SCHEDULE 14A INFORMATION
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/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 Rule 14a-11(c) or Rule 14a-12
VERITEC, 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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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| VERITEC INC. |
| 1430 Orcla Drive |
| Golden Valley, MN 55427 |
| |
| THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS |
| |
| The undersigned hereby appoints Van Thuy Tran, as Proxy, with |
| authority to act and with the power to appoint her substitute, and |
| hereby authorizes her to represent and to vote, as designated below, |
| all the voting shares of common and preferred stock of Veritec Inc. |
| held of record by the undersigned on November 12, 1999, at the annual |
| meeting of shareholders to be held on December 20, 1999 or any |
| adjournment thereof. The "Abstain" category listed below is utilized |
| to determine the existence of a valid quorum. |
| |
| 1. ELECTION OF DIRECTORS For all nominees listed below (except as |
| marked to the contrary below) |
| |
| (INSTRUCTIONS: To withhold authority to vote for any individual |
| nominee, strike a line through the nominee's name in the list below.) |
| |
| Larry Matthews, Ms. Van Thuy Tran and Roger W. Bailey |
| |
|-----------------------------------------------------------------------------|
|-----------------------------------------------------------------------------|
| 2. PROPOSAL TO RATIFY THE SELECTION OF THE COMPANY'S INDEPENDENT |
| ACCOUNTANTS. |
| |
| [ ] FOR [ ] AGAINST [ ] ABSTAIN |
| |
| 3. In their discretion, the Proxy is 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 |
| herein by the undersigned stockholder. If no direction is made, this |
| Proxy will be voted FOR all nominees listed and FOR Proposal 2. |
| |
| Please sign exactly as names appears at left or complete name, address |
| and number of shares held if not provided. When signing as attorney, |
| as executor, administrator, corporation, please sign in full corporate |
| name by President or other authorized officer. If a partnership, |
| please sign in partnership name by authorized person. |
| |
| Dated:_____________________,1999 ___________________________________ |
| Signature |
| |
| |
| ___________________________________________ |
| Signature, (if jointly, both should sign) |
| |
| PLEASE MARK, SIGN, DATE AND RETURN THE PROXY |
| CARD PROMPTLY IN THE ENCLOSED ENVELOPE |
|-----------------------------------------------------------------------------|
<PAGE>
VERITEC INC.
1430 Orkla Dr.
Golden Valley, MN 55427
(612) 545-0224
___________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 20, 1999
____________________________________________
TO THE HOLDERS OF COMMON STOCK AND PREFERRED STOCK OF VERITEC INC.:
The 1999 Annual Meeting of Shareholders of Veritec Inc. (the "Company")
will be held at The Crystal Community Center, 4800 Douglas Drive North, Crystal,
MN 55429 at 2:00 P M., local time, on Monday, December 20, 1999 for the
following purposes:
1. To elect three directors of the Company to serve for the ensuing year
or until their successors are elected and qualified;
2. To consider and act upon a proposal to ratify the selection of
Callahan, Johnston & Associates, LLC, as the Company's independent
auditors for the fiscal year ended June 30, 2000; and
3. To transact such other business that may properly be brought before the
meeting or any adjournments thereof.
Only shareholders of record as shown on the books of the Company at the
close of business on November 12, 1999 will be entitled to receive notice of and
to vote at the meeting or any adjournments thereof.
You are cordially invited to attend the Annual Meeting. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SPECIFY YOUR CHOICES ON THE
ENCLOSED PROXY AND DATE, SIGN AND RETURN THE PROXY IN THE RETURN ENVELOPE
ENCLOSED FOR YOUR CONVENIENCE. Your cooperation in promptly signing and
returning your proxy will help avoid further solicitation expense to the
Company.
By order of the Board,
/s/ Jack E. Dahl
Jack E. Dahl
Secretary
Approximate date of mailing to shareholders:
November 24, 1999.
<PAGE>
PRELIMINARY PROXY PRELIMINARY PROXY
VERITEC INC.
1430 Orkla Drive
Golden Valley, MN 55427
(612) 545-0224
_________________________________
PROXY STATEMENT
for Annual Meeting of Shareholders
to be held on December 20, 1999
__________________________________
This Proxy Statement and the enclosed Proxy are being mailed to
shareholders on or about November 24, 1999, in connection with the solicitation
by the Board of Directors (the "Board") of proxies, in the accompanying form,
from holders of Veritec Inc. (the "Company's") common and preferred stock, to be
voted at the Annual Meeting of Shareholders to be held on Monday, December 20,
1999 and at any adjournment or adjournments thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Shareholders.
Proxies are being solicited by the mailing of this Proxy Statement and the
accompanying proxy to common and preferred shareholders of record who are
entitled to vote at the 1999 Annual Meeting. In addition, directors, officers,
and regular employees of the Company may, without compensation other than their
regular compensation, solicit proxies personally, by mail or by telephone. All
expenses of the solicitation will be borne by the Company, including the cost of
preparing, assembling and mailing the proxies and solicitation material. The
Company may reimburse brokerage firms and others for expenses incurred in
forwarding solicitation material to the beneficial owners of the Company's
common and preferred stock.
The inspectors of election appointed for the meeting will treat abstentions
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the approval of
any matter submitted to the stockholders for a vote. If the broker indicates on
a proxy that the broker does not have discretionary authority as to certain
shares to vote on a particular matter, such shares will not be considered as
present and entitled to vote with respect to that matter.
The Board has fixed the close of business on November 12, 1999 as the
record date for determining the shareholders entitled to receive notice of and
to vote at the 1999 Annual Meeting. Persons who were not shareholders at such
time will not be allowed to vote at the 1999 Annual Meeting. At the close of
business on November 12, 1999, the number of votes that could be represented at
the 1999 Annual Meeting is 6,453,925. The Company had 6,377,925 shares of common
stock and 76,000 shares of Series H preferred stock. Both the common stock and
preferred stock have one vote per share. Such common and preferred stock are the
only outstanding classes of voting stocks of the Company.
All properly executed proxies that are returned to the Company prior to or
at the 1999 Annual Meeting will be voted in accordance with the choices
indicated by a shareholder on each such proxy. If a proxy is properly executed
but does not specify any or all choices on it, the proxy will be voted; to elect
the director nominees proposed by the Board and listed in this Proxy Statement
and on the proxy, to ratify the appointment of Callahan, Johnston & Associates,
LLC, as independent auditors for the fiscal year ended June 30, 1999 and to act
upon such other business matters that may properly be brought before the meeting
or any adjournments thereof. Any shareholders giving a proxy may revoke it at
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PRELIMINARY PROXY PRELIMINARY PROXY
any time prior to its use at the 1999 Annual Meeting by filing with the
Secretary of the Company a revocation of the proxy, or by delivering to the
Company, a duly executed proxy bearing a later date or by attending the Annual
Meeting and voting in person.
DESCRIPTION OF SECURITIES
-------------------------
The authorized capital stock of the Company consists of common stock and
preferred stock. The Company has a total number of shares of common stock which
is authorized is 20,000,000 shares at $.01 par value per share. The total number
of shares of preferred stock, which is authorized, is 10,000,000 shares at $1.00
par value per share.
On May 3, 1997 the Company had a Confirmed Plan of Reorganization approved
by the Bankruptcy Court. In conjunction with this Plan, the preferred stock was
converted to common stock on a one to one basis and then the common stock was
affected by a one-for-ten "reverse" split. Each of the resulting, after split,
shares received a stock and warrant unit consisting of one share of common
stock, three "A" warrants, 3 "B" warrants and three "C" warrants. Each "A"
warrant authorizes the holder to purchase 1 share of non-restricted new common
stock of the Company at $2.50 per share, which is exercisable to May 5, 2000, in
exchange for one "A" warrant. This date per Plan was originally August 5, 1998,
however was extended by the Board of Directors to May 5, 2000.
If the "A" warrant is not exercised, then the "B" warrants and "C" warrants
of the Warrant Unit terminates.
The "B" warrant authorizes the purchase of non-restricted new common stock
of the Company at $5.00 per share and is exercisable for one year after the
termination date of the "A" warrant.
The "C" warrant authorizes the purchase of non-restricted new common stock
of the Company at $7.00 per share and is exercisable for one year after the
termination date of the "B" warrants.
To date, there have been 10,021 "A" warrants exercised for a total of
$25,052.50.
A schedule showing activity in the Company`s stock from June 30, 1996
through June 30, 1999 is on the following page. In conjunction with the
Confirmed Plan of Reorganization, 2,746,000 shares of the Company`s restricted
common stock were issued to creditors in exchange for debt. 300,000 shares of
free trading common stock were issued for guarantees on secured debt and payment
of administrative fees.
The Confirmed Plan also authorized the issuance of 275,000 shares of
Convertible Series H Preferred Stock in exchange for assets valued at $2,000,000
being injected into the Company, with each share of Series H preferred stock
convertible into 10 shares of common stock.. The original guarantors of the Plan
were able to provide only a portion of the required $2,000,000 funding and
received 30,000 shares of Series H Preferred stock for an investment of
$218,182. 29,000 shares of this Series H stock were immediately converted to
290,000 shares of common stock.
When new funders agreed to provide the $2,000,000 in assets into the
Company, the Board of Directors approved their receiving 275,000 shares of
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Series H stock for this investment. 200,000 shares of Series H Shares have been
converted to 2,000,000 shares of restricted common stock.
Common Stock
The holders of common shares are entitled to one vote for each share held.
The affirmative vote of a majority of all shares present and entitled to vote,
both common and preferred, is sufficient to effect any corporate action upon
which shareholders may or must vote. Common shares do not carry cumulative
voting rights, thus holders of more than 50% of the common and preferred shares
have the power to elect all directors and, as a practical matter, to control the
Company. Holders of common shares are not entitled to preemptive rights and the
common shares are not subject to redemption.
The Company`s by-laws provide that the number of directors of the
corporation shall be determined by majority vote of the entire Board or by an
amendment of the By-Laws but shall not be less than three. All directors are
elected by plurality vote for one-year terms at the annual meeting of
shareholders. A special meeting of shareholders may be called by the Chairman of
the Board, the President, or any two directors. Holders of common stock are
entitled to receive, pro rata, dividends when and as declared by the Board out
of funds legally available therefore after proper distributions to the preferred
shares. Upon liquidation, dissolution or winding up of the
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VERITEC INC.
STATEMENTS OF SHAREHOLDERS' DEFICIENCY
FISCAL YEARS ENDED JUNE 30, 1999, 1998, AND 1997
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Additional
Preferred Stock Common Stock Paid in Accumulated Shareholders
Shares Amount Shares Amount Capital Deficit Deficiency
-------- -------- -------- -------- ---------- ------------ -------------
Balance at June 30, 1996 441,836 441,836 2,085,600 183,164 4,104,721 -9,538,590 -4,808,869
------- ------- --------- ------- --------- ---------- ----------
1 for ten Reverse Split per Plan -397,652 -1,877,040
Additional shares due to rounding split 6
Trade old preferred for new common -44,184 44,184
Debt to equity and adjustments per Plan -441,836 2,746,020 -153,176 5,158,739 4,563,727
Issuance of new common stock for guaranty
of Gant note and Plan of Reorganization 300,000 3,000 -3,000
Payment of Plan Administrative costs
by HOMETREND 150,980 150,980
Loss from operations -301,252 -301,252
------------------- ----------- --------- --------- -------- --------
Balance at June 30, 1997 - - 3,298,770 32,988 9,411,440 -9,839,842 -395,414
Exercise of 10,020 warrants at $2.50 10,021 100 24,952 25,052
Loss from operations -461,545 -461,545
-------------------- ----------- -------- --------
Balance at June 30, 1998 3,308,791 33,088 9,436,392 -10,301,387 -831,907
Issuance of Series H Preferred for cash 30,000 218,182 218,182
Conversion of Series H preferred to common -29,000 -210,909 290,000 2,900 208,009
------- -------- ------- -------
Loss from operations -451,222 -451,222
-------- --------
Balance at June 30, 1999 1,000 7,273 3,598,791 35,988 9,644,401 -10,752,609 -1,064,947
----- ----- --------- ------ --------- ----------- ----------
</TABLE>
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PRELIMINARY PROXY PRELIMINARY PROXY
Company and subordinate in priority to all preferred series, holders of
common stock are entitled to share ratably in the Company`s assets legally
available for distribution to its shareholders after payment of all debts and
other obligations and are not subject to further calls or assessments of all
obligations.
Preferred Stock
The Articles of Incorporation of the Company authorize 10,000,000 shares of
preferred stock with a par value of $1.00 per share. The Board is authorized to
determine any number of series into which shares of preferred stock may be
divided and to determine the rights, preferences, privileges and restrictions
granted to any series of the preferred stock. The preferred stock may contain
special preferences as determined by the Board, including, but not limited to,
the designation of series, shares in each series, voting and other rights,
preferences, dividend rates, privileges, restrictions and convertibility ratio
into shares of common stock of the Company.
PRINCIPAL SHAREHOLDERS
----------------------
The following table sets forth certain information regarding the beneficial
ownership of the common and preferred stock of the Company as of November 12,
1999 by each shareholder who is known by the Company to be the beneficial owner
of more than 5% of the Company's voting securities, by each director and by all
directors and officers as a group. Except as otherwise indicated, and subject to
applicable community property and similar laws, each of the persons named has
sole voting and investment power with respect to the securities owned by him.
The Company anticipates that each of the proposed Directors will vote their
shares"FOR" each of the matters to be voted upon.
Shares of stock beneficially owned (1) (2)
------------------------------------------
Amount of Amount of
Common and Series H Amount of
Name and Address Percent of Preferred total votes
of Beneficial Owners Class (3) Class (4) and percent(5)
-------------------- --------- --------- --------------
The Matthews Group, LLC
1430 Orkla Drive 2,000,000 75,000 2,075,000
Golden Valley, MN 55427 31.35% 98.68% 32.53%
W. M. Starosolsky (8)
225 Broadway, Suite 1806 569,965 569,965
New York, NY 10007-3469 8.93% 8.93%
Jack E. Dahl (9)
19801 Marilla Street 389,394 389,394
Chatsworth, CA 91311 6.10% 6.10%
Ms. Van Thuy Tran (7)
1430 Orkla Dr. 81,250 81,250
Golden Valley, MN 55427 1.27% 1.27%
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PRELIMINARY PROXY PRELIMINARY PROXY
Mark B. Pinson (9)
16721 Rinaldi 352,932 352,932
Granada Hills, CA 91344 5.53% 5.53%
Roger W. Bailey, Esq. (8)
18 Gap View Road 14,500 14,500
Short Hills, NJ 07078 * *
Dr. Helen Laib (8)
1430 Orkla Dr. - -
Golden Valley, MN 55427
Steve Holtze (8)
1430 Orkla Dr.. - -
Golden Valley, MN 55427
All officers and directors, 3,408,041 75,000 1,607,276
as a group (8 persons) 53.43% 98.68% 53.97%
(*) Represent less than 1%
(1) Unless otherwise indicated, to the Company's knowledge, each person or
group possesses sole voting and sole investment power with respect to the
shares shown opposite the name of such person or group. The Matthews Group
includes Larry Matthews, Chairman and Chief Executive Officer of the
Company and Ms. Van Thuy Tran, President and Treasure of the Company.
(2) Shares not outstanding, but deemed beneficially owned by virtue of the
right of a person or member of a group to acquire them within 60 days are
treated as outstanding only when determining the amount and percent owned
by such person or group
(3) The amounts and percent are based on the current number of shares of common
stock outstanding of 6,377,925 as of November 12, 1999.
(4) This column gives the number of shares of Series H Preferred shares
outstanding. Holders of Series H Preferred stock have one vote per share.
Each share of Series H Stock is convertible into 1o shares of Common stock
at the option of the holder.
(5) Amount of total votes and percent of total voting shares represented at the
1999 Annual Meeting gives the cumulative voting of the common shares as
well as the aggregate common equivalent votes of the Series H preferred
shares.
(7) Person is an Officer and Director of the Company.
(8) Person is a Director of the Company.
(9) Person is an Officer of the Company.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
In October 1995 the Company was put into involuntary Bankruptcy and in
April 1996 was approved for Chapter 11 filing. A Confirmed Plan of
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PRELIMINARY PROXY PRELIMINARY PROXY
Reorganization was approved on May 3, 1997 with a major transfer of debt to
equity by many creditors. The Plan also called for an investment of $2,000,000
in assets by a funder. The Company has filed all 10-QSB forms and 10-KSB forms
for the periods through fiscal year June 30, 1999. On October 13, 1999 the
Bankruptcy Court approved the Company`s motion for a Final Decree. The Company
is not aware of any Form 3 filings by any Director, Officer or 5% shareholder
during or since the Bankruptcy or final Decree.
PROPOSAL ONE
ELECTION OF DIRECTORS
Nomination
The Bylaws of the Company provide that directors shall hold office until
the Annual Meeting of Shareholders next held after their election and until
their successors are elected and qualified. Three nominees have been selected by
the Board of Directors to fill the office of Director to be elected at the 1999
annual meeting. If elected, such individuals will serve until the next annual
meeting of shareholders and until their successors are duly elected and
qualified. All three (3) of the nominees (Larry Matthews, Ms. Van Thuy Tran and
Roger W. Bailey) are incumbent members of the Board. Mr. Bailey has served since
June 18, 1994, and Larry Matthews and Ms. Van Tran since January 28, 1999.
If, prior to the Annual Meeting, the Board should learn that any nominee
will be unable to serve by reason of death, incapacity or other unexpected
occurrence, the proxies that would have otherwise been voted for such nominee
will be voted for a substitute nominee if one is selected by the Board.
Board Recommendation
The selection of each nominee requires the affirmative vote of a majority
of the votes cast, considering all common and preferred votes together,
represented in person or by proxy at the Annual Meeting. In the absence of other
instructions, the proxies solicited hereby will be voted FOR each of the
individuals listed below, each of whom the Board has nominated for election as a
director of the Company.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE SELECTION OF EACH
OF THE NOMINEES LISTED BELOW.
Information about Nominees
The three nominees for Director of the Company, and their executive officer
position held in the Company, if applicable, are listed below. Each Director
will serve until the next annual meeting of shareholders, or until their
respective successors have been elected and duly qualified. Directors serve
one-year terms. Officers are appointed by the Board. There are no family
relationships between any Directors. The Directors of the Company are as
follows:
Officer title
Name Age Director since (N/A indicates not an officer)
---- --- -------------- ------------------------------
Larry Matthews 71 1/28/99 Chairman and Chief Executive Officer
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PRELIMINARY PROXY PRELIMINARY PROXY
Ms. Van Thuy Tran 54 1/28/99 President and Treasurer
Roger W. Bailey 52 6/18/94 N/A
Resumes and antecedents of Nominees
Larry Matthews was appointed as Acting President and Chief Executive
Officer and Director on January 28, 1999, in conjunction with a plan from "The
Matthews Group" to evaluate and possibly fund the Registrant out of Bankruptcy.
Mr. Matthews has been a consultant for Vendtronics LLC (was formerly
Chairman/Co-owner, sold to FEC) from 1994 to the present time. From 1984 to 1993
he was Co-founder, Director and Vice President-Engineering of ZYTEC Corporation.
In prior years he was Vice-President Operations at Control Data, Design Engineer
at UNIVAC and Design Engineer at Mpls/Moline/Case. Mr. Matthews currently is on
the Board of Directors of Artesyn Technologies (merger of Computer
Products/ZYTEC), Pioneer Software Development, and Solar Attic and Third Wave
Systems companies.
Ms. Van Thuy Tran, was appointed President and Treasurer of the Company on
October 22, 1999. She has been President of Asia Consulting and Trading Company,
a company dealing with trade in the Pacific Rim countries, since 1994. She is
the Co-founder of Circle of Love, providing mission works in Vietnam. She is
also the founder of Equal Partners, Inc., a construction and building company in
Minnesota. Ms. Van Tran has a Medical Degree in Hematology and worked in the
medical field for over 17 years. For the last twenty years, she has been an
entrepreneur involved in building businesses, providing opportunity for the
minority and creating solutions for distressed situations.
Roger W. Bailey, has been a Director of the Registrant since June 1994. Mr.
Bailey has been Vice President of MCI SYSTEMHOUSE/EDS since November 1998 and
from July 1998 to November 1998 was Managing Director of two of that Company`s
Divisions. From September 1997 to April 1998, Mr. Bailey was Vice President and
General Manager, Enterprise Network Solutions for Accugraph Corporation, Dallas,
Texas. From September 1996 to June 1997 he was Strategic Alliance Vice President
at AT &T Solutions, Florham Park, New Jersey, where he was responsible for
identifying alliance partners, structuring alliances and developing and
implementing a procurement process and supplier management system. From June
1995 to August 1996 Mr. Bailey was Customer Engagement Vice President for AT&T
Solutions. From July 1993 to June 1995, he was Securities Counsel and Director
of Government Affairs for Dell Computer Corporation, Austin, Texas. From 1992 to
June 1995, Mr. Bailey was an Independent Business Counsel as advisor to
entrepreneurial and high-technology businesses. Prior to 1992 he was General
Counsel for Perot Systems Corporation, Reston, Virginia and Electronic Data
Systems Corporation in Dallas, Texas. Mr. Bailey was an Air Force Officer from
1969 to 1978. Mr. Bailey has his law degree from the University of Puget Sound,
M.B.A. degree from the California State University, M.S. degree in Aeronautical
and Astronautical Engineering from Stanford University and a B.S. degree in
Aeronautical Engineering, Engineering Sciences and Mathematics from the U.S.Air
Force Academy.
Committee and Board Meetings
The Registrant had no standing audit, nominating or compensation committees
of its Board or committees performing similar functions during fiscal 1999. The
Directors have regularly communicated to discuss the Company's affairs and also
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PRELIMINARY PROXY PRELIMINARY PROXY
have held formal periodic board meetings to transact and approve appropriate
business. Directors have received no compensation or expenses for attending
Board Meetings. During the period June 30, 1997 through November 2, 1999, the
Board met 26 times. The following are the dates of the Board meetings and
attendance of the Directors:
Date Attendees Absent
- ---- --------- ------
8/18/97 Behling, Starosolsky, Salisbury, Copley Bailey
8/26/97 Behling, Starosolsky, Salisbury, Copley, Bailey None
1/7/98 Behling, Starosolsky, Salisbury, Bailey None
1/21/98 Behling, Starosolsky, Salisbury, Bailey, Pinson None
2/20/98 Behling, Starosolsky, Salisbury, Bailey, Pinson None
3/9/98 Behling, Starosolsky, Salisbury, Bailey, Pinson None
6/9/98 Behling, Starosolsky, Salisbury, Bailey, Pinson None
8/1/98 Behling, Starosolsky, Salisbury, Bailey, Pinson None
10/12/98 Behling, Starosolsky, Salisbury, Pinson Bailey
11/11/98 Behling, Starosolsky, Salisbury, Pinson Bailey
11/18/98 Behling, Starosolsky, Salisbury, Bailey, Pinson None
11/23/98 Behling, Starosolsky, Salisbury, Bailey, Pinson None
11/25/98 Behling, Starosolsky, Salisbury, Bailey, Pinson None
11/27/98 Behling, Starosolsky, Salisbury, Pinson Bailey
12/9/98 Behling, Starosolsky, Salisbury, Pinson, Bailey None
1/11/99 Behling, Starosolsky, Salisbury, Pinson, Bailey None
1/13/99 Behling, Starosolsky, Salisbury, Bailey None
1/28/99 Matthews, Tran, Junghans, Salisbury, Starosolsky,
Bailey, Behling None
3/19/99 Matthews, Tran, Junghans, Salisbury, Starosolsky,
Bailey, Behling None
4/2/99 Matthews, Tran, Junghans, Salisbury, Starosolsky,
Bailey, Behling None
4/26/99 Matthews, Tran, Salisbury, Starosolsky, Bailey,
Behling None
6/14/99 Tran, Salisbury, Starosolsky, Bailey, Behling Matthews
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PRELIMINARY PROXY PRELIMINARY PROXY
8/11/99 Matthews, Tran, Salisbury, Starosolsky, Bailey, Behling
9/3/99 Matthews,Tran, Starosolsky, Bailey, Behling,
Laib, Holtze None
9/24/99 Matthews,Tran, Starosolsky, Bailey, Behling,
Laib, Holtze None
10/20/99 Tran, Starosolsky, Laib, Holtze Matthews, Bailey
10/22/99 Matthews, Tran, Starosolsky, Bailey,
Laib, Holtze None
11/2/99 Matthews, Tran, Starosolsky, Holtze Laib, Bailey
Directors did not receive any director's fees for the above meetings.
Mr. David Copley was appointed to the Board of Directors on April 24, 1997,
and was removed from the Board on January 7, 1998. It was determined by the
Board that his appointment was improper since he was affiliated with S.A.H.C.
and his being on the Board gave S.A.H.C and HOMETREND a majority of Directors.
The Reorganization Plan states that S.A.H.C. and HOMETREND cannot have a
majority of members on the Board.
Mark Pinson was appointed a Director at a Board of Directors Meeting on
January 7, 1997 and resigned on January 11, 1999.
Roy Y. Salisbury served on the Board of Directors from May 2, 1997 until
his resignation on June 16, 1999.
Robert Junghans served on the Board of Directors from January 28, 1999 to
April 21, 1999.
James Clarke was appointed Acting President and Chief Executive Officer and
a Director of the Registrant on February 20, 1998 based on a commitment to fund
the Company. When his funding did not materialize as expected, he was removed
from office on March 9, 1998.
Executive Officers
- ------------------
The current operating officers are listed in the following table. There are
no family relationships between any officers of the Company.
Name Age Officer Title
---- --- -------------
Larry Matthews 71 Chairman and Chief Executive Officer
Ms. Van Thuy Tran 54 President and Treasurer
Jack E. Dahl 66 Chief Financial officer and Secretary
Mark B. Pinson 43 Vice President Engineering
The antecedents of Larry Matthews and Ms. Van Thuy Tran are included in the
Director section above.
Jack E. Dahl - In the Confirmed Plan of Reorganization, Mr. Dahl was
appointed Acting Chief financial Officer and Secretary of the Company. From
December 9, 1998 to January 29, 1999, Mr. Dahl was appointed Acting President.
After the Registrant was petitioned into bankruptcy in October, 1995, Mr. Dahl
was elected to the office of President and Chief Executive Officer. From 1991
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until appointed President, Mr. Dahl was the Chief Financial Officer of the
Company. From June 1984 to December 1989, Mr. Dahl was President and CEO of U S
Pump & Turbine Company. From 1980 to 1984, he was President of Elixir
Industries, Inc. Prior to 1980 Mr. Dahl was President of Fleetwood Enterprises,
Guerdon Industries, Inc., both Manufactured housing and recreational vehicle
manufacturers, Chairman of Alma Plastics Company, a seven plant plastic products
manufacturing company, President of Lichter Duo Rest, a furniture manufacturing
company and R. C. Allen, a cash register and small aircraft electronic parts
manufacturing company.
Mark B. Pinson - Has previously been a Director and Officer of the Company,
however, due to lack of Company finances, resigned from his Officer and Director
positions in January 1999. He was rehired in May 1999 to head up the Company's
Engineering and R&D departments. Mr. Pinson has over 15 years experience
managing all aspects of technical development projects, including design,
quality assurance, and customer support. Products include computer-aided design
(CAD), image processing, photmetrics, and auto-identification systems. From 1992
Mr. Pinson has been a development consultant with clients including Veritec,
leading computer, aerospace and photometric companies. From 1983 to 1992, he was
Development Director for Altium, an IBM Company (formerly CADAM Inc. ),
responsible for the creation, testing and maintenance of computer-aided design
software leading a team of over 70 people. From 1982 to 1983 he was Development
Manager for Grafcon in Tulsa, Oklahoma and from 1980 to 1982 an Air Force
Officer and a graduate of U. S. Air Force School of Applied Cryptological
Sciences.
Other Information
The Company has not held an Annual Meeting of Shareholders since January
21, 1995.
The Company was put into involuntary Chapter 7 Bankruptcy in October 1995,
was converted to Chapter 11 Bankruptcy in April 1996. In May 1997, the Company's
motion for a Confirmed Plan of Reorganization was approved by the Court. Due to
financing difficulties with the guarantor of the Plan funding, the Company was
put back into Chapter 7 In May 1999. On September 1, 1999, the Company's motion
to be reconverted to Chapter 11 was approved by the Court and on October 21,
1999 the Company's motion for a Final Decree was granted.
CERTAIN TRANSACTIONS
The Company has adopted a policy that any transactions with directors,
officers or entities of which they are also officers or directors or in which
they have a financial interest, will only be on terms consistent with industry
standards and approved by a majority of the disinterested directors of the
Company's Board and based upon a determination that these transactions are on
terms no less favorable to the Company than those which could be obtained by
unaffiliated third parties. This policy could by terminated in the future. The
Articles of Incorporation of the Company provide that no such transactions by
the Company shall be either void or voidable solely because of such relationship
or interest of directors or officers or solely because such directors are
present at the meeting of the Board or a committee thereof which approves such
transaction or solely because their votes are counted for such purpose. In
addition, interested Directors may be counted in determining the presence of a
quorum at a meeting of the Board or a committee thereof, which approves such a
transaction.
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PROPOSAL TWO
APPOINTMENT OF INDEPENDENT AUDITORS
The Board has selected Callahan, Johnston & Associates, LLC as its
independent auditors for the current 2000 fiscal year ending on June 30, 2000.
During the 1999 fiscal year, Callahan, Johnston & Associates, LLC., provided
audit services in connection with the annual financial statements, filing with
Securities and Exchange Commission and other various audit-related accounting
matters. A representative of Callahan, Johnston & Associates, LLC., is expected
to be present at the 1999 Annual Meeting and to be available to respond to
appropriate questions and to make a statement if he or she desired to do so.
In June 1999, the Company engaged Callahan, Johnston & Associates, LLC., as
the independent auditors to examine the financial statements for fiscal years
ended June 30, 1999, 1998 and 1997. The engagement of Callahan, Johnston &
Associates, LLC., replaced Rossi, Webster & Obrien, who had been the Company's
auditors in 1993 and 1994. The Company did not have audits in the years ended
June 30, 1995 or 1996. The firm of Callahan, Johnston & Associates, LLC., was
chosen due primarily to lower overall fees in connection with the audit
examinations.
In the three most recent fiscal years there were no disagreements with any
of the Company's independent auditors on any material aspect of financial
statement disclosure, accounting principles, or practices or auditing scope or
procedure nor were there were any "reportable events" as that term is defined in
Item 304(a)(i)(v) of Regulation S-K. The Company has received a qualified
opinion in each of past three fiscal years for a going concern.
Board Recommendation
For approval of the appointment of Callahan, Johnston & Associates, LLC.,
as independent auditors for fiscal year 2000, the affirmative vote of a majority
of the outstanding voting shares of the common and preferred stock of the
Company entitled to vote thereon is required. Unless otherwise specified,
proxies solicited by the Board will be voted FOR ratification of the appointment
of Callahan, Johnston & Associates, LLC.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF
THE APPOINTMENT OF CALLAHAN, JOHNSTON & ASSOCIATES, LLC.
OTHER MATTERS
Possible unasserted claims.
During its bankruptcy the Company had sought an investment group to assist
it in funding the $2,000,000 called for under the Plan of Reorganization
approved by the Bankruptcy Court on May 2, 1997. In the intervening years the
various investment groups had attempted to help the company fund this required
investment. Until the Matthews Group funded the Company out of Bankruptcy, all
other groups attempting to provide the necessary funding failed in such
attempts. Through June 30, 1999 no group had been successful in assisting the
company in funding this commitment and the Company remained under the direction
of the Bankruptcy Court. Partial fundings received from these investment groups
have been settled through stock issuances by the Company or are recorded as
stock advances that the Company intends to settle through the issuance of stock.
It is possible that these investment groups will assert claims against the
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Company regarding: the levels of their funding; the Company's termination of
their funding commitments; or for expenses incurred while they were assisting
the Company. Management believes it has appropriately reflected the activity
with these investment groups in the accompanying financial statements. Due to
uncertainties, however, it is at least reasonably possible that claims will be
asserted. The ultimate outcome of these claims, if asserted, cannot presently be
determined.
Commitment to issue shares.
Most of the debt incurred after the Company had a Confirmed Plan of
Reorganization has been satisfied with the exchange of shares of restricted
common stock for the debt.
In the Plan of Reorganization, the Gant Group was considered a secured
creditor and therefore received a secured promissory note instead of equity. The
note amount of $363,000 was to be paid according to the approved Plan - $60,000
on the scheduled effective date of the Plan and the balance in quarterly
installments over a four-year period. The Company was able to pay the $60,000
and first payment on the quarterly payments and then did not have adequate
funding to pay additional money on the notes. Due to the Company's inability to
pay on the Gant note, the Company was converted from a Chapter 11 back to a
Chapter 7 proceeding. The Matthews Group paid the Gant Group $182,345.87 to
bring the note current and in addition has paid the October 1, 1999 quarterly
payment. The Company owes the Matthews Group for amounts they have paid on the
notes. The Matthews Group may be provided stock in exchange for amounts owed
them for payments to the Gant Group.
ANNUAL REPORT
A copy of the Veritec Inc. Annual Report is being mailed to shareholders
with this proxy statement.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Any shareholder who, in accordance with and subject to the provisions of
the proxy rules of the Securities and Exchange Commission, wishes to submit a
proposal for inclusion in Veritec Inc. proxy statement for its 2000 Annual
Meeting of Shareholders must deliver such proposal in writing to Veritec Inc.,
Attn.: Corporate Secretary, at the principal offices at 1430 Orkla Drive, Golden
Valley, MN 55427 no later than September 30, 2000.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board knows of no other
business that will be presented for consideration at the 1994 Annual Meeting
other than that which has been referred to in this Proxy Statement. If any other
business properly comes before the meeting, the appointee named in the proxies
will vote the proxies in accordance with their best judgment.
By Order of the Board,
/s/ Jack E. Dahl
Jack E. Dahl
Secretary
Dated: November 3, 1999
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