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. 1)
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box: |_| Confidential, for Use of the Commission |_|
Preliminary proxy statement Only (as permitted by Rule 14a-(e)(2)) | |
Definitive proxy statement |X| Definitive additional materials |_|
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MEDIWARE INFORMATION SYSTEMS, 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| $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A. |_| $500 per each party to the
controversy pursuant to Exchange Act Rule 14a-6(i)(3). |_| 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:
|X| 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>
6
MEDIWARE INFORMATION SYSTEMS, INC.
1121 Old Walt Whitman Road
Melville, New York 11747-3005
(516) 423-7800
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 6, 1998
Notice is hereby given that the Annual Meeting of the Shareholders
of Mediware Information Systems, Inc. will be held on January 6, 1998, at 140
East 45th Street, 43rd Floor, New York, NY 10017 (offices of The Kaufmann Fund,
Inc.), at 10:00 a.m., New York City time, for the following purposes:
1. To elect three Class III directors (Proposal No. 1 in the
Proxy Statement).
2. To Approve the 1997 Stock Option Plan for Non-Employee
Director (Proposal No. 2 in the Proxy Statement).
3. To transact such other business as may properly come before
the meeting.
Only holders of the Common Stock of record at the close of
business on November 19, 1997 are entitled to notice of, and to vote at, the
Annual Meeting.
By Order of the Board of Directors
Melville, New York
November 21, 1997
PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY IN THE
ENCLOSED, RETURN POSTAGE-PAID ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING. IF YOU ATTEND THE MEETING IN PERSON AND VOTE, THE PROXY WILL BE OF NO
EFFECT.
Return proxies to:
Office of Lawrence Auriana
The Kaufmann Fund, Inc.
140 East 45th Street, 43rd Floor
New York, NY 10017
<PAGE>
MEDIWARE INFORMATION SYSTEMS, INC.
1121 Old Walt Whitman Road
Melville, New York 11747-3005
PROXY STATEMENT
November 21, 1997
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Mediware Information Systems, Inc. (the
"Company") to be voted at the Annual Meeting of Shareholders of the Company (the
"Annual Meeting") to be held at 140 East 45th Street, 43rd Floor, New York, New
York 10017 (offices of The Kaufmann Fund) on January 6, 1998 at 10:00 am., New
York City time, and any adjournment thereof. This Proxy Statement and the
related proxy card, together with the Company's Annual Report on Form 10-KSB and
the financial statements of the Company for the fiscal year ended June 30, 1997,
are first being sent to the Company's shareholders on or about November 21,
1997.
Proxies are being solicited by the Company from the holders of Common
Stock with respect to the election of directors and the authorization of the
1997 Stock Option Plan for Non-Employee Directors (the "Plan").
Please complete, sign, date and return the enclosed proxy. The proxy
solicited hereby may be revoked at any time by executing and delivering a proxy
of a later date, by delivering written notice of revocation to the Secretary of
the Company or by attending the meeting and giving oral notice of the intention
to vote in person. Properly executed, delivered and unrevoked proxies in the
form enclosed will be voted at the Annual Meeting or any adjournment thereof in
accordance with the directions thereon. In the absence of such directions, the
proxy will be voted in accordance with the recommendations of management.
The only class of voting securities of the Company is its Common Stock,
par value $0.10 per share ("Common Stock"), of which 5,532,042 shares were
outstanding on November 19, 1997, each entitled to one vote. Only shareholders
of record on the close of business on November 19, 1997 shall be entitled to
vote at the Annual Meeting.
The holders of a majority of the issued and outstanding shares of
Common Stock entitled to vote, present in person or represented by proxy, will
constitute a quorum for the transaction of business at the Annual Meeting. The
favorable vote of the holders of a majority of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting is required both
for the election of Directors and for the authorization of the Plan.
Abstentions will be reflected in the determination of number of shares
present and entitled to vote and will have the effect of a negative vote with
respect to both the election of directors and the authorization of the Plan.
Brokers who hold shares in street names for customers will have the authority
and will be entitled to vote on each of the election of directors and the
authorization of the Plan if they have not received instructions from beneficial
owners, so there will be no broker non-votes for either proposal at the meeting.
Unless contrary instructions are given, all proxies received pursuant to this
solicitation will be voted in favor of the election of the nominees named herein
and in favor of the authorization of the Plan.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
As provided in the Restated Certificate of Incorporation of the Company
and the By-Laws, as amended, the Board has fixed the number of directors at
nine, which number is divided into three classes, with one class standing for
election each year for three-year terms. The classes of the Board are kept as
equal in size as practicable and each class has a minimum of three directors.
The favorable vote of the holders of a majority of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting is required for
the election of Directors.
At the Annual Meeting, three Class III directors are to be elected to
hold office for a three-year term until the annual meeting following the 2000
fiscal year and until their successors have been elected and qualified. Unless
otherwise directed, the proxies named in the accompanying form of proxy intend
to vote FOR all of the nominees named below. If any such nominee should not be
available for election, the persons named as proxies may vote in their
discretion for another nominee designated by the Board of Directors in such
person's place.
The information about the nominees and the present directors of the
Company, and their security ownership, has been furnished by them to the
Company. There are no family relationships between any of the nominees.
All of the nominees are currently directors of the Company. Certain
information with respect to the three nominees, Lawrence Auriana, Jonathan H.
Churchill and Clinton G. Weiman, M.D., is as follows:
Class III Director Nominees
Lawrence Auriana, age 53, has been Chairman of the Board of the Company
since 1986 and a director since 1983. He has been a Wall Street analyst, money
manager and venture capitalist for over 20 years. Since 1986, he has been
Chairman, a director and, together with Mr. Hans Utsch, also a director of the
Company, Portfolio Co-Manager of The Kaufmann Fund, a mutual fund that invests
in small and medium-sized growth companies. He received a B.A. degree from
Fordham University, studied at New York University Graduate School of Business,
and is a senior member of The New York Society of Securities Analysts.
Jonathan H. Churchill, age 65, has been a practicing attorney in New
York City since 1958 and since May 1996 has been Counsel at Winthrop, Stimson,
Putnam & Roberts. He has been a director of the Company since 1992. Mr.
Churchill was a partner of Boulanger, Hicks, & Churchill, P.C., from January
1990 to May 1996. Winthrop, Stimson, Putnam & Roberts rendered legal services to
the Company during the last fiscal year, and the Company has retained and
proposes to retain Winthrop, Stimson, Putnam & Roberts during the current year.
Mr. Churchill received a B.A. from Harvard College and an L.L.B. from Harvard
Law School.
Clinton G. Weiman, M.D., age 72, has been a director since June 1996.
From 1961 to January 1993 he was Corporate Medical Director, Senior Vice
President of Citicorp/Citibank. Since January 1996, Dr. Weiman has been
independently engaged as a consultant with the Federal Reserve. From 1956 to
1970 Dr. Weiman was engaged in private practice in New York, New York. Dr.
Weiman received a B.A. degree from Princeton University and a medical degree
from Cornell University Medical College. His appointments have included Clinical
Associate Attending Physician at New York Hospital and Associate Professor,
Clinical Medicine at Cornell University Medical College.
DIRECTORS
The remaining current directors of the Company are as follows:
Class I Directors
(Term Expires at the Annual Meeting Following
the 1998 Fiscal Year)
Roger Clark, age 63, has been a director since 1983. From 1980 to 1987,
he held a series of managerial positions in the computer products area with
Xerox Corporation. Since 1987, he has been independently engaged as a
micro-computer consultant and programmer. Mr. Clark is the author of seven books
on micro-computing and a director of The Kaufmann Fund.
Hans Utsch, age 59, has been a director since 1985. He has been
independently engaged in money management and investment banking for over 20
years. Since 1986, he has been President and, together with Mr. Lawrence
Auriana, Portfolio Co-Manager of The Kaufmann Fund. He received a B.A. degree
from Amherst College and an M.B.A. from Columbia University.
Les N. Dace, age 51, was appointed President and C.E.O. in 1995. He
joined the Company in 1992 as General Manager for the Digimedics and Surgiware
Product Centers. Prior thereto, he was Vice President of Sales and Marketing for
PRX Pharmacy Systems, a Colorado-based company providing hospital pharmacy
management systems and home health software solutions. From 1983 to 1987, he was
employed by NBI, Inc. as divisional President for its computer peripherals and
office supplies company. Mr. Dace has a B.S. degree in Electrical Engineering
from the University of Missouri.
Class II Directors
(Term Expires at the Annual Meeting Following
the 1998 Fiscal Year)
Joseph Delario, age 63, was President and Chief Executive Officer of
Quadrocom, Inc., a business consulting firm, until December 31, 1992, and since
then has been a business consultant and private investor in and active in the
management of several computer service companies. Mr. Delario renders management
and financial services to the Company. Mr. Delario received a B.A. degree from
Fairleigh Dickenson University in 1956.
Walter Kowsh, Jr., age 48, has been a director since 1990. He is a
consultant programmer specializing in Client/Server database systems. He was a
Senior Programmer Analyst with Brown Bros. Harriman & Co. from 1989 to 1992.
From 1986 to 1989, he was a computer consultant with Howard Systems
International. He received a B.A. degree from Queens College and an M.B.A. from
the New York Institute of Technology, and is a diplomate of New York University
in Computer Programming and Systems Design.
John C. Frieberg, age 63, was President, C.E.O. and Chief Financial
Officer of the Company from 1992 to July 1995, and has been a director since
1993. Mr. Frieberg joined Digimedics Corporation, which later became a wholly
owned subsidiary of the Company, as President in October 1989. Prior thereto, he
was President of Caleus, Inc., an information system company, from 1988 to 1989;
President of Synergy Computer Graphics Corp., a computer peripheral equipment
company, from 1984 to 1988; and President of NCR/DPI Inc., a computer systems
manufacturing company, from 1972 to 1982. Mr. Frieberg received a B.S. degree in
Industrial Engineering from the University of California at Los Angeles.
Board Meetings; Committees
The Board of Directors met two times during the fiscal year ended June
30, 1997.
The Company's Audit Committee is currently comprised of Messrs. Clark,
Frieberg and Weiman and The Audit Committee did not meet during fiscal 1997. At
the present time, the Company does not have a nominating committee. The
Compensation Committee, which administers the 1982 Employee Stock Option Plan
and the 1992 Equity Incentive Plan, consisting of Messrs. Utsch and Clark, took
action two times during fiscal 1997.
Compensation of Directors
It has been the Company's practice, starting in 1987, to conserve cash
by compensating directors for their services primarily through the grant of
stock options and shares of Common Stock. In 1991 a Stock Option Plan for
Non-Employee Directors (the "1991 Plan") was adopted. Under the 1991 Plan,
options to purchase 1,667 shares have been granted annually on July 1 of each
year to each non-employee director of the Company (except for the Chairman, who
has received options to purchase 5,000 shares annually). Options are exercisable
at 100% of fair market value of the Company's Common Stock on the date of grant,
and payment may be in cash, the Company's Common Stock, or a combination
thereof. An aggregate of 150,000 shares of Common Stock are subject to the 1991
Plan. Options granted under the 1991 Plan are not intended to qualify under
Section 422 of the Code. Under the 1991 Plan each director in office on July 1,
1996 received for services as director during the 1997 fiscal year a grant of
1,667 options (5,000 shares in the case of the Chairman), exercisable at $3.75,
which was the fair market value of the Company's Common Stock on July 1, 1996.
These options vested and became exercisable in equal monthly installments during
fiscal 1997.
The 1991 Plan has expired. A new Plan, which the shareholders are being
asked to approve at the Annual Meeting, was approved by the Board in June 1997.
Under the new Stock Option Plan for Non-Employee Directors (the "1997 Plan")
each director in office on July 1 of each fiscal year will receive for services
as director during the ensuing fiscal year a grant of 3,600 options (10,800
shares in the case of the Chairman). The options granted on July 1, 1997 under
the Plan are exercisable at $5.50, which was the fair market value of the
Company's Common Stock on July 1, 1997. These options will vest and became
exercisable in equal monthly installments during fiscal 1998. See "Proposal No.
2."
Each director in office on July 1, 1996 also became entitled to receive
a total of 2,500 shares of Common Stock (7,500 in the case of the Chairman),
payable on July 1, 1997, for his services during fiscal 1997. The fair market
value of the Company's Common Stock, for the foregoing purposes, on the date of
the Board's action was $3.75 per share. Each director in office on July 1, 1997
also became entitled to receive for his services during fiscal 1998 shares of
Common Stock valued at $10,000 ($30,000 in the case of the Chairman). Based on
the average market price per share for the fiscal year granted on a monthly
basis.
SHARE OWNERSHIP
The following tables set forth the beneficial ownership of the
Company's Common Stock as of September 30, 1997 by (i) each person who is known
by the Company to own beneficially more than 5% of the Company's Common Stock,
(ii) each of the executive officers named in the Summary Compensation Table
included elsewhere herein, (iii) each current director of the Company, (iv) each
nominee for election as a director and (v) all directors and executive officers
as a group:
<PAGE>
<TABLE>
Principal Shareholder
<CAPTION>
Number of Shares
Acquirable within Percentage of
Name Number of Shares 60 Days (1),(4) Class Owned (2)
- ---- ---------------- ----------- ------------
<S> <C> <C> <C>
Lawrence Auriana3 1,013,277 (2) 714,695 16.2%
140 East 45th Street
43rd Floor
New York, NY 10017
Oracle Partners, L.P., 1,117,736 0 20.2%
Oracle Institutional Partners, L.P.,
GSAM Oracle Fund, Inc.
- --------------------
<FN>
1 Reflects the shares which may be acquired by the shareholder upon
exercise of options and warrants which are exercisable within 60 days
of September 30, 1997.
2 Based on the numbers of shares outstanding at, plus shares acquirable
by Mr. Auriana within 60 days of, September 30, 1997.
3 Mr. Auriana is also Chairman and a nominee for director of the Company.
4 Includes 674,695 warrants granted to Mr. Auriana for his loans to the
Company in the bridge financings of the Company in fiscal 1995 and
fiscal 1994.
</FN>
</TABLE>
<TABLE>
Share Ownership by Directors, Nominees, Named Executive Officers
and Directors and Executive Officers as a Group
Number of Shares
Acquirable within Percentage of
Names and Addresses (1) Number of Shares (2) 60 Days (3) Class owned (2)
- -------------------- ----------------- -------- -------------
<S> <C> <C> <C>
Lawrence Auriana 1,013,277 714,695 16.2%
Jonathan H. Churchill 31,054 9,030 *
Roger Clark 22,035 10,835 *
Les N. Dace 70,000 70,000 1.2%
Joseph Delario 196,018 34,030 3.5%
John Frieberg 39,807 34,807 *
Walter Kowsh, Jr. 42,582 10,835 *
Hans Utsch 109,785 10,835 2.0%
Clinton G. Weiman 4,167 1,667 *
John Esposito 51,100 50,000 *
Thomas Mulstay 40,000 40,000 *
Rodger Wilson 1000 0 *
All Directors and Executive
Officers as a group 1,620,825 986,734 24.9%
(12 persons)
- ------------------------
<FN>
1 Addresses are as follows: Lawrence Auriana: see previous chart.
Jonathan Churchill: One Battery Park Plaza, New York, New York 10004.
Roger Clark: 330 Elm Street, Unit #1, New Canaan, CT 06840. Les Dace:
11211 Quivas Loop, Westminster, Colorado. Joseph Delario: 77
Independence Way North, Edgewater, NJ 07020. John Frieberg: 4402 South
St. Andrew's Lane, Spokane, WA 99223. Walter Kowsh, Jr.: 64-08 136th
Street, Flushing, NY 11367. Hans Utsch: 140 East 45th Street, 43rd
Floor, New York, New York 10017. Clinton Weiman: 2 Roberta Lane,
Greenwich, CT 06830. John Esposito: 1121 Old Walt Whitman Road,
Melville, NY 11747-3005. Thomas Mulstay: 1121 Walt Whitman Road,
Melville, NY 11747-3005.
2 Based on the number of shares outstanding at September 30, 1997, plus,
for each person or group, shares acquirable within 60 days of September
30, 1997.
3 Reflects the shares which may be acquired by the shareholders upon
exercise of options and warrants which are exercisable within 60 days
of September 30, 1997.
* Represents less than 1% of the Company's outstanding common stock.
</FN>
</TABLE>
<PAGE>
15
Exhibit A
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
Name Age ....Position
- ---- --- --------
<S> <C> <C>
Lawrence Auriana...........................53 ....Chairman of the Board and Secretary
Les Dace...................................51 ....President, CEO, and General Manager - Surgiware
George Barry...............................44 ....Chief Financial Officer
Rodger Wilson..............................44 ....Vice President and General Manager - Digimedics -
Pharmacy Division
Thomas Mulstay.............................44 ....Vice President and General Manager - Hemocare
John Esposito..............................38 ....Vice President - Sales - Mediware
-------------------
</TABLE>
Lawrence Auriana has been Chairman of the Board of the Company since
1986 and a director since 1983. He has been a Wall Street analyst, money manager
and venture capitalist for over 20 years. Since 1986, he has been Chairman, a
director and, together with Mr. Hans Utsch, also a director of the Company,
Portfolio Co-Manager of The Kaufmann Fund, a mutual fund that invests in small
and medium-sized growth companies. He received a B.A. degree from Fordham
University, studied at New York University Graduate School of Business, and is a
senior member of The New York Society of Securities Analysts.
Les N. Dace was appointed President and C.E.O. in 1995. He joined the
Company in 1992 as General Manager for the Digimedics and Surgiware Product
Centers. Prior thereto, he was Vice President of Sales and Marketing for PRX
Pharmacy Systems, a Colorado-based company providing hospital pharmacy
management systems and home health software solutions. From 1983 to 1987, he was
employed by NBI, Inc. as divisional President for its computer peripherals and
office supplies company. Mr. Dace has a B.S. degree in Electrical Engineering
from the University of Missouri.
George Barry joined the Company in 1997 as Chief Financial Officer. He
has been a senior financial manager of software technology companies for over 12
years. Mr. Barry was employed as Vice President and CFO at Microware Systems
Corporation from 1994 to 1996 and at Comptek Research, Inc. from 1993 to 1994.
He was employed as a Group CFO/Controller for Dynatech Corporation from 1986 to
1992. Mr. Barry is a CPA and holds an MBA from the University of Wisconsin -
Madison.
Rodger P. Wilson, R.Ph., joined the Company in 1996 as Vice
President/General Manager of the Pharmacy Division. He was President and Chief
Executive Officer of PRX Pharmacy Systems, Inc., from 1982 to 1992. Mr. Wilson
was Vice President of Operations and Chief Information Officer of Concepts
Direct, Inc., from 1992 to 1996. Mr. Wilson received a B.S. degree from the
University of Wyoming School of Pharmacy and is a registered Pharmacist.
Thomas Mulstay joined the Company as Vice President in 1990 and was
appointed General Manager, Hemocare in 1992. From 1989 to 1990, he was with
Spectrum Healthcare Solutions, a joint venture of IBM, Inc. and Baxter
Healthcare International, engaged in various sales positions. From 1986 to 1989
Mr. Mulstay was employed by Baxter Healthcare International, first as a Regional
Sales Manager, then Regional Manager, then Regional Vice President. Previously
he was a District Sales Manager at Terrano Corporation, a vendor of laboratory
information systems to hospitals, National Hospital Marketing Manager at Metpath
Laboratory, and a sales representative at Abbott Laboratories. Mr. Mulstay holds
a B.S. degree from Assumption College.
John Esposito joined the Company as Vice President - Sales in 1990.
From 1986 to 1990, he was employed in various sales positions by the Healthcare
Division of Data General Corporation. He is a two-time member of Data General's
Million Dollar Club, and was recognized in1990 as Data General's outstanding
healthcare sales representative. Prior to joining Data General, he worked in a
technical capacity in the Information Systems Department at the New York Public
Library. He is a graduate of Syracuse University, with a B.S. degree in
Marketing and Management Information Systems.
EXECUTIVE COMPENSATION
The following tables sets forth the compensation of the Chief Executive
Officer of the Company and each of the other most highly compensated executive
officers whose total annual salary and bonus was over $100,000 for the fiscal
year ended June 30, 1997.
<TABLE>
Summary Compensation Table
Long-Term Compensation
---------------------------------------
Annual Compensation Awards Payouts
----------------------------
Other All Other
Annual Restricted Securities Compen-
Name and Principal Compen- Stock Underlying LTIP sation
Positions(1) Fiscal Salary Bonus sation Awards Options Payouts ($)
Year ($) ($) ($) ($) SARs (#) ($)
-------- --------- --------- --------- ----------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Les N. Dace 1997 110,000 151,062 6,000 -- -- -- 262
President, CEO and CFO 1996 110,000 52,560 -- -- 50,000 -- 262
1995 75,000 60,731 -- -- -- -- 262
Rodger Wilson 1997 77,400 55,052 5,500 50,000 262
Vice President and
General Manager,
Digimedics - Pharmacy
Division
John Esposito 1997 80,000 50,733 6,000 -- 35,000 -- 205
Vice President, Sales 1996 70,000 71,795 -- -- -- -- 250
1995 70,000 50,595 -- -- -- -- 241
Thomas Mulstay 1997 80,000 79,519 6,000 -- -- -- 232
Vice President & 1996 75,000 130,313 -- -- -- -- 215
General Manager, 1995 75,000 90,662 -- -- -- -- 205
Hemocare
- ------------------------
<FN>
1 The amount of salary and bonus for fiscal 1997 for the other executive
officers did not meet the threshold reporting requirement under the
rules of the Commission.
</FN>
</TABLE>
<PAGE>
OPTION/SAR GRANTS IN LAST FIS CAL YEAR
The following table sets forth certain information concerning options
to purchase Common Stock in fiscal 1997 granted to the individuals named in the
Summary Compensation Table. No stock appreciation rights were granted in fiscal
1997.
<TABLE>
Number of % of Total
Securities Options
Underlying Granted to
Options Employees in Exercise Expiration
Name Granted Fiscal Year Base Price Date
---- ------- ----------- ---------- ----
<S> <C> <C> <C> <C>
John Esposito 35,000(1) 26% $2.80 May 1, 2007
Rodger Wilson 35,000(1) 26% 2.80 May 1, 2007
Rodger Wilson 15,000(2) 11% 3.25 Dec. 1, 2006
- ------------------------
<FN>
1 Options are exercisable 25%, 50%, 75% and 100% on May 1, 1998, 1999, 2000 and 2001.
2 Options are exercisable 25%, 50%, 75% and 100% on December 1, 1997, 1998, 1999 and 2000.
</FN>
</TABLE>
FISCAL 1997 OPTION/SAR EXERCISES AND VALUE
OF OUTSTANDING OPTIONS AT END OF LAST FISCAL YEAR
The following table sets forth options exercised by the named executive
officers during fiscal 1997 and the number and value of options held by them at
June 30, 1997. No stock appreciation rights were granted and there were no
outstanding stock appreciation rights at June 30, 1997. The fair market value or
such date was $5.25 per share.
<TABLE>
Number of
Securities Underlying Value of
Shares Unexercised Unexercised
Acquired on Value Options at End In-the-Money Options
Name Exercise Realized of Fiscal Year End of Fiscal Year
---- -------- -------- -------------- ------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Les N. Dace -- -- 70,000 25,000 $286,100 $106,250
John Esposito -- -- 50,000 35,000 197,300 85,750
Thomas 10,000 22,400 40,000 -- 162,400 --
Mulstay
Rodger Wilson -- -- -- 50,000 -- 115,750
</TABLE>
Employment Agreements
Messrs. Barry, Dace, Esposito, Mulstay and Wilson have employment
agreements or understandings with the Company providing for minimum compensation
levels of $80,000, $110,000, $80,000, $80,000, and $80,000 respectively, plus
bonuses based on percentages of Net Income Before Interest and Taxes ranging
from .75% to 5%. Additional bonus may be earned based upon appropriate
responsibility goal attainment. All agreements also provide for grants of stock
options and severance pay in case of involuntary termination.
1982 Employee Stock Option Plan
In 1982, the Company adopted an employee stock option plan (the "1982
Plan") for officers and other key employees, not including directors. Options
are non-transferable except in the case of death. Options currently outstanding
under the 1982 Plan generally vest and become exercisable in monthly
installments over a two or three-year period, with each installment remaining
exercisable for a five-year period after it vests. No options intended to be
incentive stock options under the Internal Revenue Code of 1986 ("Code") are
currently outstanding. No options may currently be granted under this Plan.
1992 Equity Incentive Plan
Awards granted under the 1992 Equity Incentive Plan (the "Equity
Incentive Plan") include a wide range of Common Stock-based awards. Officers and
other management employees of the Company are eligible to participate in the
Equity Incentive Plan. The maximum number of shares of Common Stock which may be
issued under the Equity Incentive Plan at any time is 20% of the outstanding
shares of the Company's Common Stock, except that no more than 500,000 shares
may be issued pursuant to incentive stock options. No awards may be granted
after the year 2002. The term of each stock option is to be determined by the
Compensation Committee but may not exceed ten years from the date of grant. The
option price of each stock option is payable in cash, in shares of the Company's
Common Stock, or by a combination thereof. The option agreements granted to date
provide that, in the event of a change of control of the Company, the exercise
of such options may be accelerated by the Committee.
Stock Option Plan for Non-Employee Directors
The Stock Option Plan for Non-Employee Directors is described below
under "Proposal No. 1."
PROPOSAL NO. 1
TO APPROVE THE STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS.
As mentioned above, it has been the Company's practice starting in the
late 1980's to conserve cash by compensating directors for their services
through the grant of stock options.
The Board of Directors proposes that the shareholders approve the 1997
Stock Option Plan for Non-Employee Directors (the "Non-Employee Directors
Plan"). The 1997 Plan is designed to maintain the Company's ability to attract
and retain the services of experienced and highly qualified outside directors
and to increase their proprietary interest in the Company's continued success.
The following summary description of the Non-Employee Directors Plan is
qualified in its entirety by reference to the full text of the Non-Employee
Directors Plan, which is attached to this Proxy Statement as Exhibit A.
If approved by the shareholders, the Non-Employee Directors Plan shall,
for the six fiscal years ending June 30, 2004, automatically provide grants of
3,600 options annually to each non-employee director of the Company (10,800
options in the case of the Chairman), except as noted below. Each grant shall
become vested and exercisable on the first day of the seventh month of each
fiscal year and the first day of the next fiscal year provided that the director
is then in office or has retired or is out of office by reason of ill health or
death. New directors will be granted options covering 1,800 shares for each
six-month period remaining in the fiscal year, effective as of the first day of
the month following their election to the Board. All options are exercisable at
100% of fair market value of the Company's Common Stock on the date of grant.
All options on each annual grant date shall expire eight years after
their date of grant. In the event of the death or the total and permanent
disability of the holder of any unexercised option while serving on the Board,
all outstanding options of such holder shall become immediately exercisable by
the holder's legal representative and shall continue to be exercisable until
their stated expiration date. Each option and all rights thereunder shall be
non-assignable and non-transferable other than by will or the laws of descent
and distribution.
An aggregate of 500,000 shares of Common Stock (subject to adjustment
as provided in the 1997 Plan) will be subject to the 1997 Plan. Shares subject
to options which terminate unexercised will be available for future option
grants. The options granted under the 1997 Plan shall be non-statutory options
not intended to qualify under Section 422 of the Code. The grant of options will
not result in taxable income to the non-employee director will result in taxable
ordinary income to the director and a corresponding deduction for the Company,
in each case equal to the difference between the option exercise price and their
fair market value on the date the option is exercised.
The 1997 Plan will be administered by a committee of one or more
non-participating directors or by the board, which will be authorized to
interpret the 1997 Plan but will have no discretion with respect to the
selection of directors to receive options, the number of shares subject to the
1997 Plan or to each grant thereunder, or the purchase price for shares subject
to options. The committee shall have no authority to materially increase the
benefits under the 1997 Plan. The Board may revise, amend, suspend or terminate
the 1997 Plan. However, any revision or amendment that changes the selection or
eligibility of directors to receive options, the number of shares subject to the
1997 Plan or to any option, the purchase price for shares subject to options, or
that materially increases benefits under the 1997 Plan will require the approval
of the Company's shareholders. Adjustments shall be made in the number and kind
of shares subject to the 1997 Plan and subject to subsequent and outstanding
options, and in the purchase price of outstanding options, in each such case to
reflect changes in the Company's Common Stock.
All options shall become exercisable and vested on the seventh business
day before the scheduled Date of a Change in Control. An optionee may at his
option require the Company to purchase his Option at its equivalent cash value,
based on fair market value, as determined by the Committee as of the effective
date of the Change in Control.
A "Change in Control" is defined to mean the occurrence of any of the
following events: (i) a third person, including a "group" as determined in
accordance with Section 13(d)(3) of the Securities Exchange Act of 1934
("Securities Exchange Act"), is or becomes the beneficial owner (as so
determined) of Common Stock having 30% or more of the total number of votes that
may be cast for the election of members of the Board; (ii) all or substantially
all of the assets and business of the Company are sold, transferred or assigned
to, or otherwise acquired by, any other entity or entities; or (iii) as a result
of, or in connection with, any cash tender or exchange offer, merger or other
business combination, sale of assets or contested election, or any combination
of the foregoing transactions (a "Transaction"), the persons who are members of
the Board before the Transaction shall cease to constitute a majority of the
Board of the Company or any successor to the Company; or (iv) unless the Board
otherwise directs by resolution adopted prior thereto, if a third person,
including a group, is or becomes the beneficial owner, directly or indirectly,
of 20% or more of the voting stock of the Company, or a proxy contest occurs,
and during a period of 24 months following such event the individuals who at the
occurrence of such event constituted the Board cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination
for election by the Company's shareholders, of each new director was approved by
a vote of at least three-quarters of the directors then still in office who were
directors at the occurrence of such event.
These provisions in the 1997 Plan accelerating vesting upon a Change in
Control, could be an "antitakeover defense" because, as a result of these
provisions, a Change in Control of the Company could be more difficult or
costly. This however, is not the Company's intention in adopting the 1997 Plan,
since the purpose of the 1997 Plan is to compensate directors for their services
without the expenditure of cash and to increase their ownership interest in the
Company.
Effective Date, Amendment, Termination and Expiration
The 1997 Plan became effective in June 1997 subject to approval by the
shareholders. No amendment or modification will become effective unless approved
by affirmative vote of the shareholders of the Company if such approval is
necessary or desirable for the continued validity of the 1997 Plan or its
compliance with Rule 16b-3 or any successor rule under the Securities Exchange
Act of 1934, any requirement arising through the listing of the Common Stock on
a securities exchange or inclusion in a quotation system, or any other rule or
regulation.
The following is a brief summary of the principal federal income tax
consequences under current federal income tax laws relating to awards under the
1997 Plan.
No taxable income will be realized by an option holder and no deduction
will be available to the Company upon the grant of an option. At the time of
exercise of an option, an option holder will realize taxable income at ordinary
income tax rates, and the Company will be entitled to a deduction in the amount
by which the then fair market value of the shares purchased exceeds the option
price of the shares. Upon the subsequent disposition of shares received upon
exercise of an option, an option holder will also realize income or loss in an
amount equal to the difference between the sales price of the shares and the
fair market value of the shares used for computing ordinary income or loss
realized in connection with the exercise of the option. The income or loss will
be a long- or short-term capital gain or loss depending upon the length of time
the shares have been held from the date as of which ordinary income or loss was
recognized in connection with the exercise of the option.
If an option holder tenders shares of the Company's Common Stock in
partial or full payment of the option price for shares to be acquired through
the exercise of an option, the option holder generally will not recognize any
taxable gain or loss on the tendered shares. In the case of a tender of shares
in partial or full payment of the option price, the option holder's tax basis in
the shares received upon exercise of the option is not uniform. The number of
shares acquired that equals the number of shares tendered will take the tax
basis of the tendered shares. The additional shares acquired in excess of the
number of shares tendered will have a tax basis equal to the ordinary income
realized on the exercise of an option.
Cash payments by the Company to an option holder upon surrender of the
right to exercise any stock option are taxable to the option holder at ordinary
income tax rates and deductible by the Company at the time of payment.
At this time all of the directors except the President are eligible to
receive options under the 1997 Plan. The market sales price of the Company's
Common Stock on the NASDAQ Small Cap Market on November 4, 1997 was $9.50 per
share.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 1997 STOCK
OPTION PLAN FOR NON-EMPLOYEE DIRECTORS.
OTHER MATTERS
In 1991, the Company agreed with Bowling Green Securities, Inc., an
investment banking firm owned by Mr. Utsch and in which Messrs. Auriana and
Utsch are principals, that such firm would render investment banking advice to
the Company and that, if any merger, acquisition, divestiture or analogous
transaction is successfully consummated as a result of its efforts, the Company
would pay a total fee related to the value of the company acquired or divested
on the basis of 5% of the first $2 million, 4% of the second $2 million, 3% of
the third $2 million, 2% of the fourth $2 million and 1% of any additional
amounts.
Mr. Delario, a director of the Company since 1992, holds an option to
purchase 75,000 shares of the Company's Common Stock as payment for managerial
and financial advisory services to be rendered in connection with mergers and
acquisitions.
SHAREHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
Proposals of shareholders intended to be presented at the next annual
meeting of shareholders of the Company must be received by the Company at its
offices at 1121 Old Walt Whitman Road, Melville, New York 11747-3005, no later
than July 23, 1998, and must satisfy the conditions established by the
Securities and Exchange Commission for shareholder proposals to be included in
the proxy statement of the Company at that meeting.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Reports on Form 4 for Messrs. Dace, Esposito, Mulstay and Wilson were
filed one day late which reports the grant of options. A report on Form 4 for
Mr. Mulstay was filed two months late and reported the exercise of an option and
the sale of the underlying shares. Reports on Form 4 for Messrs. Auriana,
Frieberg and Utsch were filed five days late reporting grants to directors of
options and shares. A report on Form 4 for Mr. Delario was filed nine months
late reporting the grant of an option.
MISCELLANEOUS
A representative of Richard A. Eisner & Company, the Company's
independent auditors, is expected to be present at the meeting. The
representative will be afforded an opportunity to make a statement and will be
available to respond to questions by shareholders.
Officers and regular employees of the Company, without extra
compensation, may solicit the return of proxies by mail, telephone, telegram and
personal interview. Certain holders of record such as brokers, custodians and
nominees are being requested to distribute proxy materials to beneficial owners
and to obtain such beneficial owners' instructions concerning the voting of
proxies.
The cost of solicitation of proxies (including the cost of reimbursing
banks, brokerage houses, and other custodians, nominees and fiduciaries for
their reasonable expenses in forwarding proxy soliciting material to beneficial
owners) will be paid by the Company.
TRANSACTION OF OTHER BUSINESS
The Board of Directors of the Company knows of no business
that will be presented for consideration at the Annual Meeting other than as
described in this Proxy Statement. If any other matters are properly brought
before the meeting or any adjournment or postponement thereof, it is the
intention of the persons named in the accompanying form of Proxy to vote the
Proxy on such matters in accordance with their best judgment.
By order of the Board of Directors
- ---------------------------------
Lawrence Auriana, Secretary
Dated: November 21, 1997
<PAGE>
MEDIWARE INFORMATION SYSTEMS, INC.
1997 Stock Option Plan
for Non-Employee Directors
<PAGE>
MEDIWARE INFORMATION SYSTEMS, INC.
1997 Stock Option Plan
for Non-Employee Directors
Purpose
The purpose of this 1997 Stock Option Plan for Non-Employee Directors (the
"Plan") of Mediware Information Systems, Inc. (the "Company"), is to compensate
directors for their services without the expenditure of cash and to increase the
ownership interest in the Company of non-employee directors whose services are
considered essential to the Company's continued progress.
Administration
The Plan may be administered by the Board of Directors of the Company (the
"Board"), or, if the Board so determines, a Committee (the "Committee")
consisting of one or more directors. The term "Board" includes the Committee.
Subject to the provisions of the Plan, the Board shall be authorized to
interpret the Plan, to establish, amend, and rescind any rules and regulations
relating to the Plan, and to make all other determinations necessary or
advisable for the administradtion of the Plan; provided, however, that the Board
shall have no discretion with respect to the selection of directors to receive
options under the Plan, the number of shares of stock subject to any such
options or the Plan, or the purchase price thereunder, and provided, further,
that the Board shall not have the authority to materially increase the benefits
accruing to participants under the Plan. The determination of the Board in the
administration of the Plan, as described herein, shall be final and conclusive
and binding upon all persons including, without limitation, the Company, its
shareholders and persons granted options under the Plan. The validity,
construction, and effect of the Plan and any rules and regulations relating to
the Plan shall be determined in accordance with the laws of the State of New
York.
Participation in the Plan
Directors of the Company who are not full-time employees of the Company or any
affiliate of the Company shall be eligible to participate in the Plan ("Eligible
Directors").
Shares Subject to the Plan
Subject to adjustment as provided in Section 7, an aggregate of 500,000 shares
of the Company's common stock ("Stock") shall be available for issuance upon the
exercise of options granted under the Plan. The shares of Stock deliverable upon
the exercise of options may be made available from authorized but unissued
shares or shares reacquired by the Company, including shares purchased in the
open market or in private transactions. If any option granted under the Plan
shall expire or terminate for any reason without having been exercised in full,
the shares subject to, but not delivered under, such option may again become
available for the grant of other options under the Plan. Shares deliverable to
the Company in full or partial payment of the purchase price payable pursuant to
paragraph (g) of Section 6 or withholding tax pursuant to paragraph (f) of
Section 6 shall not become available for the grant of other options under the
Plan.
Non-Statutory Stock Options
All options granted under the Plan shall be non-statutory options not intended
to qualify under Section 422 of the Internal Revenue Code of 1986.
Terms, Conditions and Form of Options
Each option granted under this Plan shall be evidenced or confirmed by a written
agreement in such form as the Committee shall from time to time approve. Such
options and agreements shall contain and be subject to the following terms and
conditions and the other terms and conditions of this Plan:
Options to purchase 3,600 shares of Stock (as adjusted
pursuant to Section 7) shall be granted automatically to each Eligible Director
(and options to purchase 10,800 shares of such Stock shall be granted
automatically to the Chairman of the Board) on the first day of each fiscal year
starting with fiscal 1998 through fiscal 2004. New directors will be granted
options covering 1,800 shares for each full six-month period remaining in the
fiscal year effective as of the first day of the month following their election
or appointment to the Board.
The purchase price per share of Stock for which each option is
exercisable shall be 100% of the fair market value per share of Stock on the
date the option is granted (or if such day is not a trading day then the next
preceding trading day). The fair market value on any given date shall be the
average of the high and low reported sales price of the Stock (or if such sales
prices are not reported, the bid and asked quotations) for the date in question
as generally reported for stocks quoted on NASDAQ or on the consolidated
reporting system.
Each option granted under the Plan will vest and will become
exercisable in two equal installments on the first day of the seventh month of
such fiscal year and on the first day of the next fiscal year after the date of
grant provided that the grantee shall be a director on such vesting date (except
as otherwise provided in clauses (d) and (e)). Each option granted under the
Plan shall expire eight years from the date of grant, and shall be subject to
earlier termination as hereinafter provided.
In the event of the termination of service on the Board by the
holder of any option, other than by reason of retirement, total and permanent
disability or death as set forth in paragraph (e) hereof, the then outstanding
options of such holder may be exercised only to the extent that they were
exercisable on the date of such termination. All exercisable options shall
remain exercisable until their stated expiration date. For purposes of this
Plan, the term "by reason of retirement" shall mean retirement pursuant to Board
policy.
In the event of termination of service by reason of retirement
(as defined above) or the total and permanent disability of the holder of any
option, each of the then outstanding options of such holder will continue to
mature and become exercisable in accordance with paragraph (c) above and the
holder may exercise the matured installments at any time until the expiration
date of the term of the option. In the event of the death of the holder of any
option, each of the then outstanding options of such holder will immediately
become exercisable in full and shall continue to be exercisable by the
optionee's representative until the expiration date of the term of the option.
If required by law for the deductibility of expense items for
income tax purposes, the Committee may cause to be made, as a condition
precedent to the exercise of an option, appropriate arrangements with the
optionee or his or her representative for the withholding of any federal, state,
local or foreign taxes. If so elected by the optionee or representative (which
election shall not be made so as to disqualify the Plan or transaction from
eligibility for exemption from Section 16(b) of the Securities Exchange Act of
1934 by reason of Rule 16b-3 thereunder), such withholding taxes may be paid by
authorizing the Company to withhold shares of Stock to be issued, or by
delivering to the Company shares of Stock owned by the optionee or
representative, in either case having a fair market value equal to the amount of
such taxes.
Options may be exercised only upon payment to the Company in
full of the purchase price of the shares to be delivered. At the election of the
optionee or his or her representative (subject to the limitations set forth in
paragraph (f) hereof), such payment shall be made in cash or in Stock, or in a
combination of cash and Stock. The sum of the cash and the fair market value of
such Stock shall be at least equal to the aggregate purchase price of the shares
to be delivered.
Adjustment upon Changes in Stock; Successor Corporation; Change in
Control
If there shall be any change in the Stock subject to the Plan
or to any option granted thereunder through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, exchange of stock
or other change in the corporate structure, appropriate adjustments shall be
made in the aggregate number and kind of shares or other securities or property
subject to the Plan, and the number and kind of shares or other securities or
property subject to outstanding and to subsequent option grants and in the
purchase price of outstanding options to reflect such changes.
The obligations of the Company under the Plan shall be binding
upon any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any successor
corporation succeeding to substantially all of the assets and business of the
Company. The Company agrees that it will make appropriate provisions for the
preservation of the rights of the holders of options under the Plan in any
agreement or plan which it may enter into or adopt to effect any such merger,
consolidation, reorganization or transfer or assets.
The following actions shall occur as a result of, or in
anticipation of, any Change in Control to assure fair and equitable treatment of
the holders of options:
all options shall become exercisable and vested on the seventh
business day before the scheduled date of any Change in Control;
the holder of an option may at his option, require the
Company to purchase his options at its equivalent cash value, based on
fair market value, as determined by the Board, as of a scheduled or
anticipated effective date of a Change in Control provided that the
purchase of the Option by the third "person" effectuating the "Change
in Control" at such equivalent cash value as of the date of the Change
in Control shall satisfy the Company's obligation under this clause
(ii).
A "Change in Control" shall mean the occurrence of any of the
following events and shall be deemed hostile unless the Board of Directors
declares by resolution adopted prior to the occurrence of such event that the
Board consents to such event:
a third "person", including a "group", as those
terms are used in Section 13(d) of the Securities Exchange Act
of 1934 ("Exchange Act") is or becomes the beneficial owner (as
that term is used in said Section 13(d)) of stock having thirty
percent (30%) or more of the total number of votes that may be
cast for the election of members of the Board;
all or substantially all of the assets and
business of the Company are sold, transferred or assigned to, or
otherwise acquired by, any other entity or entities;
as a result of, or in connection with, any cash
tender or exchange offer, merger or other business combination,
sale of assets or contested election, or any combination of the
foregoing transactions (a "Transaction"), the persons who are
members of the Board before the Transaction shall cease to
constitute a majority of the Board of the Company or any
successor to the Company; or
unless the Board otherwise directs by resolution
adopted prior thereto, if a third "person", including a "group"
(as those terms are used in Sections 13(d) of the Exchange Act)
is or becomes the beneficial owner (as that term is used in
Section 13(d) of the Exchange Act), directly or indirectly, of
capital stock having 20% or more of the total number of votes
that may be cast for the election of directors or a proxy
contest occurs, and, during the period of twenty-four months
following such event, the individuals who at the occurrence of
such event constituted the Board cease for any reason to
constitute at least a majority thereof, unless the election, or
the nomination for election by the Company's shareholders, of
each new director was approved by a vote of at least
three-quarters of the directors then still in office who were
directors at the occurrence of such event.
Options Non-Assignable and Non-Transferable
Each option and all rights thereunder shall be non-assignable and
non-transferable other than by will or the laws of descent and distribution and
shall be exercisable during the holder's lifetime only by the holder or the
holder's guardian or legal representative.
Limitation of Rights
Neither the Plan, nor the granting of an option nor any other
action taken pursuant to the Plan, shall constitute or be evidence of any
agreement or understanding, express or implied, that the director has a right to
continue as a director for any period of time, or at any particular rate of
compensation.
An optionee shall have no rights as a shareholder with respect
to the shares covered by options granted hereunder until the date of the
issuance of a stock certificate therefor, and no adjustment will be made for
dividends or other rights for which the record date is prior to the date such
certificate is issued.
Effective Date and Duration of Plan
The Plan shall become effective on July 1, 1997 subject to approval by the
shareholders at the first Meeting of Shareholders held after the end of the 1997
fiscal year. The period during which option grants shall be made under the Plan
shall terminate on June 30, 2004, but such termination shall not affect the
terms of any then outstanding options.
Amendment, Suspension or Termination of the Plan
The Board of Directors may suspend or terminate the Plan or revise or amend it
in any respect whatsoever; provided, however, that without approval of the
shareholders, no revision or amendment shall change the selection or eligibility
of directors or categories of directors to receive options under the Plan, the
amount or price of securities or options to be awarded, the timing of options or
awards, the number of shares of Stock subject to any options or the Plan, the
exercise or purchase price thereunder, or materially increase the benefits
accruing to participants under the Plan, and further provided, that no amendment
or termination shall, when taken as a whole, adversely and materially affect the
rights of any recipient of a previously granted option without his or her
consent unless the amendment or termination is necessary or desirable for the
continued validity of the Plan or its compliance with Rule 16b-3 or any
successor rules under the Securities Exchange Act of 1934 or any other rule or
regulation or any agreement with a securities exchange or quotation system.
Notice
Any written notice to the Company required by any of the provisions of this Plan
shall be addressed to the Secretary of the Company and shall become effective
when it is received.
Use of Proceeds
Proceeds from the sale of Stock pursuant to options granted under the Plan shall
constitute general funds of the Company.
Fractional Shares
No fractional shares of Stock shall be issued pursuant to options granted
hereunder, but in lieu thereof, the cash value of such fractional share shall be
paid.
Compliance with Law
All options shall be subject to compliance with all applicable laws and each
option agreement shall so provide and shall contain appropriate provisions to
that end.
<PAGE>
PROXY
MEDIWARE INFORMATION SYSTEMS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Lawrence Auriana, Les N. Dace
and Hans Utsch, and each of them, acting alone or jointly, as attorneys and
agents, with full power of substitution, to vote as proxy all of the shares of
Common Stock standing in the name of the undersigned at the Annual Meeting of
the Shareholders of Mediware Information Systems, Inc., to be held at 140 East
45th Street, 43rd Floor, New York, New York 10017 (the offices of The Kaufmann
Fund Inc.) at 10:00 a.m. on January 6, 1998, and any adjournments thereof, with
respect to all matters as may properly come before the meeting or any
adjournments thereof. Receipt of Notice of Meeting dated November 21, 1997 is
hereby acknowledged. The Board of Directors recommends a vote "FOR" the election
of the three nominees as Class III directors and "FOR" the approval of the 1997
Stock Option Plan for Non-Employee Directors.
1. ELECTION OF CLASS III DIRECTORS:
NOMINEES:LAWRENCE AURIANA, JONATHAN H. CHURCHILL AND CLINTON G. WEIMAN
_____ FOR ALL LISTED NOMINEES _____ WITHHOLD AUTHORITY(EXCEPT AS MARKED)
___________________ (To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided above.)
PROPOSAL NO. 2. APPROVAL OF THE 1997 STOCK OPTION PLAN FOR NON-EMPLOYEE
DIRECTORS:
________ AGAINST _________ FOR ________ ABSTAIN
33. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE SIGN AND DATE ON THE REVERSE SIDE
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEE DIRECTORS
NAMED ON THE REVERSE SIDE AND "FOR" THE APPROVAL OF THE 1997 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS.
Dated ______________________, 1997
(Signature(s)) ___________________________
---------------------------
*Please sign exactly as name(s) appear(s) to the left. If joint account, all
joint owners should sign. When signing as attorney, trustee, administrator,
executor, etc., state full title.
PLEASE DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY TO THE OFFICE OF LAWRENCE
AURIANA, 140 EAST 45TH STREET, 43RD FLOOR NEW YORK, NY 10017.
