as our
auditors for the fiscal year ending August 31, 2001.
<PAGE>
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ELECTION OF DIRECTORS
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Our Board of Directors is comprised of five persons. All five of our
directors are standing for reelection at this year's annual meeting. Each
elected director will serve until the next annual meeting or until he is
succeeded by another qualified director who has been elected.
You are being asked to elect Messrs. Paul F. Turner, Hyrum A. Mead, Gerhard
W. Sennewald, Ph.D., J. Gordon Short, M.D., and Michael Nobel, Ph.D. to our
Board. Each of the nominees for director is now a member of the Board of
Directors, which met two times during fiscal year 2000.
The persons named as proxy holders in the enclosed proxy cards (Dixie
Toolson Sells and Paul F. Turner) have advised us that, unless a contrary
direction is indicated on a proxy card, they intend to vote for the election of
the five nominees. They have also advised us that, if any of the five nominees
are not available for election for any reason, they will vote for the election
of such substitute nominee or nominees, if any, as the Board may propose. Each
person nominated for election has agreed to serve if elected, and the Board of
Directors has no reason to believe that any nominee will be unavailable to serve
if elected.
The following information was provided to us by each of the nominees:
<TABLE>
<CAPTION>
Name Age Principal Occupation Director Since
---- --- -------------------- --------------
<S> <C> <C> <C>
Paul F. Turner 53 Chairman of the Board of Directors of the Company; 1994
Senior Vice President; Chief Technology Officer
Hyrum A. Mead 53 President of the Company 1999
Gerhard W. Sennewald, Ph.D. 64 President and Chief Executive Officer of Medizin-Technik 1994
GmbH
J. Gordon Short, M.D. 69 Chairman, Brevis Corporation 1994
Michael Nobel, Ph.D. 60 Chief Executive Officer of the MRAB Group 1998
</TABLE>
PAUL F. TURNER has served as a director of the Company since 1994. Mr.
Turner served as Staff and Senior Scientist to the Company from 1979 to 1986,
and as Vice President of Research from September 1986 through January 1989. In
January, 1989, Mr. Turner was promoted to Senior Vice President of Research, and
served the Company in that position through October, 1993. Mr. Turner resigned
as Vice President of Research in October, 1993, but remained the Company's
Senior Scientist until December 1994, when Mr. Turner was re-appointed as Senior
Vice President of Research and was elected to the Board. From October 1995 to
August 1999, Mr. Turner served as the Acting President of the Company. Since
August of 1999, Mr. Turner has served as Senior Vice President and Chief
Technology Officer of the Company.
HYRUM A. MEAD was appointed as President and appointed to the Board of
Directors in August 1999. He has served as Vice President of Business
Development at ZERO Enclosures, a leading manufacturer in the
telecommunications, computer and aerospace industry, and as President of Electro
Controls, a manufacturer of computer controlled power systems which have
significant technological overlap with the Company's systems. Mr. Mead began his
career in sales with IBM.
GERHARD W. SENNEWALD, Ph.D. has served as a director of the Company since
1994. In connection with Medizin-Technik GmbH of Munich, Germany, a firm which
is engaged in the business of distributing hyperthermia equipment and diagnostic
imaging equipment and services, Dr. Sennewald has been the Company's key
European representative and distributor for 13 years and has been instrumental
in obtaining the majority of the Company's foreign sales. Dr. Sennewald is the
President and Chief Executive Officer of Medizin-Technik GmbH.
J. GORDON SHORT, M.D. has served as a director of the Company since 1994.
From 1978 until 1982, Dr. Short participated in the initial development and
establishment of the Company's products as Medical Director for the Company. He
also previously served on the Company's Medical Advisory Board. Dr. Short has
been President and Chief Executive Officer of Brevis Corporation and now serves
as the Brevis Chairman, a medical products company which specializes in
consumable specialty supplies.
MICHAEL NOBEL, Ph.D. was appointed to the Board of Directors on January 13,
1998. Dr. Nobel is Chairman of the Board of the Nobel Family Society. He is
Chairman of the American Non-Violence Project Inc., and has served as a
consultant to Unesco in Paris and the United Nations Social Affairs Division in
Geneva. Dr. Nobel participated in the introduction of magnetic resonance imaging
as European Vice President for Fonar Corp. Dr. Nobel is the CEO of the MRAB
Group which provides diagnostic imaging services.
The Board of Directors recommends that you vote FOR
all of the director nominees.
<PAGE>
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BOARD AND COMMITTEE MEETINGS
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During fiscal year 2000, our Board of Directors held 2 meetings, and
each director attended at least 75% of those meetings. The Board, as a whole,
acts as the Audit Committee, the Compensation Committee, and the Executive
Committee. The Board does not have any current plans to establish separate
committees for any of those functions.
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DIRECTOR COMPENSATION
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The Company's 1998 Director Stock Plan provides for annual compensation
in the amount of $12,000 for each non-employee director -- $4,000 to be paid in
cash and the balance of the retainer to be paid in the form of restricted shares
of the Company's common stock. In addition to the annual compensation to
directors, the plan provides that each non-employee director will receive an
annual option to purchase 25,000 restricted shares of the Company's common stock
at a purchase price of 85% of the fair market value at the date the option is
granted. The options vest over 5 years and expire in 10 years. On September 1,
1998, the Company awarded S. Lewis Meyer, Michael Nobel, Gerhard W. Sennewald,
and J. Gordon Short options to purchase 25,000 shares of the Company's
restricted common stock at $ 0.24 per share. On March 1, 1999, the Company
awarded S. Lewis Meyer, Michael Nobel, Gerhard W. Sennewald and J. Gordon Short
each $2,000 and 10,240 shares of restricted common stock, based on their service
to the Company for the prior six months. On September 1, 1999, the Company
awarded Michael Nobel, Gerhard W. Sennewald, and J. Gordon Short each options to
purchase 25,000 shares of the Company's restricted common stock at $ 0.39 per
share. The Company also paid each director $2,000, and awarded them each 8,633
shares of restricted common stock based on service to the company for the prior
six months. On September 1, 1999, the Company awarded S. Lewis Meyer 2,065
shares of restricted common stock and paid him $478.26 for his service to the
Company from March 1, 1999, through April 13, 1999, when he resigned from the
position on the Board of Directors. On March 1, 2000, Michael Nobel, Gerhard W.
Sennewald, and J. Gordon Short were paid $2,000 and awarded 1,587 shares of
restricted common stock, based on service to the Company for the prior six
months. On September 1, 2000, the Company awarded Michael Nobel, Gerhard W.
Sennewald, and J. Gordon Short each options to purchase 25,000 shares of the
Company's restricted common stock at $1.11 per share. These directors were also
paid $2,000 and awarded 3,053 shares of restricted common stock, based on
service to the Company for the prior six months.
Paul F. Turner and Hyrum A. Mead are the only members of the Board who
are employed by the Company. Mssrs. Turner and Mead do not receive any separate
compensation for services performed as directors, except as described below. In
fiscal year 1999, the Company awarded Hyrum A. Mead 200,000 options to purchase
shares of the Company's restricted common stock at $0.37 per share under the
Company's 1998 Employee Stock Option Plan. These options will expire on August
10, 2009. In fiscal year 2000, the Company awarded Hyrum A. Mead options to
purchase 200,000 shares of the Company's restricted common stock at $0.81 per
share under the Company's 1998 Employee Stock Option Plan. These options will
expire on January 18, 2010. The Company did not award Mr. Turner any options in
fiscal years 1999 or 2000.
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BENEFICIAL OWNERSHIP
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The following table sets forth, as of November 1, 2000, the beneficial
ownership of our outstanding common stock by:
o each of our executive officers,
o each of our directors, and
o all executive officers and directors as a group.
As of November 1, 2000, we are not aware of any person other than those
persons shown below who held five percent or more of our outstanding common
stock. Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, and generally includes voting or investment
power with respect to securities. For purposes of calculating the percentages
shown in the chart, each person listed is deemed to beneficially own any shares
issuable on the exercise of vested options and warrants held by that person that
are exercisable within 60 days after November 1, 2000. Except as indicated by
footnote, the persons named in the table have sole voting and investment power
with respect to all shares of common stock shown beneficially owned by them. The
inclusion of any shares as beneficially owned does not constitute an admission
of beneficial ownership of those shares. The percentage calculation of
beneficial ownership is based on 17,464,520 shares of common stock outstanding
as of November 21, 2000.
<PAGE>
<TABLE>
<CAPTION>
Name of Beneficial Owner, Common Stock Beneficially Owned
Title of Class Relationship to Us Shares Percent
Officers and Directors
<S> <C> <C> <C>
Common Stock Dr. Gerhard W. Sennewald(1) 6,784,459 38.59%
Common Stock Hyrum A. Mead(2) 40,000 *
Common Stock Paul F. Turner(3) 1,995,871 11.31%
Common Stock Dr. J. Gordon Short(4) 125,873 *
Common Stock Dr. Michael Nobel(5) 63,873 *
Holders of More Than 5%
Common Stock John E. Langdon(6) 1,295,010 7.42%
Common Stock All Executive Officers and Directors as a Group 9,010,076 50.4%
(5persons)(7)
</TABLE>
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*Less than 1.0%.
1 Includes 117,065 shares subject to options. Does not include 500,000 shares
held by Dr. Sennewald's spouse, for which he disclaims beneficial ownership.
2 All 40,000 shares are subject to options
3 Includes 180,953 shares subject to options.
4 Includes 55,000 shares subject to options.
4 Includes 20,000 shares subject to options.
5 Includes 351,862 shares owned directly by Mr. Langdon. The remaining shares
are held in trusts for which Mr. Langdon is Trustee. Does not include 50,000
shares held by Mr. Langdon's spouse, for which he disclaims beneficial
ownership.
6 Includes 413,018 shares subject to options.
<PAGE>
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COMPENSATION OF EXECUTIVE OFFICERS
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The following table summarizes the compensation paid to or earned by
Mssrs. Turner and Mead during each of the past two fiscal years ended August 31,
1999 and 2000. None of the Company's other executive officers' total annual
salary and bonus exceeded $100,000.
<TABLE>
<CAPTION>
Summary Compensation Table
---------------------------- -------- ---------------------------------------------------- ------------------------
Annual Compensation Long-Term Compensation
Awards
---------------------------------------------------- ------------------------
Other Annual Securities Underlying
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) Options / SARs (#)
---------------------------- -------- ---------------- ---------------- ------------------ ------------------------
<S> <C> <C> <C> <C> <C>
Paul Turner 2000 $143,757 $ 100 - -
Chairman of the Board, Senior 1999 140,000 $ 100 - -
Vice President, Chief 1998 128,543
Technology Officer
---------------------------- ------- ---------------- ---------------- ------------------ ------------------------
Hyrum A. Mead 2000 $125,000 $ 100 200,000
President, Board Member 1999 $5,689(1) 200,000
------------------------------- -------- ---------------- ---------------- ------------------ ------------------------
</TABLE>
1 Mr. Mead began employment with the Company on August 10, 1999.
The following table presents additional information concerning the
option awards made during fiscal year 2000 to each of our named executive
officers:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
------------------------- ------------------------------------- --------------------- --------------------------------
Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option
Term
------------------------- ------------------------------------- --------------------- --------------------------------
Percent
of
Total
Number of Options Market
Securities Granted Price
Underlying to Emp. Exercise on
Options in of Base Grant
Name Granted Fiscal Price Date Expiration
# Year ($/ Sh) ($/ Sh) Date 0%($) 5%($) 10% ($)
------------------------- ---------------- --------- ---------- --------- ----------- -------------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Hyrum A. Mead 200,000 -54.05 $.81 $.88 Jan. 18, $12,000 $100,000 $200,000
2010
------------------------- ---------------- --------- ---------- --------- ----------- -------------------- -----------
</TABLE>
The intrinsic value of the grant to Mr. Mead as of the date of such
grant was $ 12,000.
The following table summarizes the exercise of stock options during
fiscal year 2000 by each of our named executive officers, and the fiscal
year-end value of unexercised stock options held by each of them:
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
----------------------------------------------------------------------------------------------------------------------
Shares Number of Securities Underlying Value of Unexercised
Acquired on Value Unexercised Options at FY-end (#) In-the-Money Options at FY-end ($)
Name and Exercise Realized =================================== =================================
Position (#) ($) Exercisable Unexercisable Exercisable Unexercisable
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Hyrum A. Mead, 0 0 40,000 360,000 $34,000 $218,000
President
-------------------------------------------------------------------------------------------------------------------------
Paul F. Turner, 0 0 180,953 0 $202,667 0
Sr. VP and Chief
Technology Officer
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Mr. Mead dated
August 10, 1999. This agreement provides that Mr. Mead shall receive an annual
base salary of $125,000, which shall be reviewed annually by the Board of
Directors. The agreement provides that if Mr. Mead is involuntarily terminated,
Mr. Mead will receive severance compensation for a period of six months,
including an extension of all benefits and perquisites. The six month severance
shall be equal to Mr. Mead's regular salary for the 12 month period immediately
prior to the termination. The agreement also requires the Company to vest any
options granted to Mr. Mead for the purchase of the Company's common stock,
allowing a 90 day period for Mr. Mead to exercise those options. Mr. Mead's
agreement includes a non-competition covenant prohibiting him from competing
with the Company for one year following his termination.
The Company entered into an employment agreement with Mr. Turner dated
November 2, 1988. The agreement provides that Mr. Turner's salary will be based
upon a reasonable mutual agreement. The agreement provides that if Mr. Turner's
employment is involuntarily terminated, he will receive severance pay for a one
year period, which pay includes an extension of all of his rights, privileges
and benefits as an employee (including medical insurance). The one year
severance pay shall be equal to Mr. Turner's regular salary for the 12 month
period immediately prior to the termination. The agreement also requires the
Company to pay Mr. Turner for any accrued unused vacation at the time of
termination. The Company is also obligated to pay Mr. Turner $1,000 (or the
equivalent value in stock options) for each newly issued patent obtained by the
Company as a result of Mr. Turner's efforts (Mr. Turner receives only $500 if
multiple inventors are involved). Mr. Turner's agreement includes a
non-competition covenant prohibiting him from competing with the Company for one
year following his termination. The Company may continue the non-competition
period for up to four additional years by notifying Mr. Turner in writing and by
continuing the severance payments for the additional years during which the
non-competition period is extended.
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CERTAIN TRANSACTIONS
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The following information summarizes certain transactions in which we
engaged in during the past two years or in which we propose to engage in
involving our executive officers, directors, 5% shareholders or immediate family
members of those persons:
During the fiscal years ended August 31, 1999 and 2000, the Company
made sales of $291,000 and 884,000 to Medizin-Technik GmbH, a distribution
company controlled by Dr. Sennewald. Further, as of August 31, 2000, none of the
Company's inventory was on consignment to Medizin-Technik GmbH. The Company has
executed a distribution agreement with Medizin-Technik, GmbH on terms
substantially equivalent to the terms of distribution agreements the Company has
with other entities. In addition, the Company issued to Dr. Sennewald a
fully-paid and exclusive license to utilize certain of the Company's patented
technology within Europe in exchange for $15,000 and the payment of all European
maintenance fees, translation and filings fees, and defense costs incurred in
connection with the underlying patents. The license is effective for such period
as Dr. Sennewald remains actively involved in distributing of the Company's
products in Europe, and is actively marketing the Company's products in Europe.
<PAGE>
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COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT
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Section 16(a) of the Securities Exchange Act of 1934 requires our
executive officers and directors, and persons who own more than ten percent of a
registered class of our equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC"). SEC
regulation requires executive officers, directors and greater than ten percent
shareholders to furnish us with copies of all Section 16(a) forms they file.
Based solely on our review of the copies of such forms received by us, or
written representations from certain reporting persons, we believe that during
fiscal 2000 our executive officers, directors, and greater than ten percent
shareholders complied with all applicable filing requirements.
<PAGE>
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SHAREHOLDER PROPOSALS
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The rules of the Securities and Exchange Commission provide that
shareholder proposals may be considered for inclusion in the proxy material for
our annual meetings under certain circumstances. Our bylaws provide that any
shareholder proposals for director nominations for our annual meeting in 2000
must be made in writing and delivered to us not less than 60 days nor more than
90 days prior to that meeting, but if we provide you with less than 70 days
notice (or public disclosure) of the meeting, nominations will be deemed timely
if they are received not more than 10 days following the date of the notice or
the public disclosure of the meeting. Any such nominations need to be
accompanied by specific information regarding the nominees, as described in our
bylaws. Shareholder proposals should be addressed to: BSD Medical Corporation,
2188 West 2200 South, Salt Lake City, Utah 84119, Telephone (801) 972-5555,
attention: Dixie Toolson Sells, Secretary.
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OTHER MATTERS
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The Board does not presently intend to bring any other business before
the meeting, and, we know of no other matters that are to be brought before the
meeting except as specified in the notice of the meeting. If any additional
business properly comes before the meeting, however, your shares will be voted
in accordance with the judgment of the persons voting your proxy.
By Order of the Board of Directors
___________________________________
Dixie Toolson Sells, Secretary
Salt Lake City, Utah
December 21, 2000
All shareholders are urged to complete, sign, date and return the
accompanying proxy card in the enclosed postage-paid envelope. Thank you for
your prompt attention to this matter.
