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:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Dynamic Healthcare Technologies, Inc.
(Name of Registrant as Specified In Its Charter)
__________________________________________________________________________
(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 table below per Exchange Act Rules 14a-6(i)(4)
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:
[ ] 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:
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(4) Date Filed:
1
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of DYNAMIC HEALTHCARE TECHNOLOGIES, INC.:
The Annual Meeting of the Shareholders of DYNAMIC HEALTHCARE TECHNOLOGIES,
INC., a Florida corporation, (the "Company") will be held at the Hilton Garden
Inn at 705 Currency Circle, Lake Mary, FL 32746 on June 8, 2000, at 1:30 p.m.
Eastern Standard Time, for the following purposes:
1. To elect five (5) persons as directors for a term of one year. The
slate proposed by the Board of Directors is set forth in the
accompanying Proxy Statement.
2. To vote on the proposal of the Board of Directors that BDO Seidman,
LLP, independent public accountants, be engaged as auditors for the
Company for the fiscal year ending December 31, 2000.
3. To vote on the proposal of the Board of Directors to amend the terms
of the 1993 Incentive Stock Option Plan, creating a new 2000
Incentive Stock Option Plan and increasing the shares issuable
pursuant to the new plan by 1,000,000 shares.
4. To vote on the proposal of the Board of Directors to increase the
authorized common shares available to fulfill the employer matching
contribution to the employee 401K plan by 200,000 shares.
5. To consider and transact any other business which may properly come
before the meeting or any adjournment thereof.
The Board of Directors has designated April 25, 2000, as the record date
for the determination of shareholders entitled to notice of and to vote at such
meeting or any adjournment thereof. Only shareholders of record at the close of
business on April 25, 2000, will be entitled to notice of and to vote at the
meeting.
You are cordially invited to attend the meeting. Whether or not you plan
to attend, please mark, sign, date and mail the enclosed proxy, which requires
no postage if mailed in the United States.
Your attention is called to the accompanying Proxy Statement.
By Order of the Board of Directors
Paul S. Glover
Vice President Finance,
Chief Financial Officer and
Secretary
Dynamic Healthcare Technologies, Inc.
615 Crescent Executive Court, Fifth Floor
Lake Mary, FL 32746
2
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS JUNE 8, 2000
This Proxy Statement is furnished to shareholders of DYNAMIC HEALTHCARE
TECHNOLOGIES, INC., a Florida corporation, (the "Company") in connection with
the solicitation on behalf of the Board of Directors of proxies for use at the
Annual Meeting of Shareholders to be held on June 8 2000, and at any adjournment
thereof, for the purposes set forth in the accompanying Notice of Annual Meeting
of Shareholders.
The address of the principal executive office of the Company is 615
Crescent Executive Court, Fifth Floor Lake Mary, FL 32746. This Proxy
Statement and form of Proxy were mailed to shareholders of the Company on
approximately May __, 2000.
SOLICITATION AND REVOCATION OF PROXIES
The costs and expenses of solicitation of proxies will be paid by the
Company. In addition to the use of mails, proxies may be solicited by
directors, officers and regular employees of the Company personally or by
facsimile machine, telegraph or telephone.
Proxies in the form enclosed are solicited on behalf of the Board of
Directors. Any shareholder given a proxy in such form may revoke it any time
before it is voted at the meeting, by executing a subsequent proxy or by notice
to the Secretary of the Company at the Company's principal address as
set forth above. Such proxies, if received in time for voting and not revoked,
will be voted at the annual meeting in accordance with the specifications
indicated thereon. If no instructions are indicated, proxies will be voted (i)
"FOR" the election of the five (5) persons named herein as nominees for election
to the Board of Directors; and (ii) at the discretion of the proxy holders of
record for any other matter that may properly come before the meeting or any
adjournment thereof. The Board of Directors is not aware that any matter other
than those described in the Notice of Annual Meeting of Shareholders to which
this Proxy Statement is appended will be presented for action at the meeting.
VOTING RIGHTS AND PROCEDURE
Only shareholders of record at the close of business on April 25, 2000
("Entitled Shareholders"), are entitled to execute proxies or to vote at the
annual meeting. As of March 31, 2000, there were 18,880,508 shares of the
Company's common stock, par value $.01 per share (the "Common Stock")
outstanding. Each holder of Common Stock is entitled to one vote for each share
held with respect to the matters mentioned in the foregoing Notice of Annual
Meeting of Shareholders and any other matters that may properly come before the
meeting, other than the election of directors, in which shareholders may
cumulate their votes, (see "Election of Board of Directors"). A majority of
the outstanding shares are required to constitute a quorum at the meeting.
Abstentions and broker non-votes are counted as shares eligible to vote at the
Annual Meeting of Shareholders in determining whether quorum is present, but do
not represent votes cast with respect to any proposal.
PROPOSAL NUMBER ONE (1) - ELECTION OF BOARD OF DIRECTORS
Five (5) Directors are to be elected at the annual meeting to serve until
the 2001 annual meeting of shareholders and until their successors are elected
and qualified. The Board of Directors has no reason to believe that any of the
nominees will be unable to serve as a director. If, prior to the meeting, any
nominee ceases to be a candidate for election because the nominee is unable to
serve, or for good cause will not serve, it is the intention of the individuals
named as proxies to vote for the election of such person or persons as the Board
of Directors may, in its discretion, recommend.
Shareholders have cumulative voting rights in connection with the election
of directors. Each entitled Shareholder may cast a number of votes equal to the
number of shares of Common Stock owned multiplied by the number of directors to
be elected five (5). Those votes may be distributed among all the nominees
equally, or divided among any number of the nominees in such proportion as the
shareholder may desire. The five (5) nominees who receive the greatest number
of votes will be elected.
3
Unless authority is withheld in the proxy, the persons named in the
enclosed form of proxy will cast the votes of the proxied shares to elect the
six nominees hereinafter named. These shares may be voted cumulatively so that
one or more of the nominees may receive fewer votes than the other nominees (or
no votes at all), if such action is considered necessary or desirable by the
proxy holders. The Board of Directors recommends a vote "FOR" election of the
nominees listed below.
NOMINEES FOR ELECTION TO BOARD OF DIRECTORS
<TABLE>
Nominee and Director
Principal Occupation Age Since Other Directorships Held
<S> <C> <C> <S>
Jerry L. Carson 59 1993 None
Executive Vice President and
Chief Financial Officer
Evans Enterprises
Mitchel J. Laskey, C.P.A. 50 1994 Alliance Bankshares, Inc.,
President and Chief Executive Officer a bank holding company,
Dynamic Healthcare Technologies, Inc. Optio Software, Inc.
(Nasdaq: OPTO)
Thomas J. Martinson 50 1986 None
President
Martinson & Company, Ltd.
Bret Maxwell 41 1996 Shopnow.com (Nasdaq: SPNW)
Co-Chief Executive Officer
First Analysis Corporation
Daniel Raynor 40 1996 NuCo2, Inc. (Nasdaq: NUCO)
Managing Partner and COMFORCE Corporation
The Argentum Group (Nasdaq: CFS)
</TABLE>
Jerry L. Carson has been Chairman of the Board of Directors since 1999, and
Director of the Company since January 1993. Mr. Carson has been Executive Vice
President and Chief Financial Officer of Evans Enterprises, a property
management and real estate development firm in Bedford, New Hampshire, since
1990. Mr. Carson was Executive Vice President and Chief Financial Officer of
Playboy Enterprises, Inc. from 1988 to 1990 and held the positions of Vice
President of Corporate Development and Treasurer of Baxter International from
1980 to 1986.
Mitchel J. Laskey has been Chief Executive Officer since May 1996,
President, Chief Operating Officer and Treasurer since August 1994 and a
Director since December 1994. From 1992 to 1994, Mr. Laskey was Chairman and
Chief Executive Officer of Dynamic Technical Resources, Inc., which was
acquired by the Company in August 1994. From 1985 to 1991, Mr. Laskey was a
principal or managing partner in various entrepreneurial investments and also
acted as a volunteer officer for a not-for-profit social agency. From 1983
through 1985, Mr. Laskey was Executive Vice President of Dynamic Control
Division of Baxter International and, from 1980 until its sale to Baxter
International in 1983, was the Executive Vice President of Dynamic Control
Corporation, a healthcare information systems company. Mr. Laskey has been a
licensed certified public accountant since 1974 and is a member of the American
and Florida Institutes of Certified Public Accountants.
Thomas J. Martinson has been a Director of the Company since 1986. He also
was the Company's Chairman of the Board from 1986 until 1996 and Secretary from
1986 until 1994. Mr. Martinson has been President of Martinson & Company, Ltd.
of Wayzata, Minnesota, an investment banking firm, since 1985.
Bret R. Maxwell has been a Director of the Company since May 1996. Mr.
Maxwell is Co-Chief Executive Officer of First Analysis Corporation, a
securities investment firm that he joined in 1982. Mr. Maxwell is also on the
Board of Shopnow.com, as well as a director for numerous privately-held
companies.
4
Daniel Raynor has been a Director of the Company since May 1996. He is a
Managing Partner of The Argentum Group, a private venture capital investment
firm, a position he has held since 1987. He also serves as a general partner of
Argentum's affiliated investment partnerships. Mr. Raynor serves
on the Board of Directors of NuCo2, Inc. and COMFORCE Corporation, both
publicly-traded companies, and several privately-held companies. He received a
B.S. in economics from The Wharton School, University of Pennsylvania.
DYNAMIC HEALTHCARE TECHNOLOGIES, INC. BOARD OF DIRECTORS
The business of the Company is managed under the direction of its Board.
The Board of Directors meets periodically to review significant developments
affecting the Company and to act on matters requiring its approval. The Board
of Directors held eleven meetings during 1999. All members attended 75% or more
of the meetings of the Company's Board of Directors except Mr. Guy Rabbat who
did not attend either of the two meetings scheduled during his tenure in 1999.
The Compensation and Incentive Stock Option Committee of the Company's
Board of Directors currently consists of Daniel Raynor, Thomas J. Martinson and
Bret R. Maxwell. Mr. Raynor is the Committee's chair. The Committee's primary
responsibilities are to formulate and recommend to the Board of Directors the
compensation package for the Company's President and Chief Executive Officer;
to formulate and recommend to the Board of Directors the terms of the Company's
Management Incentive Compensation Plan; to recommend approval of and administer
any other employee compensation and incentive plans; and to periodically review
and make recommendations on the Company's general salary administration plan.
The Committee held four meetings during 1999, which were attended by all its
members.
The Audit Committee of the Company's Board of Directors currently consists
of Thomas J. Martinson, Jerry L. Carson and Bret R. Maxwell. Mr. Maxwell is
the Committee's chair. The Audit Committee recommends to the Board of Directors
the appointment of the firm selected to be independent auditors for the Company
and monitors the performance of such firm; reviews and approves the scope of
the annual audit and evaluates with independent auditors the Company's annual
audit and annual financial statements; reviews the status of internal accounting
controls with management; evaluates problem areas having a potential financial
impact on the Company which may be brought to its attention by management, the
independent auditors or the Board of Directors; and evaluates all public
financial reporting documents of the Company. The Audit Committee held three
meetings during 1999, which were attended by all of its members.
The Company's Board of Directors appointed a Special Evaluation Committee
in September 1999, consisting of Jerry L. Carson and Bret Maxwell. The purpose
of the Committee was to hold strategic discussions with potential industry
partners and to report back to the full Board of Directors. The Committee held
three meetings during 1999, which were attended by all of its members.
The Company's Board of Directors appointed a Selection Committee in October
1999, consisting of Jerry L. Carson (Chair), Thomas J. Martinson and Bret R.
Maxwell, for the purpose of reviewing recommendations regarding the retention of
an executive search firm. The Committee held three meetings during 1999, which
were attended by all of its members.
The Company's Board of Directors appointed a Special Committee in December
1999, consisting of Jerry L. Carson (Chair), Thomas J. Martinson, Bret R.
Maxwell and Daniel Raynor, for the purpose of reviewing and reporting on matters
concerning Mr. David M. Pomerance's separation from the Board of Directors. The
Committee held two meetings during 1999, which were attended by all of its
members.
In March 1999, the Company's Board of Directors appointed a Nominating
Committee consisting of David M. Pomerance (Chair), Thomas J. Martinson and Bret
R. Maxwell, for the purpose of recommending Board of Director nominees for the
1999 annual meeting. The Committee held one meeting in 1999, which was attended
by all of its members.
The Company's Board of Directors currently does not have a Nominating
Committee. The functions customarily attributable to a Nominating Committee are
performed by the Board of Directors as a whole. The Board of Directors will
consider nominees recommended by security holders. For a security holder to
recommend a nominee to the Board, the security holder must contact a member of
the Board by mail in care of the Company and supply the following information:
-- The security holder's name, address and phone number.
-- The number of shares of the Company's Common Stock held by the security
holder.
-- The name, address, phone number and brief biography of the nominee
recommended by the security holder.
5
-- A statement by the security holder as to why he or she believes the
recommended nominee should be nominated to stand for election to the
Company's Board of Directors.
The Board of Directors will consider any nominee recommended by any
security holder as long as such recommendation is received at least six months,
but no longer than twelve months, prior to the next regularly scheduled annual
meeting of shareholders.
EXECUTIVE OFFICERS
The names, ages and positions of the Company's executive officers are:
<TABLE>
Name Age Officer Position
<S> <C> <S>
Jerry L. Carson 59 Chairman of the Board
Mitchel J. Laskey 50 President, Chief Executive Officer,
Treasurer and Director
Paul S. Glover 41 Vice President - Finance, Chief Financial
Officer, and Secretary
Steven J. Akerson 50 Vice President and General Manager,
Laboratory and Imaging
Michael A. Pomerance 34 Vice President and General Manager,
Radiology
Jonathan P. Fingado 31 Vice President and General Manager,
Pathology
</TABLE>
See Nominees For Election To The Board Of Directors for Jerry L. Carson and
Mitchel J. Laskey.
Paul S. Glover has been Vice President - Finance and Chief Financial
Officer of the Company since December 1994, Secretary since July 1996 and was
Director of Financial Operations from August 1994 through December 1994. Mr.
Glover was the Executive Vice President of Uniprompt Microsystems, Inc.
and President of its wholly owned subsidiary, Unisoft, Inc., from August 1990
through July 1994. Mr. Glover served as a Certified Public Accountant with the
national firms of Main Hurdman and Company (now part of KPMG Peat Marwick LLP),
and Deloitte, Haskins and Sells (now part of Deloitte & Touche LLP).
Steven J. Akerson has been Vice President and General Manager of the
Company's Laboratory and Imaging Group since September 1999. Since joining the
Company in August 1994, Mr. Akerson has held a number of positions including
Vice President of Clinical Products and Vice President of Corporate Operation.
Mr. Akerson has been in the information systems business for 29 years, with the
last 17 in healthcare.
Michael A. Pomerance has been Vice President and General Manager of the
Company's Radiology Business Unit since September 1999. Since joining the
Company in 1994 Mr. Pomerance has held various positions principally in the
sales and marketing departments. In September 1997, Mr. Pomerance was
the Director of Sales for the Laboratory Products, and during 1999 he was the
Sales Area Vice President for Laboratory and Imaging Systems.
Jonathan P. Fingado has been Vice President and General Manager of the
Company's Pathology Group since September 1999, having joined the Company in
connection with the acquisition of Collaborative Medical Systems, Inc. (CoMed)
in December of 1996. Mr. Fingado's tenure with CoMed began in 1991 and
he held several positions in operations and development.
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 1, 2000,
with respect to each class of the Company's equity securities beneficially owned
by each director, director nominee, by each person known to the Company to
beneficially own more than 5% of the Company's outstanding classes of voting
stock (i.e. Common Stock), by executive officers, and by all officers and
directors as a group.
Series C Preferred Stock **
<TABLE>
Name and Address Amount and Nature of Percentage
of Beneficial Owner Beneficial Ownership of Class
<S> <C> <C>
Riverside Partnership 640,000 64.00 %
233 South Wacker Dr., Suite 9500
Chicago, IL 60606
Argentum Capital Partners, LP 290,000 29.00 %
405 Lexington Avenue, 54th Floor
New York, NY 10174
Bret R. Maxwell (1) 640,000 64.00 %
233 South Wacker Dr., Suite 9500
Chicago, IL 60606
Daniel Raynor (2) 610,000 61.00 %
c/o The Argentum Group
405 Lexington Avenue, 54th Floor
New York, NY 10174
Paul S. Glover 2,500 *
1312 Winter Springs Boulevard
Winter Springs, FL 32708
All Directors and Officers as a Group 937,500 93.75 %
(4 Persons)
</TABLE>
* Less than 1%
** Series C Preferred Stock is non-voting unless dividends are in arrears for
two calendar quarters. As of the established record date of April 25,2000
the Series C Preferred Stock is non-voting.
(1) By reason of Mr. Maxwell's status as the ultimate general partner of
Riverside Partnership, amount includes 640,000 Series C Preferred Shares
owned by Riverside Partnership.
(2) Includes indirect beneficial ownership of Argentum Capital Partners, LP
("ACP") 290,000 and 50% of Riverside Partnership's ("Riverside"), Series C
Preferred Shares by reason of Mr. Raynor's status as controlling person of
ACP and general partner of Riverside.
7
<TABLE>
Common Stock
Name and Address Amount and Nature of Percentage
of Beneficial Owner Beneficial Ownership** of Class
<S> <C> <C>
Riverside Partnership(1) 2,542,200 12.91 %
233 South Wacker Dr., Suite 9500
Chicago, IL 60606
Walter Barandiaran (2) 2,685,850 12.49 %
245 East 93rd Street, Apt. 26D
New York, NY 10128
Daniel Raynor (3) 2,650,850 12.33 %
c/o The Argentum Group
405 Lexington Avenue, 54th Floor
New York, NY 10174
Bret R. Maxwell (4) 2,595,600 12.11 %
233 South Wacker Dr., Suite 9500
Chicago, IL 60606
First Analysis Corporation (5) 2,542,200 11.87 %
233 South Wacker Dr., Suite 9500
Chicago, IL 60606
Oliver Nicklin (6) 2,542,200 11.87 %
233 South Wacker Dr., Suite 9500
Chicago, IL 60606
State of Wisconsin 1,550,000 8.22 %
Post Office Box 7842
Madison, WI 53707
Mitchel J. Laskey (7) 1,371,855 7.02 %
2332 Alaqua Drive
Longwood, FL 32779
BancAmerica Robertson, Stephens & Co. (8) 1,271,100 6.31 %
405 Lexington Avenue, 54th Floor
New York, NY 10174
Schneur Z. Genack (9) 1,271,100 6.31 %
405 Lexington Avenue, 54th Floor
New York, NY 10174
Argentum Environmental Corporation (10) 1,271,100 6.31 %
405 Lexington Avenue, 54th Floor
New York, NY 10174
Argentum Capital Partners, LP(11) 1,155,750 6.01 %
405 Lexington Avenue, 54th Floor
New York, NY 10174
8
Thomas J. Martinson (12) 161,500 *
140 Barry Avenue North
Wayzata, MN 55391
Jerry L. Carson (13) 59,500 *
Portofino Tower PH4003
300 South Pointe Drive
Miami Beach, FL 33139
Paul S. Glover (14) 83,191 *
1312 Winter Springs Boulevard
Winter Springs, FL 32708
All Directors and Officers as a Group
(13 Persons) 5,824,462 24.57 %
</TABLE>
* Less than 1%
** Shares not actually outstanding are deemed to be beneficially owned by an
individual if such individual has the right to acquire the shares within 60
days.
(1) Includes 640,000 shares of Common Stock issuable upon conversion of the
Series C Preferred Stock owned by Riverside Partnership, and 192,000 shares
of Common Stock that Riverside Partnership may acquire upon the exercise of
Common Stock purchase warrants.
(2) Includes 42,000 shares of Common Stock owned by Mr. Walter Barandiaran
through his individual retirement account, and 42,000 shares of Common
Stock held by an individual retirement account for the benefit of his
spouse and controlled by Mr. Barandiaran pursuant to a power of attorney.
Additionally, by reason of Mr. Barandiaran's status as controlling persons
of Argentum Capital Partners, LP ("ACP"), The Argentum Group ("TAG"), and
the general partner of Riverside Partnership (Riverside), the table
includes indirect beneficial ownership by him of 1,155,750 shares of Common
Stock owned by ACP, 1,271,100 shares (50%) of Common Stock owned by
Riverside and 175,000 additional shares of Common Stock which may be
acquired by TAG upon the exercise of Common Stock purchase warrants.
(3) Includes 27,500 shares of Common Stock that Mr. Daniel Raynor may acquire
upon the exercise of Common Stock purchase warrants. Additionally, by
reason of Mr. Raynor's status as controlling person of ACP, TAG and the
general partner of Riverside Partnership (Riverside), the table includes
indirect beneficial ownership by him of 1,155,750 shares owned by ACP,
1,271,100 shares (50%) of Common Stock owned by Riverside, and 175,000
additional shares which may be acquired by TAG upon the exercise of Common
Stock purchase warrants.
(4) Includes 27,500 shares of Common Stock that Mr. Maxwell may acquire upon
the exercise of Common Stock purchase warrants. Additionally, by reason of
his status as the ultimate general partner of Riverside Partnership
(Riverside), Mr. Bret R. Maxwell may be deemed to be the indirect
beneficial owner of 2,542,200 shares of the Common Stock owned by
Riverside.
(5) By reason of its status as an ultimate general partner of Riverside
Partnership (Riverside), First Analysis Corporation ("FAC") may be deemed
to be the indirect beneficial owner of 2,542,200 shares of the Company's
Common Stock owned by Riverside.
(6) By reason of Mr. Oliver Nicklin's status as the majority stockholder of
FAC, the ultimate general partner of Riverside Partnership (Riverside),
includes 2,542,200 shares of Common Stock of Riverside attributed to Mr.
Nicklin as the indirect beneficial owner.
(7) Includes 670,500 shares of Common Stock that Mr. Mitchel J. Laskey may
acquire upon the exercise of Common Stock purchase warrants.
9
(8) By reason of BancAmerica Robertson, Stephens & Company's status as ultimate
general partner of Riverside Partnership (Riverside), includes 1,271,100
shares (50%) of Common Stock owned by Riverside attributed to BancAmerica
Robertson, Stephens & Co. as the indirect beneficial owner.
(9) By reason of Schneur Z. Genack's status as ultimate general partner of
Riverside Partnership (Riverside), includes 1,271,100 shares (50%) of
Common Stock owned by Riverside attributed to Schneur Z. Genack as the
indirect beneficial owner.
(10) By reason of Argentum Environmental Corporation's status as ultimate
general partner of Riverside Partnership (Riverside), includes 1,271,100
shares (50%) of Common Stock owned by Riverside attributed to Argentum
Environmental Corporation as the indirect beneficial owner.
(11) Includes 290,000 shares of Common Stock issuable upon conversion of the
Series C Preferred Stock owned by Argentum Capital Partners, LP, and 87,000
shares on Common Stock that Argentum Capital Partners, LP may acquire upon
the exercise of Common Stock purchase warrants.
(12) Includes 10,000 shares held by Ms. Joan Martinson. Thomas and Joan
Martinson are husband and wife. Also includes 29,000 shares of Common
Stock that Mr. Thomas J. Martinson may acquire upon exercise of Common
Stock purchase warrants.
(13) Includes 7,000 shares of Common Stock that Mr. Jerry L. Carson may acquire
upon the exercise Common Stock purchase warrants.
(14) Includes 1,746 shares held by Ms. Gail Glover. Paul and Gail Glover are
husband and wife. Also includes 62,250 shares of Common Stock that Mr.
Paul Glover may acquire upon the exercise of Common Stock purchase
warrants, and 2,500 shares of Common Stock issuable upon conversion of the
Series C Preferred Stock owned by Mr. Glover.
10
EXECUTIVE COMPENSATION
Report of Compensation Committee
The Compensation Committee is charged with the formulation and oversight of
the Company's general compensation policies and plans, including those for its
executive officers. The Committee consists of Daniel Raynor, its chair, Thomas
J. Martinson and Bret R. Maxwell, all of whom are independent members of the
Company's Board of Directors.
The Company's general compensation policies are designed to attract and
retain exceptional employees at all levels of the organization. Specific
policies exist for members of the Company's sales organization to incent those
people to increase the Company's operating revenues. Additional policies for
certain of the Company's executives and other key employees focus those
employees' energies on the Company's long-term strategies for growth,
profitability and enhancement of shareholder value. The principal elements of
these policies are:
Base Salary: Base salaries are set for all employees through the use
of a compensation matrix which identifies ranges of salaries for each job
level as well as performance standards within each level. The matrix is
adjusted annually for changes in the Consumer Price Index, and is designed
to provide employees receiving positive performance reviews with a base
salary approximating the 75th percentile among salaries for similar
positions within the Company's peer group. The Committee annually reviews
the salaries of executives in relation to this matrix and in conjunction
with the executives' performance reviews and with the salaries suggested by
the President and CEO.
Sales Commissions: The Company provides direct sales representatives
and sales management personnel with commissions in addition to their base
salary. The commissions are paid on the achievement of certain sales goals
under the Company's Sales Policy and Commission Plans which are administered
by the President and CEO, and the product line Vice President and General
Managers.
Management Incentive Compensation: Executive officers and managers of
the Company are eligible to receive cash incentives under the Company's
Management Incentive Compensation (MIC) Plan which is administered by the
President and CEO under the direction of the Compensation Committee. Awards
under this Plan may be recommended annually by the President and CEO, and
require the approval of the Compensation Committee.
Incentive Stock Option Plan: As additional incentive for the
Company's executives and other key employees to build shareholder value,
stock options have been awarded under the Company's 1983 and 1993 Incentive
Stock Option Plans. Under provisions of the Internal Revenue Code, options
granted under these Plans are considered "Incentive Stock Options." The
Compensation Committee functions as the Company's Incentive Stock Option
Committee and is responsible for approving all awards under these Plans.
Grants of options under the 1983 Plan are no longer allowed as that Plan has
expired. Grants under the 1993 Plan, which was approved by the shareholders
in 1993, are permitted until 2003.
Director and Management Stock Warrant and Option Plan: In order to
attract and incent directors and key managers of the Company, options and
warrants for the Company's Common Stock may be granted under the Company's
Director and Management Stock Warrant and Option Plan which was approved by
the shareholders in 1993. Grants under this Plan are made under the
direction of the Compensation Committee and are "non-qualified" as that term
is defined in the Internal Revenue Code.
Employee Stock Purchase Plan: The Company adopted the Employee Stock
Purchase Plan in 1993 for the purpose of encouraging full time employees to
become shareholders in the Company. Employees pay for their shares through
voluntary payroll deductions. This Plan qualifies for favorable tax
treatment to employees under Section 421 and 423 of the Internal Revenue
Code.
401(k) Plan: The Company's 401(k) Plan authorizes the Board of
Directors to establish periodic employer matching contributions to the
accounts of employees making qualifying elective deferrals. During 1999,
the 401(k) Plan employer match was established by the Company's Board of
Directors at 30% of qualifying employee contributions. Also during 1999,
the Company's Board of Directors recommended and shareholders approved
payment of this match in common stock of the Company.
Dynamic Healthcare Technologies, Inc. Compensation and
Stock Option Plan Committee
Daniel Raynor, Chairman
Thomas J. Martinson
Bret R. Maxwell
11
Summary Compensation Table
The following table is a summary of the annual, long term, and other
compensation of the Company's Chief Executive Officer and the Company's six most
highly compensated executives other than the Chief Executive Officer during
1999.
<TABLE>
Long-Term Compensation
Annual Compensation Awards Payouts
Securities
Other Annual Underlying LTIP All Other
Name and Principal Salary Bonus Compensation Options/SARs Payouts Compensation
<S> <C> <C> <C> <C> <C> <C> <c
Position Year ($) ($)(6) ($) (#) ($)(4) ($)(2)
Jerry L. Carson
1999 --- --- $1,215(1) --- --- ---
Chairman of the Board
Mitchel J. Laskey
1999 $300,000 $100,000 $67,900(1) --- --- $3,000
Director, President
and CEO 1998 $300,000 --- $15,000(1) 497,500(3) --- $3,000
1997 $275,000 $ 50,000 $15,000(1) 50,000(3) $ 29,169 $2,850
Paul S. Glover
1999 $154,687 $ 85,000 $22,176(1) 75,000(5) --- $3,000
VP Finance,1998 $150,000 --- --- 95,000(5) --- $3,000
Secretary, 1997 $135,000 $ 25,000 --- 20,000(5) --- ---
and CFO
Steven J. Akerson
1999 $133,125 $ 40,000 --- 45,000(5) --- $3,000
VP and General
Manager- 1998 $123,433 $ 10,000 --- 20,000(5) --- $3,000
Laboratory and
Imaging 1997 $108,750 --- --- 15,000(5) --- $2,850
Michael Pomerance
1999 $102,500 $ 16,500 $97,720(10) 28,500(5) --- $ 615
VP and General
Manager-Radiology
Jonathan P. Fingado
1999 $ 59,885(7)$13,500 --- 25,000(5) --- $9,041(8)
VP and General
Manager-Pathology
Scott E. Waldrop
1999 $152,000 --- $218,662(9) 25,000(5) --- ---
Sr. Vice President
and 1998 $192,435 --- --- 150,000(5) --- $1,980(8)
COO (9)
Michael L. Carlay
1999 $101,889 --- $218,805(9) 15,000(5) --- $2,412
Senior VP Sales
and 1998 $151,109 --- $ 59,432(10) 150,000(5) --- $3,000
Marketing(9)1997$ 91,604 $ 7,500 --- 150,000(5) --- $ 563
</TABLE>
(1) Includes amounts paid as car allowance, club dues, travel related payments
and other compensation.
(2) Includes Company contributions to the individual employees 401(k)
Retirement Plan.
(3) Options awarded pursuant to employment agreements.
(4) Represents amounts paid under a deferred compensation agreement with
Mitchel J. Laskey assumed in connection with the acquisition of Dynamic
Technical Resources, Inc. Final payments under this agreement were made
during 1997.
(5) Options awarded under the Company's Incentive Stock Option Plan.
(6) Includes management incentive compensation bonuses.
(7) Represents compensation paid Mr. Fingado during 1999 following employment on
August 11, 1999.
(8) Includes taxable moving expense reimbursements.
(9) The Company's Board of Directors accepted the resignations of Mr. Waldrop
and Mr. Carlay, effective September 30, 1999. Other annual compensation
includes severance and Sales Commission Plan compensation paid.
(10)Compensation paid under Company's Sales Commission Plan.
12
OPTION GRANTS DURING 1999
The following table sets forth information relative to employment stock
options granted to the named officers during 1999. The Company has not granted
any stock appreciation rights.
<TABLE>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grant for Option Term
Number of Percent of
Securities all Options
Underlying Granted to Exercise
Options Employees Price Per Expiration Grant Date
Name Granted in 1999 Share Date Market Price 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C> <C>
Paul S. Glover 25,000(1) 4.6% $1.0000 1/08/09 $1.0000 $15,722 $ 39,844
50,000(1) 9.2% $1.5600 9/02/09 $1.5600 $49,054 $124,312
Steven J. Akerson 10,000(1) 1.8% $1.0000 1/08/09 $1.0000 $ 6,289 $ 15,937
10,000(1) 1.8% $2.2035 6/16/09 $1.5600 $13,858 $ 35,118
25,000(1) 4.6% $1.5600 9/02/09 $1.5600 $24,527 $ 62,156
Michael A. Pomerance 3,000(1) 0.6% $1.0000 1/08/09 $1.0000 $ 1,887 $ 4,781
500(1) 0.1% $1.1410 2/16/09 $1.1410 $ 359 $ 909
25,000(1) 4.6% $1.5600 9/02/09 $1.5600 $24,527 $ 62,156
Jonathan P. Fingado 25,000(1) 4.6% $1.5600 9/02/09 $1.5600 $24,527 $ 62,156
Scott E. Waldrop 25,000(1) 4.6% $1.0000 1/08/09 $1.0000 $15,722 $ 39,844
Michael L. Carlay 15,000(1) 2.7% $1.0000 1/08/09 $1.0000 $ 9,433 $ 23,906
(1) Options awarded under the Company's Incentive Stock Option Plan.
</TABLE>
AGGREGATED OPTION EXERCISES DURING 1999 FISCAL YEAR AND
YEAR END OPTION VALUES
The following table sets forth information relative to stock options
exercised by the Named Officers during 1999 and values of stock options held by
those officers that were outstanding at year end:
<TABLE>
Number of Number of
Securities Securities Value of Value of
Underlying Underlying Unexercised Unexercised
Number of Unexercised Unexercised In-The-Money In-The-Money
Shares Options at Options at Options at Options at
Acquired on Dollar Value Year-End Year-End Year-End Year-End
Name ExerciseRealizedExercisableUnexercisableExercisableUnexercisable
<S> <C> <C> <C> <C> <C> <C>
Jerry L. Carson 12,000 7,025 7,000 6,000 250 500
Mitchel J. Laskey 100,000 67,200 571,000 199,000 116,875 --
Paul S. Glover -- -- 52,250 132,000 5,219 23,657
Steven J. Akerson -- -- 41,000 61,500 3,438 10,063
Michael A. Pomerance -- -- 7,550 30,450 382 5,580
Jonathan P. Fingado -- -- -- 25,000 -- 3,188
Michael L. Carlay -- -- 7,500 -- -- --
Scott Waldrop 25,000 11,725 3,750 -- -- --
</TABLE>
13
MANAGEMENT INCENTIVE COMPENSATION PLAN
The Company has a Management Incentive Compensation ("MIC") Plan that is
administered by the President and CEO under the direction of the Compensation
and Incentive Stock Option Committee of the Board of Directors. Cash
distributions may be made annually based on the Company's overall financial
performance, the individual employee's performance against pre-determined
objectives, and discretionary amounts determined by the Committee. Company
executives, directors and managers, receive distributions from the pool which
are determined by the Compensation and Incentive Stock Option Plan Committee
based on recommendations from the Company's President and CEO. There was
$382,133 of MIC Plan benefits earned by employees participating in the Plan
during 1999.
EMPLOYMENT CONTRACTS
In August, 1999, the Company entered into an Employment Agreement with Paul
S. Glover to serve as Vice President of Finance, and Chief Financial Officer.
The term of the agreement extends through December 31, 2000 and provides for a
current base salary of $175,000 per annum, which is subject to annual review by
the Board of Directors and increases based on the Consumer Price Index. The
agreement contains a covenant not to compete for a period of 18 months after
termination. The severance arrangement included in the agreement provides that
upon the occurrence of a triggering event as defined in the agreement (including
a change in control), Mr. Glover is entitled to receive a lump-sum payment equal
to compensation for one year including annual bonus and employee benefits
for one year, plus the immediate vesting of all of his then outstanding stock
options, warrants and stock appreciation rights, if any, and the covenant not to
compete is reduced to six months.
Effective January 1, 2000, the Company entered into a two (2) year
employment agreement with Mitchel J. Laskey, President and CEO. The employment
agreement establishes a 2000 Compensation Plan (the "2000 Plan") effective for
the 2000 calendar year and provides Mr. Laskey an annual salary of $300,000.
The 2000 Plan provides for Target Bonuses and contains a covenant not to compete
for a period of 6 months after termination. The aggregate Target Bonus for 2000
is $100,000, payable $25,000 for each quarter, and will be earned by Mr. Laskey
based on quarterly achievements in pretax operating income. In addition, Mr.
Laskey is entitled to a Special Bonus of up to $100,000 as determined by the
Board of Directors upon the closing of a significant strategic transaction
involving an investment in or a new distribution channel for the Company. Upon
a change of control, Mr. Laskey is entitled to receive a lump-sum payment equal
to compensation for one year, including employee benefits for one year, plus the
immediate vesting of all of his then outstanding stock options, warrants and
stock appreciation rights, if any, and the Special Bonus.
OTHER COMPENSATION PLANS
1983 Incentive Stock Option Plan
The Company had an Incentive Stock Option Plan which expired March 1993
("1983 Plan"). The 1983 Plan allowed the Company, at its discretion, as
determined by a three member Stock Option Plan Committee appointed from the
members of the Board of Directors who were not eligible to participate
in the 1983 Plan, to grant incentive stock options to employees determined by
the Committee, for the purchase of Common Stock of the Company.
Under the 1983 Plan as of March 31, 2000, there were unexpired options
outstanding and unexercised for an aggregate of 1,500 shares of Common Stock.
As of March 31, 2000, the market value for the shares underlying these
unexercised options was approximately $3,094. The total proceeds the
Company would realize upon the exercise of all 1983 Plan options outstanding at
March 31, 2000, was $2,580. Options may be exercised for periods up to ten
years from date of grant or, in the case of holders of 10% or more of the
Company's Common Stock, five years from date of grant. The expiration
of the 1983 Plan does not effect the right of the holders to exercise unexpired
options under the Plan. The exercise price of the options granted under the
Plan may not be less than 100% of the fair market value of the Company's Common
Stock on the grant date or, in the case of holders of 10% or more of the
Company's Common Stock, 110% of the fair market value of the Company's Common
Stock at grant date. Options may be exercised to acquire 40% of the shares
subject to the option after one year, 30% of the shares subject to the option
after two years and 30% of the shares subject to the option vesting after three
years.
14
1993 Incentive Stock Option Plan
The Company adopted an Incentive Stock Option Plan in 1993 ("1993 Plan")
which is similar to the 1983 Plan. The 1993 Plan is managed by the Compensation
Committee appointed from members of the Board of Directors, who are not eligible
to participate in the 1993 Plan. As of March 31, 2000, under the 1993 Plan,
there were unexpired options outstanding and unexercised for shares an aggregate
of 1,287,124 shares of Common Stock. As of March 31, 2000, the market value for
the shares underlying these unexercised options was approximately $2,655,000.
The total proceeds the Company would realize upon the exercise of all 1993 Plan
options outstanding at March 31, 2000, was approximately $2,923,000. The terms
and vesting schedule of options granted under both the 1983 Plan and 1993 Plan
are the same.
Options granted under both the 1983 Plan and the 1993 Plan are "Incentive
Stock Options" pursuant to Section 422A of the Internal Revenue Code. Employees
do not recognize income at the time of the grant or exercise of an option.
Employees will recognize capital gain or loss, as the case may be, at the time
of the subsequent sale of the Common Stock issued upon the exercise of the
option. The Company will not recognize income at either the time of the option
grant or at the time of the exercise.
All full-time permanent Company employees are eligible to participate under
both Plans. Options may be exercised by payment of cash to the Company.
Director and Management Stock Warrant and Option Plan
The Company adopted the Director and Management Stock Warrant and Option
Plan ("D & M Plan") in 1993 for the issuance of stock purchase warrants and
stock options to directors, officers and key management employees of the
Company. Grants under the D & M Plan are made under the direction of the
Company's Compensation Committee. The purpose of the D & M Plan is to attract
and retain talented directors, officers and key management employees of the
Company.
The Company has reserved 650,000 shares of its Common Stock for issuance
upon the exercise of warrants and options granted under the D & M Plan. As of
March 31, 2000, there were unexpired D & M Plan warrants and options outstanding
and unexercised for shares totaling 229,500. The market value for shares
underlying these warrants and options was approximately $474,000 as of March 31,
2000. The total proceeds the Company would receive upon the exercise of these
warrants and options outstanding at March 31, 2000 were approximately $947,000.
Under the D & M Plan, warrants to directors are to be issued with an exercise
price equal to the average of the closing bid and ask prices of the Company's
Common Stock on the date of issuance. Options to employees and officers are
to be issued with an exercise price of no less than 85% of the fair market value
of the Company's Common Stock on the date of issuance.
The D & M Plan does not qualify under Section 401(a) of the Internal
Revenue Code of 1986, as amended. As such, warrant holders and optionees will
not realize income at the time of the warrant or option grant. They will
recognize ordinary compensation income at the time of the exercise of the
warrant or option to the extent of the difference of the exercise price and the
fair market value of the underlying Common Stock at the time of exercise.
Warrant holders and optionees will recognize either a capital gain or capital
loss at the time of the eventual sale of the Common Stock received on exercise,
computed as the difference between the sale price of the Common Stock and its
fair market value on the exercise date.
Employee Stock Purchase Plan
The Company adopted the Employee Stock Purchase Plan in 1993 for the
purpose of encouraging full-time employees to become shareholders in the
Company. The Company has reserved 600,000 shares of its Common Stock for
issuance pursuant to purchases under this Plan. Under this Plan as of March
31, 2000, 335,423 shares have been issued generating proceeds to the Company of
$560,723.
The price for stock purchased under this Plan will be the lesser of 85% of
the average bid and ask prices of the Company's Common Stock at the beginning of
and at the end of each six month purchase period. Employees pay for the shares
through payroll deductions. This Plan qualifies for favorable tax treatment to
employees under Sections 421 and 423 of the Internal Revenue Code.
15
COMPENSATION OF DIRECTORS
Under a policy established by the Company's Board of Directors, "outside
directors" are compensated at the rate of $500 plus expenses for each Board
meeting attended in person.
Outside directors also receive a five-year warrant for 25,500 shares of the
Company's Common Stock. The warrant is issued on the date of their first
election to the Board of Directors and the exercise price is equal to the
average of the closing bid and ask prices of the Company's Common
Stock on the date of issuance. Prior to June 14, 1995 these warrants vested
one-third upon issuance and one-third upon each of the first and second
anniversaries of the warrant. After June 13, 1995 these warrants were issued to
vest 40% upon issuance and 20% on each anniversary date for three subsequent
years. In addition, annual warrants are issued to certain outside directors
starting at the beginning of that director's third consecutive term in office as
an outside director of the Company. Each annual warrant is for 5,000 shares of
the Company's Common Stock, has a five year term and an exercise price
equal to the average of the closing bid and ask prices of the Company's Common
Stock on the date of issuance. Prior to June 14, 1995 these warrants vested
fully upon issuance. After June 13, 1995 these warrants were issued to vest 40%
upon issuance and 20% on each anniversary date for three subsequent years. With
certain exceptions, all outside director warrants expire upon the termination
of that director's service to the Company as a director.
Mr. Pomerance, the Company's former Chairman of the Board, received
$17,250 for such services during 1999. In addition, Mr. David Pomerance is
president of MMRI, Inc., which performed financial consulting and advisory
services to the Company. During the year ended December 31, 1999 the
Company paid $46,500 to MMRI, Inc. for such services.
Mr. Carson, the Company's current Chairman of the Board, is under a
contract for 2000 to receive $2,500 per month while serving in this capacity.
No director receives any additional compensation for services to the
Company as a member of any committee of the Board of Directors.
REPORTS BY INSIDERS UNDER SECTION 16
The following is a listing of the Company's directors, officers or
beneficial owners of more than 10% of the Company's Common Stock ("reporting
persons") who failed to file on a timely basis reports required under Section
16(a) of the Exchange Act during fiscal year 1999:
<TABLE>
Number of
Relationship to Number of Transactions Number of
Name of Insider the Registrant Late Reports Reported Late Forms Not Filed
<S> <s) <C> <C> <C>
Scott Waldrop Officer 2 3 0
</TABLE>
The Company is not aware of any other late or incorrect filing.
16
STOCK PERFORMANCE
The following chart compares the cumulative total shareholder return on the
Company's Common Stock based on the closing bid price of the Company's Common
Stock for the last five years ("Company Index"), with the cumulative total
returns for the Center for Research and Security Prices ("CRSP") total return
index for the NASDAQ Stockmarket-U.S. Companies Index ("Market Index") and the
CRSP NASDAQ Computer and Data Processing Services Stocks Index ("Peer Group")
over the same period. The comparison assumes $100 invested in the Company's
Common Stock and in each of the foregoing indices and assumes reinvestment of
dividends, if any. The stock price performance shown on the chart is not
necessarily indicative of future performance.
[GRAPH]
17
PROPOSAL NUMBER TWO (2) - CERTIFIED INDEPENDENT ACCOUNTANTS
An affirmative vote of at least a majority of the votes cast on this
proposal are required for approval. The Board of Directors is recommending to
the Company shareholders a vote "For" Proposal Number Two (2) to engage BDO
Seidman, LLP as independent public accountants for the Company for the
fiscal year ending December 31, 2000.
PROPOSAL NUMBER THREE (3) - INCENTIVE STOCK OPTION PLAN
The Company adopted an Incentive Stock Option Plan in 1983 (the "1983
Plan"), for key employees whereby 400,000 shares of common stock were reserved
for issuance thereunder. The Company currently has a 1993 Incentive Stock
Option Plan ("1993 Plan") , previously approved by shareholders, whereby
1,500,000 shares of common stock were reserved for issuance. Upon adoption of
the 1993 Plan no new options were to be granted under the 1983 Plan, although
options then outstanding continued to be exercisable subject to the terms of the
1983 Plan. The following summarizes activity under the 1983 and 1993 Plans as
of March 1, 2000:
<TABLE>
1983 Plan 1993 Plan
<S> <C> <C>
Shares Authorized 400,000 1,500,000
Options Exercised (118,240) (136,330)
Terminated Shares (278,760) 0
Options Outstanding (3,000) (1,132,244)
Issuable Options 0 231,426
</TABLE>
Proposal Number Three (3) - Incentive Stock Option Plan, proposes to
authorize an amendment to the 1993 Plan effectively creating a new 2000
Incentive Stock Option Plan ("2000 Plan"), and to increase the shares of common
stock reserved for issuance by 1,000,000 shares. All other terms and
provisions of the 1993 Plan would remain the same except:
* Outstanding 1993 Plan options would be governed by the 2000 Plan.
* Remaining issuable options under the 1993 Plan would be issuable by the
2000 Plan.
* The exercise restriction limiting the market value of shares issuable
during any calendar year to $100,000 would be amended to provide that
the market value of shares exercisable for the first time by any
employee during any calendar year may not exceed $100,000 to be in
compliance with Internal Revenue Service qualifications.
The Board of Directors believes this proposal to increase the total
issuable shares under the 2000 Plan to 2,500,000 from 1,500,000 and to amend
plan features as set forth above is needed to replace the expiring 1983 Plan, to
encourage full time employees, including officers, to become shareholders
of the Company, thereby providing incentive to remain in the Company's employ,
to improve operations, to increase profits, to provide a transition to the 1993
Plan and to contribute to the Company's success. Additionally, the Board of
Directors is recommending to the Company's shareholders a vote "FOR" Proposal
Number Three (3) adopting amendment to the 1993 Incentive Stock Option Plan
effectively creating a new 2000 Plan, and to increase the total issuable shares
pursuant to the new 2000 Plan to a total of 2,500,000. It will require the
affirmative vote of a majority of the shares represented at the meeting to adopt
the amendment to the 1993 Plan and create a new 2000 Plan as set forth by
Proposal Number Three (3).
PROPOSAL NUMBER FOUR (4) - MATCHING CONTRIBUTIONS TO THE 401(K) PLAN
The Company maintains a 401(k) plan (the "Plan") for the benefit of its
employees. The Plan document provides the Board of Directors with authorization
to determine the amount and form of annual employer matching contributions to
the Plan, if any. For 2000, the Company's Board of Directors authorized the
Company to make monthly matching contributions to the 401(k) Plan at the
rate of 30% of employee deferral amounts and to fund the employer matching
contributions to the Plan using common stock of the Company. Company matching
contributions were $420,487, $349,454 and $304,998 in 1997, 1998 and 1999,
respectively. In 1998, shareholders approved funding the employer
matching contributions to the Plan using Common Stock of the company, and
authorized 500,000 shares of Common Stock of the Company for this purpose. As
of March 1, 2000, 419,459 shares were issued to fund the Plan.
The Board proposes to reserve an additional 200,000 shares of Common Stock
for distribution to employees under matching contributions to the Company's
401(k) Plan instead of cash. It is intended that the Employer match
contributions will continue to be funded monthly in Common Stock of the
Company based on the months daily average high and low sales prices reported by
the NASDAQ for the month.
18
The Board of Directors believes that providing the Plan matching
contribution in the form of Company Common Stock is needed to encourage
employees, including Officers, to become shareholders of the Company, thereby
providing incentive to remain in the Company's employ, and further the
objectives of the Company to improve operations, to increase profits and to
contribute to the Company's success. In addition, it will reduce the Company's
cash commitments. An affirmative vote of at least a majority of the votes cast
on this proposal is required for approval. The Board of Directors recommends a
vote "FOR" Proposal Number Four (4) to reserving an additional 200,000 shares
of Common Stock for distribution to employees under the 401(k) Plan employer
matching contributions.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If
any other matters properly come before the meeting, the persons named in the
accompanying form of Proxy will vote, in their discretion, the shares they
represent.
STOCKHOLDER PROPOSALS
Stockholder proposals are eligible for consideration for inclusion in the
proxy statement for the 2001 Annual Meeting if they are received by the Company
before the close of business on December 31, 2000.
THE BOARD OF DIRECTORS
Dated: April __, 2000
19
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints MITCHEL J. LASKEY and JERRY L. CARSON, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of Common Stock of Dynamic Healthcare Technologies, Inc. held by
record by the undersigned on April __, 2000, at the annual meeting of
shareholders to be held on June 8, 2000, or any adjournment thereof.
1. ELECTION OF DIRECTORS
____ FOR all nominees listed below ____ WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees
listed below
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.
JERRY L. CARSON; MITCHEL J. LASKEY; THOMAS J. MARTINSON; BRET R.
MAXWELL; DANIEL RAYNOR
_________________________________________________________________________
2. To vote on the proposal of the Board of Directors that BDO Seidman, LLP,
independent public accountants, be engaged as auditors for the Company for
the fiscal year ending December 31, 2000.
____FOR ____AGAINST ____ABSTAIN
3. To vote on the proposal of the Board of Directors to amend the terms of
the 1993 Incentive Stock Option Plan, creating a new 2000 Incentive Stock
Option Plan and increasing the shares issuable pursuant to the new plan by
1,000,000 shares.
____FOR ____AGAINST ____ABSTAIN
4. To vote on the proposal of the Board of Directors to increase the
authorized common shares available to fulfill the employer matching
contribution to the employee 401K plan by 200,000 shares.
____FOR ____AGAINST ____ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed by
the undersigned shareholder. If no direction is made, this proxy will be voted
for Proposals 1 - 4.
The undersigned hereby revokes any proxies heretofore given by him and
confirms all that the Proxies may lawfully do by virtue hereof.
Dated: April __, 2000 _________________________________
Signature of Shareholder
PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY. Please sign name exactly as shown
IF YOUR ADDRESS OR ZIP CODE IS INCORRECT, hereon. Executors,
PLEASE CORRECT THE SAME BEFORE RETURNING. Administrators, Trustees, etc.
should give titles as such.
If Shareholder is a corporation,
sign full corporate name by duly
authorized officer.
20
