SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. )
Filed by 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 Rule 14a-11(c) or Rule 14a-12
(Name of Registrant as Specified In Its Charter)
COMPUTRAC, INC.
___________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, If Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
___________________________________________________________________________
(2) Aggregate numer of securities to which transactions 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:
___________________________________________________________________________
(2) Form, Schedule or Registration Statement No:
___________________________________________________________________________
(3) Filing Party:
___________________________________________________________________________
(4) Date Filed:
___________________________________________________________________________
<PAGE>
COMPUTRAC, INC.
222 Municipal Drive
Richardson, TX 75080
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held July 14, 2000
To the Stockholders of CompuTrac, Inc:
Notice is hereby given that the 2000 Annual Meeting of Stockholders of
CompuTrac, Inc., a Texas corporation (the "Company"), will be held on
Friday, July 14, 2000, at the Company's offices, 222 Municipal Drive,
Richardson, Texas 75080 beginning at 10:00 a.m. local time for the following
purposes:
1. To elect five (5) persons to the Company's Board of Directors
to hold office until their terms shall expire and until their
successors are duly elected and qualified.
2. To transact such other business as may properly come before
the meeting and any adjournment(s) thereof.
Stockholders of record at the close of business on May 26, 2000, are
entitled to notice of, and to vote at, the Annual Meeting and any
adjournment(s) thereof.
You are cordially invited to attend the meeting. Whether or not you
expect to be present at the meeting, please date and sign the enclosed Proxy
and return it promptly in the enclosed envelope. Returning the proxy will
not affect your right to revoke it and vote your shares in person if you
attend the meeting.
By Order of the Board of Directors
/s/ Dana E. Margolis
-----------------------
Dana E. Margolis
Secretary and Treasurer
Richardson, Texas
June 5, 2000
<PAGE>
COMPUTRAC, INC.
222 Municipal Drive
Richardson, TX 75080
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of CompuTrac, Inc., a Texas corporation (the
"Company"), of proxies from the holders of the Company's Common Stock, par
value $.01 per share (the "Common Stock"), for use at the 2000 Annual
Meeting of Stockholders to be held on Friday, July 14, 2000, at the
Company's offices, 222 Municipal Drive, Richardson, Texas 75080, beginning
at 10:00 a.m. local time.
The approximate date that this Proxy Statement and the enclosed form of
Proxy are first being sent to stockholders is June 5, 2000. Stockholders
should review the information provided herein in conjunction with the
Company's Annual Report for the fiscal year ended January 31, 2000 which
accompanies this Proxy Statement. The Annual Report does not form a part of
this Proxy Statement and is not intended to serve as soliciting material for
the Proxy.
INFORMATION CONCERNING PROXY
The solicitation is made on behalf of the Board of Directors of the
Company. By executing and returning the enclosed Proxy card, you authorize
the persons named in the Proxy to represent you and vote your shares in
connection with the purposes set forth in the Notice of Annual Meeting.
All shares represented by a valid Proxy received prior to the meeting
will be voted in accordance with any specification made on such Proxy. Any
stockholder giving a Proxy has the power to revoke it at any time before it
is exercised by submitting a notice of revocation to the Company or by
attending the meeting and voting in person.
The cost of preparing, assembling and mailing the enclosed material will
be borne by the Company. In addition to solicitation by mail, employees of
the Company may, without additional compensation, solicit Proxies on behalf
of the Board of Directors by telephone, telegraph or personal interview.
The Company may make arrangements with banks, brokerage houses and other
custodians, nominees and fiduciaries to send Proxies and Proxy material to
their principals and to request authority for the execution of Proxies. The
Company may reimburse such persons for their expenses in so doing.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's stockholders will consider and vote
upon the following matters:
1. To elect five (5) persons to the Company's Board of Directors
to hold office until their terms shall expire and until their
successors are duly elected and qualified.
2. To transact such other business as may properly come before
the meeting and any adjournment(s) thereof.
<PAGE>
Unless contrary instructions are indicated on the enclosed Proxy, all
shares represented by valid Proxies received pursuant to this solicitation
(and which have not been revoked in accordance with the procedures set forth
above) will be voted for the election of the five nominees for director
named below. In the event a stockholder specifies otherwise by means of the
enclosed Proxy, those shares will be voted in accordance with the
specification so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on May 26, 2000 as
the record date (the "Record Date") for determining stockholders of the
Company entitled to notice of and to vote at the Annual Meeting. As of the
Record Date, there were 6,312,429 shares of the Company's $.01 par value
Common Stock issued and outstanding, all of which are entitled to vote at
the Annual Meeting. Only stockholders of record at the close of business on
the Record Date are entitled to vote at the meeting or any adjournment
thereof, each share being entitled to one (1) vote on each matter to be
voted on at the Annual Meeting. All shares of Common Stock will vote as a
single class and there are no cumulative voting rights.
The attendance, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum. If less than a majority of
outstanding shares entitled to vote are represented at the Annual Meeting, a
majority of the shares represented may adjourn the Annual Meeting to another
date, time or place, and notice need not be given of the new date, time or
place if the new date, time or place is announced at the meeting before an
adjournment is taken.
Prior to the Annual Meeting, the Company will select one or more
inspectors of election for the meeting. Such inspector(s) shall determine
the number of shares of Common Stock represented at the meeting, the
existence of a quorum and the validity and effect of proxies, and shall
receive, count and tabulate ballots and votes and determine the results
thereof. Abstentions will be considered as shares present and entitled to
vote at the Annual Meeting, but will not be counted as votes cast for or
against any given matter.
The inspector or inspectors of election will treat shares referred to as
"broker or nominee non-votes" (shares held of record by brokers or nominees
as to which instructions have not been received from the beneficial owners
or persons entitled to vote and which the broker or nominee has not voted
because it does not have discretionary voting power on a particular matter)
as shares that are present for purposes of determining the presence of a
quorum. For purposes of determining the outcome of any matter as to which
the proxies reflect broker or nominee non-votes, shares represented by such
proxies will be treated as not entitled to vote on that matter and therefore
will not be considered by the inspectors when counting votes cast on the
matter (even though those shares are considered present for quorum purposes
and may be entitled to vote on other matters).
Directors will be elected by a plurality of the votes cast by holders of
shares of Common Stock present in person or represented by proxy at the
Annual Meeting. Thus, any abstentions or broker or nominee non-votes will
have no effect on the outcome of the election of directors.
<PAGE>
SECURITY OWNERSHIP
The following table sets forth, as of May 26, 2000, information with
respect to the beneficial ownership of the Common Stock of the Company by
(a) the Company's Chief Executive Officer and each of the other "Named
Executive Officers" (as defined below in "Executive Compensation - Summary
Compensation Table"), (b) each person known by the Company to own
beneficially 5% or more of such outstanding Common Stock, (c) each director
or nominee who owns any shares, and (d) all current executive officers and
directors of the Company as a group.
<TABLE>
Name and Address of Beneficial Amount and Nature of
Owner (1) Beneficial Ownership of Class (2) Percent
------------------------------ --------------------------------- -------
<S> <C> <C>
Harry W. Margolis 2,212,877 (3) 33.7
Dana E. Margolis 28,217 (4) (5)
D. Bruce Walter 283,711 (6) 4.3
Gerald D. Harris 12,000 (7) (5)
Kenneth R. Nicholas 28,000 (8) (5)
All current directors and executive 2,886,267 (9) 40.9
officers (10 persons) as a group
____________________________
</TABLE>
(1) Unless otherwise indicated, each person's address is 222 Municipal
Drive, Richardson, TX 75080.
(2) Unless otherwise indicated, each person has sole voting and investment
power with respect to such shares.
(3) Includes 250,000 shares Mr. Margolis has the right to acquire through
the exercise of options. Mr. Margolis may be deemed to be the
beneficial owner of the shares owned by his wife, Dana E. Margolis.
(4) Dana E. Margolis may be deemed to be the beneficial owner of the shares
owned by her husband, Harry W. Margolis.
(5) Beneficial ownership is less than one percent (1%) of the Company's
outstanding shares.
(6) Includes 212,000 shares Mr. Walter has the right to acquire through the
exercise of options.
(7) Represents 12,000 shares Mr. Harris has the right to acquire through
the exercise of options.
(8) Includes 18,000 shares Mr. Nicholas has the right to acquire through
the exercise of options.
(9) Includes 748,335 shares the directors and executive officers have the
right to acquire through the exercise of options.
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than
ten percent of the Company's outstanding Common Stock, to file with the
Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Common Stock. Such persons are
required by SEC regulations to furnish the Company with copies of all such
reports they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company during the Company's last fiscal year,
all Section 16(a) filing requirements applicable to its officers, directors
and greater than ten percent beneficial owners have been complied with.
ELECTION OF DIRECTORS
Directors are to be elected at the Annual Meeting to hold office until
the next Annual Meeting of Stockholders and until their successors have been
duly elected and qualified. The Company's Articles of Incorporation provide
that the number of directors constituting the Company's Board of Directors
shall not be less than two, but will be fixed as determined in the manner
provided by the Company's Bylaws. The Company's Bylaws provide that the
number of directors shall be fixed from time to time by action of the
Company's Board of Directors. The Board of Directors has fixed the number
of directors at five for the ensuing year. The Board of Directors currently
consists of five persons.
It is intended that the shares represented by the Proxies will be voted
for the election of the Company's nominees except where authority to so vote
is withheld. Each of the five current members of the Board of Directors has
been nominated by the Company to be reelected as a director at the Annual
Meeting. All of the nominees for directorship have agreed to serve if
elected. Should any of such nominees become unwilling or unable to accept
nomination or election, the shares represented by the Proxies solicited
hereby will be voted for any substitute nominee or nominees designated by
the present Board of Directors or the number of directors will be reduced
accordingly.
The Board of Directors recommends that you vote FOR the election of
each of the five nominees to the Board of Directors.
<PAGE>
MANAGEMENT
<TABLE>
Executive Officers and Directors
The executive officers and directors of the Company at May 26, 2000 are
as follows:
Position(s) Held
Name Age With the Company
---- --- ----------------
<S> <C> <C>
Harry W. Margolis 57 Chairman of the Board & Chief
Executive Officer
Dana E. Margolis 55 Secretary, Treasurer & Director
D. Bruce Walter 57 President & Director
Roger P. Young 38 General Manager - Operations
Lynda K. Thomas 54 Vice President _ Administration
David D. Hester 44 Vice President - CT Labs
Irwin S. Arnstein 41 Vice President - LFMS Support and
Development
Michael R. Mueller 48 Vice President _ LFMS for Windows
Development
Kenneth R. Nicholas 58 Director
Gerald D. Harris 44 Director
</TABLE>
Harry W. Margolis is a co-founder of the Company and has served as
Chairman of the Board of the Company since its organization in 1977. After
graduating from U.C.L.A. in 1964 with a degree in Political Science, Mr.
Margolis attended Southern Methodist University Law School and upon
graduation in 1967, placed first in the Bar Examination administered in the
State of Texas. Mr. Margolis founded his own law firm in 1967, which
increased to eight members through internal growth and by merger with an
older firm, and practiced law until the Company was organized in 1977.
Dana E. Margolis, a director since 1983, served as office manager of
the Company performing its accounting and purchasing functions from 1980
until 1983. In January 1984, Mrs. Margolis assumed the responsibilities of
Secretary and Treasurer of the Company. Mrs. Margolis attended San Diego
State University and is the wife of Harry W. Margolis.
D. Bruce Walter was elected to the Board of Directors in July, 1998,
and has served as the Company's President since January, 1999. He is also
on the board of directors of HQ/HR Corporation headquartered in St. Louis,
Missouri and two Dallas based companies, SPS Management Corporation and
Connex Systems Corporation. Mr. Walter previously held the position of
Chairman and Chief Executive Officer at Radiomail Corporation, a wireless
internet company headquartered in San Mateo, California, from October 1994
to July 1997. He was President and Chief Executive Officer of CoActive
Computing Corporation, located in California, from July 1993 until October
1994. Mr. Walter was at Grid Systems Corporation, also located in
California, from June 1983 to June 1993, where he was President and Chief
Executive Officer from 1991 to 1993. Prior to 1983, Mr. Walter spent
sixteen years in various management-level positions at Xerox Corporation.
He is a 1965 graduate of Waynesburg College.
<PAGE>
Roger P. Young was named General Manager _ Operations in June, 1998,
previously holding the title of Director of Operations since 1996. In his
current position, Mr. Young is responsible for the daily management of
operations for the company. He joined CompuTrac in 1991 as Production
Manager and held subsequent management positions in finance and accounting.
His previous experience includes production and operations management
positions for Westcott Communications, Inc. and Sarkes Tarzian, Inc. Mr.
Young currently serves on the Board of Directors of Richardson Development
Center for Children.
Lynda K. Thomas was elected Vice President of Administration in
December 1987. Ms. Thomas joined the Company in September 1981 as Executive
Assistant to the President and served as the Company's Business Manager from
August 1983 until her election to Vice President. Previously, she was a
corporate officer and director of public relations for Republic Gypsum
Company, a Dallas based manufacturer and supplier of building materials.
She attended the University of North Texas in Denton, Texas majoring in
education. Ms. Thomas currently serves on the Board of Directors of Altrusa
International of Collin County.
David D. Hester has served as the Company's senior computer programmer
since June 1979 and has been responsible for the Company's major software
research and development efforts. He was elected Vice President of the
Company's CT Labs department in April 1996. Previously he served as an
assembly-language programmer for General Computer Systems, a division of
Telex. Mr. Hester attended the University of Texas at Arlington and is an
honor graduate of Control Data Institute.
Irwin S. Arnstein was elected Vice President of LFMS Support and
Development of the Company in May 1996 and is responsible for the design,
implementation and support of the Company's Law Firm Management System
product line. Mr. Arnstein holds a 1981 Bachelor of Arts of Computer
Science degree from the University of Texas. Mr. Arnstein began his career
with the Company 16 years ago as a Software Engineer and has served as a
Project Leader on several significant software projects leading up to his
1995 promotion to Director of LFMS Development.
Michael R. Mueller joined the Company in October 1984 as a support
programmer and was elected Vice President of Law Firm Management Systems
Development in May 1996. He has been involved in the development of four of
the Company's six generations of Law Firm Management Systems. Prior to
joining the Company, Mr. Mueller graduated from Texas A&M University
majoring in Computer Science with a minor in Accounting.
Kenneth R. Nicholas, a director of the Company since 1995, has been the
Senior Partner of Nicholas & Montgomery, LLP, a Certified Public Accounting
firm in Dallas, Texas since January, 2000. From January, 1987 until merging
his practice into Nicholas and Montgomery, he was the Managing Director of
Nicholas, Flanagan & Bard, P.C. Prior to that time, Mr. Nicholas spent 22
years with Deloitte Haskins & Sells (now Deloitte & Touche), including over
ten years as a partner and seven years as partner-in-charge of the Dallas
tax practice. Mr. Nicholas graduated from Southern Methodist University in
1964.
Gerald D. Harris, a director of the Company since 1994, is the owner
and operator of Harris Typesetting Services, a graphics design and printing
business located in Plano, Texas. Prior to beginning his business in 1990,
Mr. Harris was the head golf professional at the prestigious Stonebriar
Country Club in Frisco, Texas. Mr. Harris attended the University of
Oklahoma majoring in finance.
<PAGE>
Meetings of the Board of Directors
During the fiscal year ended January 31, 2000, the Board of Directors
held one meeting and acted by unanimous written consent two times. No
director attended less than 75% of the aggregate of (a) the number of Board
meetings held during the fiscal year, and (b) the number of meetings of
committees of the Board held during the period he served on such committees.
Committees of the Board of Directors
The Company's Board of Directors has standing Compensation and Audit
Committees. The Compensation Committee consists of Messrs. Harris and
Nicholas. The Compensation Committee administers the Company's Stock Option
and Stock Purchase Plans, and makes recommendations to the Board with
respect to changes in officers' compensation and similar matters. The
Compensation Committee met once during fiscal year 2000.
The Company's Audit Committee consists of Messrs. Harris and Nicholas.
The Audit Committee reviews the Company's significant accounting policies
and operating controls, recommends independent external auditors, and
reviews audit reports prepared by the external auditors. The Audit
Committee met one time during fiscal year 2000.
The Company does not have a standing nominating committee.
Director Compensation
The Company pays directors who are not executive officers of the
Company $750.00 for attendance at each meeting of the Board of Directors and
$300.00 for each committee meeting attended. Directors who are also
executive officers of the Company do not receive any meeting fees or other
remuneration for their services as directors.
Directors are also eligible to be granted stock options under the
Company's 1999 Stock Option Plan. The plan provides for the grant of
options to employees and directors of the Company covering an aggregate of
500,000 shares of Common Stock of the Company. Such options may be
incentive or nonqualified stock options, except that options granted to
directors who are not also employees of the Company may not be incentive
stock options. Options granted to directors under the plan may contain such
terms as may be determined by the Compensation Committee, except that (i)
the maximum term of any option is 10 years, (ii) no director may be granted
options in any calendar year for a number of shares exceeding 10% of the
total number of shares for which options may be granted under the plan,
(iii) shares acquired by a director upon exercise may not be sold for six
months after the date of grant, and (iv) the exercise price of any option
granted to a director may not be less than the fair market value of the
Common Stock on the date of grant. The exercise period of any option begins
and ends on such dates as may be determined by the Compensation Committee,
provided that an option will terminate upon the termination of the holder's
service as an employee or director, subject to certain grace periods. The
vesting of outstanding options is also subject to acceleration in the
discretion of the Compensation Committee or upon the occurrence of certain
change-in-control events.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the aggregate compensation paid to the
Company's Chief Executive Officer and the only other officer whose total
annual salary and bonus for the 2000 fiscal year was $100,000 or more (the
"Named Executive Officers"), with respect to each of the three fiscal years
in the period ended January 31, 2000.
<TABLE>
Annual Long-Term
Compensation (1) Compensation Awards
---------------- -------------------
Number of Securities All Other
Fiscal Underlying Options Compen-
Name and Principal Position Year Salary ($) Granted ation ($)
--------------------------- ------ ---------- ------- ---------
<S> <C> <C> <C> <C>
Harry W. Margolis 2000 398,500 - 4,063 (2)
Chairman of the Board and 1999 546,000 621,000 (3) 6,156
Chief Executive Officer 1998 542,250 - 5,948
D. Bruce Walter 2000 120,339 100,000
President
________________________
</TABLE>
(1) The columns for "Bonus" and "Other Annual Compensation" have been
omitted because there is no compensation required to be reported in
such column. The aggregate amount of perquisites and other personal
benefits provided to the Company's Chief Executive Officer is less than
the lesser of $50,000 or 10% of the total of annual salary and bonus of
the officer.
(2) Represents the economic value of split-dollar life insurance policies
paid for by the Company naming Mr. Margolis' estate as the beneficiary.
(3) Of the options granted, 108,000 were cancelled November 14, 1998 in
connection with an option grant of 333,000 shares on the same date.
Option Grants Table
The following table sets forth information regarding stock options
granted to the Named Executive Officers during fiscal 2000.
<TABLE>
Percentage of
Total Options
Number of Granted to Exercise
Securities Underlying Employees in or Base Expiration
Name Options Granted (#) Fiscal Year Price ($/Sh) Date
--------------- ------------------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
D. Bruce Walter 100,000 (1) 50.1% $0.875 01/03/2005
</TABLE>
________________________
(1) The options were granted January 3, 2000 and are fully vested.
<PAGE>
Option Exercises and Aggregated Fiscal Year-End Option Value Table
The following table sets forth certain information concerning option
exercises by the Named Executive Officers during the fiscal year and
unexercised stock options held by the Named Executive Officers as of the end
of the 2000 fiscal year.
<TABLE>
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at 2000 Fiscal In-the-Money Options
Acquired Value Year-End Exercisable (E) at 2000 Fiscal
Name On Exercise (#) Realized ($) (1) Unexercisable (U) Year-End ($) (2)
----------------- --------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Harry W. Margolis 83,000 $99,600 250,000 (E) / -0- (U) $425,000
D. Bruce Walter 212,000 (E) / -0- (U) $291,500
</TABLE>
________________________
(1) Represents the market value of underlying securities at the exercise
date, minus the aggregate exercise price of the options. The market
price of the Common Stock on the date of exercise of the option shown
in the table did not exceed the exercise price.
(2) Represents the market value of the Common Stock at January 31, 2000
minus the exercise price of the option, multiplied by the number of
shares exercisable under the option.
Report on Repricing of Options
On November 14, 1998, the Compensation Committee and the Board of
Directors approved a resolution canceling incentive stock options previously
granted to Mr. Margolis entitling him to purchase 225,000 shares of Common
Stock at an exercise price of $1.52 per share and 108,000 shares of Common
Stock at an exercise rice of $.90 per share. Concurrently, Mr. Margolis was
granted a new incentive stock option covering 333,000 shares of Common Stock
with an exercise price of $0.55 per share, which was equal to 110% of the
fair market value of the Common Stock on the date of grant. The repricing of
the stock options granted Mr. Margolis were done in connection with a
voluntary restructuring of his compensation, based on the Board's
determination that a larger percentage of Mr. Margolis' compensation should
be represented by incentive awards and a smaller percentage by his annual
salary. The Compensation Committee believes the cancellation of the old
options and grant of the new options to Mr. Margolis was in the best
interests of the Company and its stockholders because it provides additional
incentive to Mr. Margolis to use his best efforts to improve the value of
the Company's stock.
Submitted by: The Compensation Committee
Kenneth R. Nicholas
Gerald D. Harris
<PAGE>
Long-term Incentive and Pension Plans
The Company does not have any long-term incentive or pension plans.
Employment Agreements
On January 1, 1998, the Company entered into an Employment Agreement
with Harry W. Margolis, its Chairman of the Board and Chief Executive
Officer, which expires on December 31, 2002. On November 14, 1998, the
Employment Agreement was modified to reduce Mr. Margolis' base salary by
$30,000 and $200,000 for calendar years 1998 and 1999, respectively.
Pursuant to the Employment Agreement in effect during fiscal 2000, Mr.
Margolis was paid an annual base salary of $398,500. In January 2000, Mr.
Margolis' contractual base salary for the calendar year 2000 was reduced by
the amount of $319,000. Accordingly, Mr. Margolis is entitled to a base
salary of $296,000 plus a cost of living adjustment during calendar 2000.
Under the current Employment Agreement, Mr. Margolis is entitled to receive
minimum annual raises equivalent to any annual increase in the Consumer
Price Index for Dallas, Texas during the previous year. In addition, at the
discretion of the Compensation Committee of the Board of Directors of the
Company, Mr. Margolis may be considered for an annual bonus in an amount
that does not exceed his salary. No bonuses were granted to Mr. Margolis
during fiscal 2000. Additionally, the Company furnishes Mr. Margolis with
certain fringe benefits, including the use of an automobile and a membership
in a country club. The Company is obligated to provide Mr. Margolis and his
family with health and dental benefits and has purchased split-dollar life
insurance policies insuring Mr. Margolis' life and naming his estate as the
beneficiary. In the event that Mr. Margolis becomes disabled or is
otherwise incapacitated, the Company will be entitled to reduce his pay to
50% of his base salary (less certain insurance proceeds) for the remainder
of the term of the Employment Agreement or until such earlier time that he
is able to resume his full duties under the agreement. In the event of Mr.
Margolis' death, his estate or designated beneficiary is entitled to receive
50% of his annual salary, less any insurance payments made to the estate or
designated beneficiary from the above-referenced life insurance policies,
for the remaining term of the agreement. Mr. Margolis is subject to certain
restrictive covenants under the agreement, including a noncompetition clause
which extends eighteen months beyond any termination of his employment other
than termination by Mr. Margolis for "Good Reason" (as defined in the
agreement) or termination due to the expiration of the agreement. The
Company may at any time terminate the Employment Agreement for "Cause" (as
defined in the agreement) with thirty days written notice, and, in the event
that the Company fails to earn a certain specified minimum rate of return on
equity for any fiscal years ending on or after January 31, 1999, the
Company's Board of Directors may reduce the term of the agreement to a date
which is no earlier than one year from the date Mr. Margolis receives
written notice of such term reduction. If Mr. Margolis' employment is
terminated (a) other than for Cause, disability, death or the expiration of
the agreement, including a termination attributable to a "Change in Control"
(as defined in the agreement), or (b) by Mr. Margolis for Good Reason,
including any intentional failure by the Company to comply with the
agreement, Mr. Margolis will be entitled to (i) a lump sum payment of three
times (or two times if termination occurs during the last year of the
agreement) the sum of his base salary and highest bonus paid during either
of the prior two years, (ii) all compensation earned or deferred through the
date of termination (including a pro-rated bonus, determined as a percentage
of the prior year's bonus) and (iii) continue to participate in the
Company's benefit plans for the remainder of the term of the agreement, as
if the agreement had not terminated.
<PAGE>
OTHER MATTERS
Stockholder Proposals
Any stockholder intending to present any proposal for inclusion in the
proxy statement for the 2000 Annual Meeting of Stockholders must submit such
proposal in writing to the Company at its principal executive offices on or
before February 5, 2001.
Independent Public Accountants
The firm of Grant Thornton LLP served as independent public accountants
in connection with the audit of the Company's financial statements for the
fiscal year ended January 31, 2000 and has been selected to serve in that
capacity for the fiscal year ending January 31, 2001. A representative of
the firm is expected to be present during the annual meeting. Such
representative will be afforded an opportunity to make a statement at the
meeting if he so desires and will be available to answer appropriate
questions.
Other Business
The Board of Directors does not intend to present and does not have any
reason to believe that others in attendance will present at the Annual
Meeting any item of business other than those mentioned in the Notice of
Annual Meeting. If, however, any other business should properly come before
the Annual Meeting, the persons named in the accompanying Proxy will vote
the Proxy as in their discretion they may deem appropriate, unless they are
directed by the Proxy to do otherwise.
By Order of the Board of Directors
/s/ Dana E. Margolis
-----------------------
Dana E. Margolis
Secretary and Treasurer
Richardson, Texas
June 5, 2000
The Company's Form 10-KSB Annual Report, as filed with the Securities
and Exchange Commission, provides certain additional information about the
Company. A copy of this report may be obtained without charge upon written
request to: Investor Relations, CompuTrac, Inc., 222 Municipal Drive,
Richardson, Texas 75080 or via the company's website at: www.computrac.com
<PAGE>
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[PROXY CARD]
COMPUTRAC, INC. * 222 MUNICIPAL DRIVE * RICHARDSON, TX 75080
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a stockholder of CompuTrac, Inc., a Texas corporation (the
"Company"), hereby appoints Harry W. Margolis, Dana E. Margolis and Roger P.
Young, and each of them, with power of substitution, as proxies of the
undersigned, to vote the shares of stock of the Company held of record by
the undersigned as of the close of business on May 26, 2000, at the Annual
Meeting of Stockholders to be held on July 14, 2000, and all adjournments
thereof.
(1) [ ] FOR all nominees for [ ] WITHHOLD AUTHORITY to vote for
Directors listed below all nominees listed below
(except as marked to
the contrary below)
Harry W. Margolis, Dana E. Margolis, D. Bruce Walter, Gerald D. Harris and
Kenneth R. Nicholas
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
(2) Upon any other matter which may properly come before the Annual Meeting
in their discretion.
<PAGE>
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EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER
SPECIFIED HEREON AND, IN THE ABSENCE OF SPECIFICATION, WILL
BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTORS AND
FOR THE APPROVAL OF THE OTHER PROPOSAL LISTED ON THE REVERSE
HEREOF.
PLEASE SIGN AND RETURN PROMPTLY
Receipt of the Notice of Annual
Meeting and Proxy Statement is
hereby acknowledged.
Dated:___________________, 2000
_______________________________
Signature
_______________________________
Signature
IMPORTANT - Joint owners must
EACH sign. When signing as
attorney, trustee, executor,
administrator, guardian or
corporate officer, please give
your FULL title.
