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:
[ ] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
QUANTECH LTD.
(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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing:
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
QUANTECH LTD.
815 Northwest Parkway, Suite 100
Eagan, Minnesota 55121
Telephone (651) 647-6370
Fax (651) 647-6369
Web Page: www.quantechltd.com
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 5, 2000
--------------------
TO THE SHAREHOLDERS OF QUANTECH LTD.
Please take notice that the Annual Meeting of Shareholders of Quantech Ltd.
(the "Meeting") will be held, pursuant to due call by the Board of Directors of
the Company, at the Minneapolis Hilton and Towers, 1001 Marquette Avenue,
Minneapolis, Minnesota on Tuesday, December 5, 2000, at 3:30 p.m., or at any
adjournment or adjournments thereof, for the purpose of considering and taking
appropriate action with respect to the following:
1. To elect two (2) Class 2 directors for a term of three years;
2. To transact any other business as may properly come before the Meeting
or any adjournments thereof.
Pursuant to due action of the Board of Directors, shareholders of record on
October 24, 2000, will be entitled to vote at the Meeting or any adjournments
thereof.
A Proxy for the Meeting is enclosed herewith. You are requested to fill in
and sign the Proxy, which is solicited by the Board of Directors, and mail it
promptly in the enclosed envelope.
Eagan, Minnesota Robert Case
October 31, 2000 Chief Executive Officer
<PAGE>
QUANTECH LTD.
815 Northwest Parkway, Suite 100
Eagan, Minnesota 55121
Telephone (651) 647-6370
Fax (651) 647-6369
Web Page: www.quantechltd.com
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PROXY STATEMENT
--------------------
Annual Meeting of Shareholders - December 5, 2000
INFORMATION CONCERNING SOLICITATION OF VOTING
This Proxy Statement is furnished by the Board of Directors of Quantech
Ltd. (the "Company") in connection with the solicitation of proxies to be used
at the Annual Meeting of Shareholders (the "Meeting") of the Company to be held
on Tuesday, December 5, 2000, at 3:30 p.m. Central Time, at the Minneapolis
Hilton and Towers, 1001 Marquette Avenue, Minneapolis, Minnesota 55403, and at
all adjournments thereof for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders. ANY PROXY IN WHICH NO
DIRECTION IS SPECIFIED WILL BE VOTED IN FAVOR OF EACH OF THE MATTERS TO BE
CONSIDERED AND IN FAVOR OF THE DIRECTOR NOMINEES LISTED HEREIN. This Proxy
Statement and the accompanying Annual Report, Notice and Proxy are being mailed
to shareholders on or about October 31, 2000.
The close of business on October 24, 2000 has been fixed as the record date
for the determination of shareholders entitled to receive notice of and to vote
at the Meeting. At that date, the Company's outstanding voting securities
consisted of 18,250,587 shares of common stock, no par value (the "Common
Stock"). On all matters which will come before the Meeting, each shareholder or
his or her proxy will be entitled to one vote for each share of Common Stock of
which such shareholder was the holder of record on the record date.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time prior to its use by: (I) delivering to the principal
office of the Company a written notice of revocation; or (II) filing with the
Company a duly executed Proxy bearing a later date. Proxies not revoked will be
voted in accordance with the choice specified by shareholders by means of the
ballot provided on the Proxy for that purpose. Proxies which are signed but
which lack any such specification will, subject to the following, be voted in
favor of the proposals set forth in the Notice of Meeting and in favor of the
number and slate of directors proposed by the Board of Directors and listed
herein. If a shareholder abstains from voting as to any matter, then the shares
held by such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
such matter, but shall not be deemed to have been voted in favor of such matter.
Abstentions, therefore, as to any proposal will have the same effect as votes
against such proposal. If a broker returns a "non-vote" proxy, indicating a lack
of voting instructions by the beneficial holder of the shares and a lack of
discretionary authority on the part of the broker to vote on a particular
matter, then the shares covered by such non-vote proxy shall be deemed present
at the meeting for purposes of determining a quorum but shall not be deemed to
be represented at the meeting for purposes of calculating the vote required for
approval of such matter.
<PAGE>
The costs of this solicitation will be borne by the Company. The Company
will request brokerage houses and other nominees, custodians and fiduciaries to
forward soliciting material to beneficial owners of the Company's Common Stock.
The Company will reimburse brokerage firms and other persons representing
beneficial owners for their expenses in forwarding solicitation materials to
beneficial owners. Proxies are being solicited primarily by mail, but, in
addition, officers and regular employees of the Company may solicit proxies
personally, by telephone, by telegram or by special letter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND EXECUTIVE MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of October 10, 2000: (I) by each of
the executive officers of the Company named in the Summary Compensation Table;
(II) by each director and director nominee; (III) by all current directors and
executive officers of the Company as a group; and (IV) by each person known to
the Company to be the beneficial owner of more than 5% of the outstanding shares
of the Company's Common Stock. Except as otherwise indicated, each shareholder
has sole voting and investment power with respect to the shares beneficially
owned.
Number of Shares Percent of Shares
Officers and Directors(1) Beneficially Owned Beneficially owned
------------------------------------ ------------------ ------------------
Robert Case 653,600 (2) 3.4%
Gregory G. Freitag 604,322 (3) 3.2%
Thomas R. Witty 156,667 (4) 0.8%
Robert W. Gaines, M.D. 2,062,853 (5) 10.4%
James F. Lyons 1,114,575 (6) 6.0%
Richard W. Perkins 131,667 (7) 0.7%
Edward E. Strickland 1,053,610 (8) 5.7%
All directors and executive officers
as a group (7 persons) 5,777,294 (9) 26.5%
5% Shareholders
------------------------------------
Perkins Capital Management, Inc. 1,410,628 (10) 7.7%
Special Situations Private Equity Fund, L.P. 982,500 (11) 5.4%
(1) The address of such persons is 815 Northwest Parkway, Suite 100, Eagan,
Minnesota 55121.
(2) Includes 604,648 shares purchasable upon exercise of options and
warrants that are currently exercisable.
(3) Includes 588,095 shares purchasable upon exercise of options and
warrants that are currently exercisable.
(4) Includes 156,667 shares purchasable upon exercise of options that are
currently exercisable.
(5) Includes 215,001 shares purchasable upon exercise of options and
warrants that are currently exercisable. Also includes 454,545 shares
and 1,345,455 shares purchasable upon exercise of a warrant that is
currently exercisable held by Millennium Medical Systems of which
entity Dr. Gaines is the sole owner.
(6) Includes 256,855 shares purchasable upon exercise of options and
warrants that are currently exercisable.
(7) Includes 56,667 shares purchasable upon exercise of options and
warrants that are currently exercisable. Does not include shares held
by Perkins Capital Management as to which Mr. Perkins disclaims
beneficial ownership.
<PAGE>
(8) Includes 222,602 shares that may be purchased upon exercise of options
and warrants that are currently exercisable. Also includes 293,648
shares and 6,380 shares that may be purchased upon exercise of a
warrant that is currently exercisable held by the Strickland Family
Limited Partnership of which entity Mr. Strickland is a general
partner.
(9) Includes 2,100,535 shares purchasable upon exercise of options and
warrants that are currently exercisable or exercisable within 60 days
of the record date. Also includes 293,648 shares and 6,380 shares that
may be purchased upon exercise of a warrant that is currently
exercisable held by the Strickland Family Limited Partnership of which
entity Mr. Strickland is a general partner. Also includes 454,545
shares and 1,345,455 shares that may be purchased upon exercise of a
warrant that is currently exercisable held by Millennium Medical
Systems of which entity Dr. Gaines is sole owner.
(10) Perkins Capital Management, Inc. reports voting power over 550,000 such
shares and investment power over all such shares. Perkins Capital
Management's address is 730 East Lake St., Wayzata, MN 55391.
(11) Special Situations Private Equity Fund's address is 153 East 53 Street,
New York, New York 10022.
PROPOSAL ONE
ELECTION OF DIRECTORS
General
The Company's Bylaws provide that the Board of Directors consist of three
or more persons and be divided into three classes of directors of as nearly
equal size as possible. Directors are elected for a term of three years and the
terms are staggered so that the class of directors whose term expires is elected
each year by the shareholders of the Company. There are currently five persons
serving as directors. The Company is proposing that two directors be elected at
the Meeting to serve as Class 2 directors with a term of three years expiring in
2003, or until their successors are elected and qualified. The Board of
Directors has nominated for election Mr. Richard W. Perkins and Mr. Edward E.
Strickland. Mr. Perkins and Mr. Strickland are currently Class 2 directors of
the Company.
Board Recommendation
The Board of Directors recommends that the nominees, Mr. Perkins and Mr.
Strickland, be elected as Class 2 directors to hold office for a term of three
years and until their successors are duly elected and qualified.
Proxies and Voting
Proxies solicited by the Board of Directors will, unless otherwise
directed, be voted to elect the nominees. The affirmative vote of the greater of
(I) a majority of shares of Common Stock present and entitled to vote at the
Meeting or (II) a majority of the voting power of the minimum number of shares
that would constitute a quorum for the transaction of business at the Meeting is
necessary to elect the nominees. A shareholder submitting a Proxy may vote for
the nominees for election to the Board of Directors or may withhold his or her
vote. The nominees, Mr. Perkins and Mr. Strickland, have consented to being
named as nominees. Should Mr. Perkins or Mr. Strickland become unable to serve
if elected, the Proxy Agents named in the Proxy will exercise their voting power
in favor of such other person or persons as the Board of Directors of the
Company may recommend. The Company's Articles of Incorporation prohibit
cumulative voting.
<PAGE>
Nominees, Directors and Executive Officers
Class 1 Directors (Term Expiring 2002)
Robert Case, age 56, has been Chief Executive Officer of Quantech since
June 1997 and a director of Quantech since October 1996. He founded Case +
Associates, Inc. in 1978 and has been its President since such time. Case +
Associates is a leading consultant in the research, design, development, and
engineering of medical products. Its consulting activities include work for
major multi-national, as well as development stage medical companies, in the
design of products from diagnostic instrumentation and implantable devices to
surgical instruments. He has served as Chairman of the Industrial Designers
Society of America, and was a member of its national board of directors. Mr.
Case has also been a longtime member of the Biomedical Marketing Association. In
addition, Mr. Case conducts both U.S. and European seminars in product
definition and development for Frost & Sullivan, the Society of Plastics
Engineers, the Society for the Advancement of Medical Packaging Institute, and
Northwestern University. His educational background includes product design,
engineering, and marketing at Syracuse University, the Illinois Institute of
Technology, and DePaul University. Mr. Case is also a director of HTS
BioSystems, Inc., the Company's majority owned subsidiary.
Robert W. Gaines, Jr., M.D., age 58, has been a director of Quantech
since December 1999. Dr. Gaines practices orthopaedic surgery with the Columbia
Orthopaedic Group in Columbia, Missouri, and was a Professor of Orthopaedic
Surgery and Director of Pediatric Orthopaedics and Spine Surgery at the
University of Missouri School of Medicine from 1989 to 2000. Dr. Gaines is
extensively published with over 100 articles, papers, chapters in books and
professional exhibits, and has presented over 100 lectures as a visiting
scholar. He is also active in public and community service activities including
efforts to improve orthopaedic health care for children. Dr. Gaines received his
M.D. from Duke University.
Class 2 Nominees (Term Expiring 2003)
Richard W. Perkins, age 69, has been a director of the Company since
September 1995. Since 1985, Mr. Perkins has been President, Chief Executive
Officer and a director of Perkins Capital Management, Inc., Wayzata, Minnesota.
Prior thereto he was a Senior Vice President of Piper Jaffray Inc., Minneapolis,
Minnesota. He is also a director of Bio-Vascular, Inc., PW Eagle, Inc.,
iNTELEFILM Corporation, Lifecore Biomedical, Inc., Nortech Systems, Inc.,
Harmony Holdings, Inc., Paper Warehouse, Inc., CNS, Inc. and Vital Images, Inc.
Edward E. Strickland, age 73, has been a director of the Company since
September 1995. Mr. Strickland has been an independent financial consultant for
more than seven years. From October 1990 to January 1991, he performed the
duties of Chief Executive Officer while serving on the Executive Committee of
the Board of Directors of Reuter, Inc. where he currently serves as a director.
Mr. Strickland also serves as a director of Bio-Vascular, Inc., Hector
Communications Corp. and Communication Systems, Inc.
Class 3 Director (Term Expiring 2001)
James F. Lyons, age 70, has been Chairman of the Board of the Company since
June 1997, and a director of the Company since September 1995. From September
1993 through October 1994, when he retired, Mr. Lyons was Chief Executive
Officer of Bio-Vascular, Inc., a cardiovascular medical products company. From
1978 through 1990, Mr. Lyons was President and Chief Executive Officer of
Bio-Medicus, Inc., a cardiovascular medical products company. Mr. Lyons was also
a director and Chairman of the Board from 1991 through 1996 of AVECOR
Cardiovascular Inc. and was a director of ATS Medical, Inc., Bio-Vascular, Inc.
and Spine-Tech, Inc.
<PAGE>
Executive Officers
Gregory G. Freitag, age 38, has been Chief Operating Officer of Quantech
since June 1997 and Chief Financial Officer and Secretary of Quantech since
December 1995. From 1987 until joining Quantech, Mr. Freitag was a lawyer with
the Minneapolis, Minnesota law firm of Fredrikson & Byron, P.A. As a stockholder
with Fredrikson & Byron he practiced in the corporate, securities and merger and
acquisition areas of law. Mr. Freitag has his J.D. and CPA, has served on
securities advisory committees to the Minnesota Commissioner of Commerce, was
included in the Minnesota Business Guide to Law & Leading Attorneys, and
received from City Business its "40 under 40" award recognizing Mr. Freitag as
one of the Twin Cities' next generation of business and community leaders. Mr.
Freitag is also President and a director of HTS BioSystems.
Thomas R. Witty, Ph.D., age 53, was an Organizational and Program
Management Consultant to Quantech Ltd. from August 1997 until October 1997 when
he joined Quantech as Vice President of Research and Development. Dr. Witty has
been Executive Vice President of Research and Development since September 1999.
Dr. Witty has over 24 years of experience in the field of medical diagnostics.
Dr. Witty has had senior program management responsibilities for clinical
instrument systems while at Rohm and Haas, Becton Dickinson, Sanofi and ICN
Pharmaceuticals. In addition, he was a key contributor to the development of a
near patient diagnostic system at Biocircuits and was on the Board of Directors
of SeaLite Sciences, a small biotechnology company. In these roles, Dr. Witty
has led over 20 products to market through clinical trials and the FDA. Dr.
Witty received his Doctor of Philosophy in Medicinal Chemistry from Purdue
University and his Bachelor of Arts degree with honors in chemistry from
Macalester College in St. Paul, Minnesota. Further academic training was
completed under an NIH Fellowship at the University of Illinois and as a
Professor at Colorado State University.
Director Compensation
The Company does not currently compensate its directors. The Company has,
however, granted options to its directors from time to time. The 1998 Stock
Option Plan provides that non-employee directors will be granted an option to
purchase 10,000 shares upon election to the Board and an option to purchase
2,500 shares after each shareholders meeting if the director is re-elected or
his term of office continues after such shareholders meeting. The Board may also
grant additional options at its discretion. In addition, during fiscal 2000, Mr.
Case was granted an option to purchase 100,000 shares of HTS BioSystems common
stock at an exercise price of $2.50 per share for his services as a director of
HTS BioSystems.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the cash and noncash compensation for each
of the last three fiscal years awarded to, or earned by, the Chief Executive
Officer of the Company and to all executive officers whose compensation exceeded
$100,000 for fiscal 2000.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
----------------------------------- -------------
Other
Annual Securities All Other
Name and Fiscal Salary Bonus Compensation Underlying Compensation
Principal Position Year ($) ($) ($) Options (#) ($)
--------------------------- ------- --------- ------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert Case, 2000 $144,000 0 0 100,000 (1) 0
CEO 1999 $82,500 0 0 525,000 0
1998 $0 0 0 102,500 0
Gregory G. Freitag, 2000 $144,000 0 0 100,000 (1) 0
COO, CFO 1999 $128,750 0 0 510,000 0
1998 $125,000 0 0 115,000 0
Thomas R. Witty, Ph.D., 2000 $144,000 0 0 15,000 (1) 0
Executive VP of R&D 1999 $128,750 0 0 140,000 0
1998 $93,750 0 $33,000 (2) 50,000 0
------------------------
</TABLE>
(1) Represents an option to purchase common stock of HTS BioSystems.
(2) Other Annual Compensation for Mr. Witty consisted of amounts paid for
consulting services before he became a Quantech employee.
<PAGE>
Option/SAR Grants During Fiscal Year 2000
The following table provides information related to options granted to the
named executive officers during fiscal 2000. The Company has not granted any
stock appreciation rights.
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------------------------------------------------
Number of Securities Percent of Total
Underlying Options/SARs
Options/SARs Granted to Exercise or
Granted Employees in Base Price Expiration
Name (#) Fiscal Year ($/Share) Date
----------------------- --------------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
Robert Case 100,000 (1) 8.2% $2.50 3/1/05
Gregory G. Freitag 100,000 (2) 8.2% $2.50 3/1/05
Thomas R. Witty 15,000 (3) 1.2% $2.50 3/1/05
------------------------
</TABLE>
(1) Represents an option to purchase common stock of HTS BioSystems. Such
option is a non-qualified stock option with 33,334 shares immediately
exercisable, 33,333 shares exercisable on March 1, 2001, and 33,333 shares
exercisable on March 1, 2002.
(2) Represents an option to purchase common stock of HTS BioSystems. Such
option is an incentive stock option with 33,334 shares immediately
exercisable, 33,333 shares exercisable on March 1, 2001, and 33,333 shares
exercisable on March 1, 2002.
(3) Represents an option to purchase common stock of HTS BioSystems. Such
option is a non-qualified stock option with 5,000 shares immediately
exercisable, 5,000 shares exercisable on March 1, 2001, and 5,000 shares
exercisable on March 1, 2002.
Option Exercises and Value of Options at End of Fiscal Year 2000
The following table sets forth, for each of the executive officers named in
the Summary Compensation Table above, the year-end value of unexercised options.
<TABLE>
<CAPTION>
Number of Unexercised
Securities Underlying Value of Unexercised
Shares Options at End In-the-Money Options
Acquired of Fiscal 2000 at End of Fiscal 2000 (1)
on Value ----------------------------- -------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
--------------- --------- --------- ----------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Robert Case 0 N/A 598,334 41,666 $783,334 $41,666
0 N/A 33,334 (2) 66,666 (2) $0 (2) $0 (2)
Gregory G. 0 N/A 583,334 41,666 $757,084 $41,666
Freitag 0 N/A 33,334 (2) 66,666 (2) $0 (2) $0 (2)
Thomas R. 0 N/A 156,667 33,333 $136,667 $33,333
Witty 0 N/A 5,000 (2) 10,000 (2) $0 (2) $0 (2)
------------------------
</TABLE>
(1) Value for Quantech options based on the market value of Quantech common
stock on June 30, 2000 ($2.50 per share closing price) less the exercise
price. Value for HTS BioSystems options based on the common stock price on
June 30, 2000 of $2.50 per share as established by the HTS board less the
exercise price.
(2) Represents an option to purchase common stock of HTS BioSystems.
<PAGE>
Compensation Arrangements
The Company entered into "at will" employment agreements with Mr. Case and
Mr. Freitag in December 1997, and with Mr. Witty in November 1997 (the
"Employment Agreements"). Mr. Case's employment agreement provides that if his
employment is terminated by the Company due to a sale of substantially all of
the assets of the Company or a change in the control of more than 50% of the
Company's Capital Stock by an acquiring party, he would receive a lump-sum
payment of $150,000. Mr. Freitag's employment agreement provides for a base
salary of $125,000 per year, which was increased to $144,000 per year on July 1,
1999, and further provides that if his employment is terminated by the Company
"without cause" he would receive six months' salary, except in the event his
employment is terminated as a result of a sale of substantially all of the
assets of the Company or a change in the control of more than 50% of the
Company's Common Stock by an acquiring party he would receive a lump-sum payment
of one year's salary and bonus. Mr. Witty's employment agreement provides for a
base salary of $125,000 per year, which was increased to $144,000 per year on
July 1, 1999, and further provides that in the event his employment is
terminated as a result of a sale of substantially all of the assets of the
Company or a change in the control of more than 50% of the Company's Common
Stock by an acquiring party he would receive a lump-sum payment of six months'
salary.
Certain Transactions
In March 1998, Quantech issued warrants to purchase 60,000 and 15,000
shares of its common stock to James F. Lyons and Edward E. Strickland,
respectively, Quantech directors, as compensation for the guarantee of a
$500,000 bank loan to Quantech. The warrants have an exercise price of $0.75 per
share. The amount under such loan was increased by $250,000 in August 1998 and
such directors received additional options in September 1998 to purchase an
aggregate of 75,000 shares of common stock at $1.13 per share for their
extension of the guarantee to this amount. In January 2000, the loan term was
extended by one year and such directors received additional options to purchase
an aggregate of 80,000 shares of common stock at $1.25 per share, and in July
2000 the loan amount was increased by $250,000 and such directors received
additional options to purchase an aggregate of 50,000 shares of common stock at
$2.75 per share.
In November 1998, Quantech issued a warrant to purchase 1,800,000 shares
of common stock to Millennium Medical Systems, of which entity Dr. Robert W.
Gaines, a Director Nominee of the Company, is sole owner, in exchange for
engineering development work. The warrant has an exercise price of $1.10 per
share and can be exercised any time before November 13, 2003.
In September 1999, Quantech sold a warrant to purchase 175,000 shares of
common stock to Dr. Robert W. Gaines, a Director Nominee of the Company, for
$10,000. The warrant has an exercise price of $1.25 per share and can be
exercised any time before September 9, 2004.
In April and May 2000, Robert Case, Quantech CEO, was provided a loan in
the aggregate amount of $141,000 secured by Quantech options and common stock.
The loan was provided pursuant to commercially reasonable terms. Such loan was
provided to Mr. Case as an employment benefit in recognition of his transition
to permanent CEO of Quantech. The loan has an interest rate of 8% per year.
In August 2000, Quantech issued a warrant to purchase 20,000 shares of
common stock to Edward Strickland, a Quantech director, as compensation for a
$100,000 loan to the Company. The warrant has an exercise price of $2.75 per
share and can be exercised any time before August 15, 2005.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any shareholder proposals intended to be presented at the Company's next
annual meeting of shareholders must be received by the Company at its office
located at 815 Northwest Parkway, Suite 100, Eagan, Minnesota 55121 on or before
July 3, 2001 to be considered for inclusion in the Company's proxy statement and
form of proxy relating to such meeting. Also, if a shareholder proposal intended
to be presented at the 2000 annual meeting but not included in the Company's
proxy statement and proxy is received by the Company after September 16, 2001,
then management named in the Company's proxy form for the 2000 annual meeting
will have discretionary authority to vote the shares represented by such proxies
on the shareholder proposal, if presented at the meeting, without including
information about the proposal in the Company's proxy materials.
<PAGE>
OTHER MATTERS
Board of Directors and Committees
The Board of Directors held four meetings during the fiscal year ended June
30, 2000. Each director attended all of these meetings. The directors also meet
informally from time to time to discuss issues concerning the Company and take
action through unanimous written consent. The Company has Audit and Compensation
Committees, but does not have a Nominating Committee of the Board of Directors.
The Audit Committee is comprised of directors Perkins, Lyons and Strickland
with Mr. Strickland as Chairman. The Audit Committee has the responsibility of
selecting Quantech's independent auditors and communicating with such auditors
on matters of auditing and accounting. The Audit Committee met once during the
fiscal year ended June 30, 2000 and all members were present.
The Compensation Committee is also comprised of directors Perkins, Lyons
and Strickland with Mr. Lyons as Chairman. The Compensation Committee has the
responsibility of reviewing on an annual basis all officer compensation and
administering any employee options and plans related thereto. The Compensation
Committee did not meet formally during the fiscal year ended June 30, 2000, but
did meet informally to discuss compensation issues and take action through
unanimous written consent.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. Based solely on review of the copies of such forms
furnished to the Company, or written representations that no Forms 5 were
required, the Company believes that during the fiscal year ended June 30, 2000,
all Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were satisfied.
Independent Auditors
McGladrey & Pullen, LLP served as the Company's independent auditors for
the fiscal year ended June 30, 2000 and has been selected to serve for the
current year. Representatives of McGladrey & Pullen, LLP will be present at the
Meeting, will be given an opportunity to make a statement regarding financial
and accounting matters of the Company if they so desire, and will be available
to respond to appropriate questions from shareholders.
Form 10-KSB
The Company will furnish without charge to each person whose proxy is
being solicited, upon written request of any such person, a copy of the
Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 2000,
as filed with the Securities and Exchange Commission, including the Financial
Statements. The Company will furnish to any such person any exhibit described in
the list accompanying the Form 10-KSB upon the payment, in advance, of
reasonable fees related to the Company's furnishing such exhibit(s). Requests
for copies of such report and/or exhibit(s) should be directed to Gregory
Freitag, Chief Financial Officer, at the Company's principal address.
<PAGE>
Other Business
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Meeting in accordance with the directions
given. In voting by proxy in regard to the matters presented, shareholders may
vote in favor of the item, against the item or abstain from voting. Shareholders
should specify their choices on the enclosed Proxy. Any Proxy on which no
direction is specified will be voted in favor of each of the matters to be
considered.
The Board of Directors does not intend to bring any matters before the
Meeting other than as stated in this Proxy Statement and is not aware that any
other matters will be presented for action at the Meeting. Should any other
matters be properly presented, the persons named in the enclosed form of Proxy
will vote the Proxy with respect thereto in accordance with their best judgment,
pursuant to the discretionary authority granted by the Proxy.
Dated: October 31, 2000 Robert Case
Chief Executive Officer
<PAGE>
Quantech Ltd.
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PROXY FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 5, 2000
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert Case and Gregory G. Freitag,
officers of the Company, with full power of substitution, his or her Proxy to
represent and vote, as designated below, all shares of Quantech Ltd. registered
in the name of the undersigned, with the powers the undersigned would possess if
personally present at the Company's 2000 Annual Meeting of Shareholders to be
held on Tuesday, December 5, 2000, at 3:30 p.m. Central Time, at the Minneapolis
Hilton and Towers, 1001 Marquette Avenue, Minneapolis, Minnesota 55403, and at
any adjournment thereof, hereby revoking all proxies previously given with
respect to the meeting.
The Board of Directors recommends that you vote "FOR" each proposal
1. ELECT RICHARD W. PERKINS AS A CLASS 2 DIRECTOR OF THE COMPANY:
[ ] FOR nominee [ ] WITHHOLD AUTHORITY to vote for nominee
ELECT EDWARD E. STRICKLAND AS A CLASS 2 DIRECTOR OF THE COMPANY:
[ ] FOR nominee [ ] WITHHOLD AUTHORITY to vote for nominee
2. OTHER MATTERS: In their discretion, the appointed Proxies are
[ ] Authorized [ ] Not Authorized
to vote upon such other business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR PROPOSAL #1 AND WILL BE DEEMED TO
GRANT AUTHORITY UNDER PROPOSAL #2.
Dated: __________, 2000 ___________________________________________
___________________________________________
PLEASE DATE AND SIGN ABOVE exactly as
name(s) appear at the left. Executors,
administrators, trustees, guardians, etc.,
should indicate capacity when signing. For
stock held in Joint Tenancy, each joint
owner should sign.
