SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
DEVELOPED TECHNOLOGY RESOURCE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
DEVELOPED TECHNOLOGY RESOURCE, INC.
12800 WHITEWATER DRIVE, SUITE 170
MINNETONKA, MINNESOTA 55343
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1997
To the Shareholders of
Developed Technology Resource, Inc.
The Annual Meeting of the Shareholders of Developed Technology
Resource, Inc. (the "Company" or "DTR"), will be held on Thursday, April 24,
1997, at 4 p.m. Minneapolis Time, at the offices of Lurie, Besikof, Lapidus &
Co., LLP, 2501 Wayzata Boulevard, Minneapolis, MN 55405, for the following
purposes:
1. To elect three directors of the Company to serve until the next Annual
Meeting of Shareholders and until their successors are elected and have
qualified.
2. To approve the Amendment dated September 30, 1996, to the 1992 Stock
Option Plan.
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on March 7,
1997, as the record date for the determination of shareholders entitled to vote
at the Annual Meeting and to receive notice thereof. The transfer books of the
Company will not be closed.
A PROXY STATEMENT AND FORM OF PROXY ARE ENCLOSED. SHAREHOLDERS ARE
REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY TO WHICH NO POSTAGE NEED
BE AFFIXED IF MAILED IN THE UNITED STATES. IT IS IMPORTANT THAT PROXIES BE
RETURNED PROMPTLY WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON.
SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON
IF THEY DESIRE.
By Order of the Board of Directors
John P. Hupp
Secretary and President
Minnetonka, Minnesota U.S.A.
February 26, 1997
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy, date
and sign it, and return it in the envelope provided, which is addressed for your
convenience. No postage is required if mailed in the United States.
PLEASE MAIL YOUR PROXY PROMPTLY
DEVELOPED TECHNOLOGY RESOURCE, INC.
12800 WHITEWATER DRIVE, SUITE 170
MINNETONKA, MINNESOTA 55343
TELEPHONE (612) 938-7080
---------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 1997
---------------------
GENERAL INFORMATION
This proxy statement is furnished to shareholders by the Board of
Directors of Developed Technology Resource, Inc. (the "Company") for
solicitation of proxies for use at the Annual Meeting of Shareholders to be held
on Thursday, April 24, 1997, at 4:00 pm at Lurie, Besikof, Lapidus & Co., LLP,
2501 Wayzata Boulevard, Minneapolis, MN 55405, and at all adjournments thereof,
for the purposes set forth in the attached Notice of Annual Meeting of
Shareholders.
Shareholders may revoke proxies before exercise by submitting a
subsequently dated proxy or by voting in person at the Annual Meeting. Unless a
shareholder gives contrary instructions on the proxy card, proxies will be voted
at the meeting to elect as directors the three nominees listed thereon. This
proxy statement and the enclosed proxy are being mailed to the shareholders of
Developed Technology Resource, Inc. on or about March 24, 1997.
The Company will be providing without charge to each stockholder a copy
of the Annual Report on Form 10-KSB for the fiscal year ended October 31, 1996,
including the financial statements and schedules thereto, filed with the
Securities and Exchange Commission, and this proxy in March. If a stockholder
requests copies of any exhibits of such Form 10-KSB, the Company may require the
payment of a fee covering its reasonable expenses. A written request should be
addressed to the Company at the address shown above.
The cost of soliciting proxies, including their preparation, assembly,
and mailing, will be borne by the Company. In addition to the solicitation of
proxies by use of the U.S. Postal Service, certain officers and regular
employees who will receive no extra compensation for their services may solicit
proxies in person or by telephone or facsimile. The Company may reimburse
brokerage firms and others for expenses in forwarding solicitation materials to
the beneficial owners of Common Stock.
OUTSTANDING SHARES AND VOTING RIGHTS
At the close of business on January 31, 1997, there were outstanding
790,820 shares of Common Stock, par value $.01 per share, which is the only
outstanding class of stock of the Company. Each share is entitled to one vote.
As provided in the Articles of Incorporation of the Company, there is no right
of cumulative voting. All matters being voted upon by the shareholders require a
majority vote of the shares represented at the Annual Meeting either in person
or by proxy.
The presence at the Annual Meeting in person or by proxy of the holders
of a majority of the outstanding shares of the Company's Common Stock entitled
to vote constitutes a quorum for the transaction of business. Shares voted as
abstentions on any matter (or a "withhold authority" vote as to directors) will
be counted as present and entitled to vote for purposes of determining a quorum
and for purposes of calculating the vote with respect to such matter, but will
not be deemed to have been voted in favor of such matter. If a broker submits a
proxy that indicates the broker does not have discretionary authority to vote
certain shares on a particular matter, those shares will be counted as present
for purposes of determining a quorum, but will not be considered present and
entitled to vote for purposes of calculating the vote with respect to such
matter.
PRINCIPAL SHAREHOLDERS AND
OWNERSHIP OF MANAGEMENT
The following table contains information as of January 31, 1997,
concerning the beneficial ownership of the Company's Common Stock by persons
known to the Company to beneficially own more than 5% of the Common Stock, by
each director, by each executive officer named in the Summary Compensation
Table, and by all current and nominated directors and executive officers as a
group. Shares reported as beneficially owned include those for which the named
persons may exercise voting power or investment power, and all shares owned by
persons having sole voting and investment power over such shares unless
otherwise noted. The number of shares reported as beneficially owned by each
person as of January 31, 1997, includes the number of shares that such person
has the right to acquire within 60 days of that date, such as through the
exercise of stock options or warrants that are exercisable within that period.
<TABLE>
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OWNED* PERCENTAGE OWNED
------------------------------------ ------------- ----------------
<S> <C> <C>
Vladimir Drits 70,252(2) 8.4%
11901 Meadow Lane West
Minnetonka, MN 55305
Peter L. Hauser 26,001(3)(4)(5) 3.0%
2820 IDS Tower
Minneapolis, MN 55402
Roger W. Schnobrich 19,034(5) 2.3%
222 South Ninth Street
Suite 3300
Minneapolis, MN 55402
John P. Hupp(1) 4,583(6) *
All current directors and officers as a group 49,619(7) 5.7%
(3 people)
</TABLE>
* Less than 1% of total shares outstanding.
- -----------
(1) The named person's address is 12800 Whitewater Drive, Suite 170,
Minnetonka, Minnesota 55343.
(2) Includes 23,333 shares of Commom Stock gifted by Mr. Drits to his
spouse and children, and presntly exercisable options under the the
Company's 1992 Stock Option Plan for the purchase of 833 shares.
(3) Includes presently exercisable warrants for the purchase of 9,167
shares issued in 1992 under terms of a bridge loan agreement.
(4) Includes presently exercisable warrants for the purchase of 13,500
shares issued in 1993 under terms of the Company's initial public
offering.
(5) Includes presently exercisable options for the purchase of 3,334 shares
issued under terms of the 1993 Outside Directors Stock Option Plan.
(6) Includes presently exercisable options for the purchase of 4,583 shares
issued under terms of the Developed Technology Resource, Inc. 1992
Stock Option Plan. 8,333 exercisable option were replaced under a new
employment agreement dated September 30, 1996.
(7) Includes presently exercisable options for the purchase of 11,252
shares and presently exercisable warrants for the purchase of 22,667
shares.
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the number of directors shall be
as fixed from time to time by resolution of the shareholders, subject to
increase by the Board of Directors. The Board is authorized to fill vacancies
resulting from increases in the size of the Board or otherwise. Currently there
are three directors.
The Board of Directors has nominated for election the three persons
named below. Unless authority is withheld, the proxies will be voted FOR these
nominees to serve as directors until the next Annual Meeting of Shareholders and
until their successors are elected and have been qualified. If any one of the
nominees is unable to serve as a director by reason of death, incapacity, or
other unexpected occurrence, the proxies will be voted for such substitute
nominee as is selected by the Board of Directors, but in no event will proxies
be voted for more than three nominees. The Board of Directors is unaware of any
reason why the nominees would not be available for election or, if elected,
would not be able to serve.
DIRECTORS AND NOMINEES
The names of the nominees and certain information about them are set
forth below:
<TABLE>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Peter L. Hauser(1)(2)(3) 55 Vice President and Principal of Equity 1993
Securities Trading Co., Inc.
John P. Hupp 37 President and Secretary of the Company 1996
Roger W. Schnobrich(1)(2) 67 Attorney, Popham, Haik, Schnobrich & Kaufman, 1993
Ltd.
</TABLE>
- -----------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Pursuant to an Underwriting Agreement dated April 23, 1993 between the
Company and Equity Securities Trading Co., Inc. ("Equity Securities"),
in connection with the Company's initial public offering, the Company
granted Equity Securities the right until April 1998 to nominate one
member who is reasonably satisfactory to the Company for election to
the Company's Board of Directors. While maintaining the right to do so
in the future, Equity Securities has not exercised its right to
nominate a member to the board for this election.
Each nominee, if elected, will serve until the 1998 Annual Meeting of
Shareholders and until a successor has been elected and duly qualified or until
the director's earlier resignation or removal.
Mr. Hauser has been a director of the Company since October of 1993.
Since 1977, he has been employed by Equity Securities Trading Co., Inc., a
Minneapolis-based brokerage firm, and is currently a vice president and
principal.
Mr. Hupp has been the Company's President since June, 1995, Secretary
since July 1994, and was Director of Legal Affairs from July, 1993 to June,
1995. From June 1992 until June 1993, Mr. Hupp was President of Magellan
International Ltd., which marketed on-line and hard-copy information for a
Russian information company. From March to June 1992, he served as Of Counsel
for the law firm of Hale & Dorr, establishing the firm's Moscow office. His work
included negotiating and establishing joint ventures for clients. From September
1990 to January 1992, Mr. Hupp was Senior Project Manager and Corporate Counsel
with Management Partnership International, Ltd. (MPI). Prior to his work at MPI,
Mr. Hupp was a trial lawyer for the firms Bollinger & Ruberry and Pretzel &
Stouffer in Chicago for six years. Mr. Hupp received a J.D. Degree from the
University of Illinois College of Law and a B.A. degrees in Russian Area Studies
and Political Science. Mr. Hupp has extensive language training from the
Leningrad State University in St. Petersburg, Russia.
Mr. Schnobrich has been a director of the Company since October of
1993. He is a shareholder and attorney with Popham, Haik, Schnobrich & Kaufman,
Ltd., a Minneapolis-based law firm which he co-founded in 1960 and which serves
as legal counsel to the Company. He also serves as a director of Rochester
Medical Corporation, a company that develops, manufactures and markets improved,
latex free, disposable urological catheters.
Each Executive Officer of the Company is elected or appointed by the
Board of Directors of the Company and holds office until his successor is
elected, or until the earlier of his death, resignation or removal.
The information given in this Proxy Statement concerning the Directors
is based upon statements made or confirmed to the Company by or on behalf of
such Directors, except to the extent that such information appears in its
records.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE FOR ELECTION
TO THE BOARD OF DIRECTORS.
MEETINGS OF THE BOARD AND COMMITTEES
The Board of Directors held four meetings during fiscal 1996 and
adopted certain resolutions by written minutes of action. All of the meetings
were attended by all directors. The Audit Committee is responsible for reviewing
the services rendered by the Company's independent auditors and the accounting
standards and principles followed by the Company. The Audit Committee held one
meeting during fiscal 1996, which was attended by all Committee members. The
Compensation Committee is responsible for making recommendations to the Board of
Directors regarding the salaries and compensation of the Company's executive
officers. The Compensation Committee met several times during fiscal 1996.
CERTAIN TRANSACTIONS
The law firm of Pophaim Haik Schnobrich & Kaufman Ltd., provides legal
services to the Company. Roger Schnobrich, a director of the Company, is a
shareholder in the firm.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's Officers and
Directors, and persons who own more than 10 percent of the registered class of
the Company's equity securities to file reports of ownership on Forms 3, 4, and
5 with the SEC. Officers, Directors and greater than 10 percent shareholders are
required by SEC regulation to furnish the Company with copies of all Forms 3, 4,
and 5 they file.
Based solely on the Company's review of the copies of such forms it has
received and representations from certain reporting persons that they were not
required to file Forms 5 for specified fiscal years, the Company believes that
all of its Executive Officers, Directors and greater than 10 percent beneficial
owners complied with all filing requirements applicable to them with respect to
transactions during fiscal 1996.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the cash and noncash compensation for
fiscal years 1996, 1995, and 1994 awarded to or earned by the Chief Executive
Officer of the Company.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
------------------------------------------ LONG-TERM
FISCAL OTHER ANNUAL COMPENSATION
YEAR SALARY BONUS COMPENSATION AWARDS/OPTIONS
NAME AND PRINCIPAL POSITION ENDED ($) ($) ($) (#)
- --------------------------- --------- --------- ------- ------------- -------------
<S> <C> <C> <C> <C> <C>
John P. Hupp, President and 1996 75,000 none none 250,000(3)
Secretary (1) 1995 65,967 none none 8,333(2)
1994 60,342 none none 1,667
</TABLE>
- -----------
(1) Mr. Hupp became President on June 16, 1995. Beginning June 15, 1993, as
the Company's Director of Legal Affairs, Mr. Hupp began to receive a
full-time salary of $5,000 per month. Effective June 16, 1995, on
assuming the position of President, his salary was increased to $6,250
per month.
(2) Mr. Hupp was issued an option for the purchase of 8,333 shares (adjusted
for stock split) on June 15 under terms of his employment agreement.
These options were replaced under the new employment agreement dated
September 30, 1996.
(3) Under the Amendment dated September 30, 1996 to the 1992 Stock Option
Plan, Mr. Hupp was issued an option to purchase 250,000 shares. This
amendment requires approval by the shareholders.
OPTION GRANTS DURING FISCAL 1996
On September 30, 1996, the 1992 Stock Option Plan was amended
to increase the number of reserved shares of common stock from 200,000 to
600,000 shares. As required by Code Section 422 and the Plan, the foregoing
amendment requires approval by the shareholders.
As a result of this amendment, Mr. John Hupp, President, and
Mr. Erlan Sagadiev, General Director of DTR's Kazakhstan subsidiary, were each
granted an incentive stock option to purchase 250,000 shares of common stock of
the Company, par value one cent per share, at $1.00 per share pursuant to the
terms of their Employment Agreement effective September 30, 1996. An Amendment
to the Stock Option grant was made on December 11, 1996, whereby the option
price was adjusted to $1.22 per share.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
Number of Percent of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($) Date
<S> <C> <C> <C> <C> <C>
John P. Hupp 250,000 50% $1.22 9/29/06
</TABLE>
AGGREGATED OPTION EXERCISES: LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table summarizes for the named executive officer the
number of stock options exercised during the fiscal year ended October 31, 1996,
the aggregate dollar value realized upon exercise, the total number of
unexercised options held at October 31, 1996 and the aggregate dollar value of
in-the-money unexercised options held at October 31, 1996. Value realized upon
exercise is the difference between the fair market value of the underlying stock
on the exercise date and the exercise price of the option. Value of Unexercised
In-the-Money Options at fiscal year-end is the difference between its exercise
price and the fair market value of the underlying stock on October 31, 1996
which was $1 1/2 per share.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND FISCAL YEAR-END OPTION VALUES
----------------------------------------------------------------------------
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT MONEY OPTIONS AT
NAME AND SHARES OCTOBER 31, 1996 (#) OCTOBER 31, 1996 ($)
PRINCIPAL ACQUIRED ON VALUE -------------------- --------------------
POSITION EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John P. Hupp, None None 4,583 250,417(1) None None
President
</TABLE>
(1) Includes 250,000 options granted under September 30, 1996 employment
agreement (see discussion below).
EMPLOYMENT AGREEMENTS
Mr. Hupp's original employment agreement dated June 1, 1995 was amended
on September 30, 1996. The new employment agreement provides for compensation
and standard employee benefits during the employment term, and a lump sum
payment equal to 90 days salary if the Agreement is terminated by the Company
without cause. Under terms of the Agreement, Mr. Hupp will devote his best
efforts to the performance of his duties, and agrees to certain restrictions
related to participation in activities felt to conflict with the best interests
of the Company.
In addition to cash compensation, Mr. Hupp's employment agreement also
provides for an incentive stock option to purchase 250,000 shares of common
stock of the Company, par value one cent per share at the option price of $1.22
per share. 50,000 shares are exercisable per year commencing September 30, 1997.
The agreement also outlines the exercise of options upon termination of
employment and death. The incentive stock options that were awarded as part of
Mr. Hupp's previous employment agreement were cancelled.
A similar employment agreement was made with Erlan Sagadiev. The new
employment agreement provides for compensation and standard employee benefits
during the employment term, and a lump sum payment equal to 90 days salary if
the Agreement is terminated by the Company without cause. Under terms of the
Agreement, Mr. Sagadiev will devote his best efforts to the performance of his
duties, and agrees to certain restrictions related to participation in
activities felt to conflict with the best interests of the Company.
In addition to cash compensation, Mr. Sagadiev's employment agreement
also provides for an incentive stock option to purchase 250,000 shares of common
stock of the Company, par value one cent per share at the option price of $1.22
per share. 50,000 shares are exercisable per year commencing September 30, 1997.
The agreement also outlines the exercise of options upon termination of
employment and death.
COMPENSATION OF DIRECTORS
No director who is also an employee of the Company received any
separate compensation for services as a director.
The non-employee directors of the Company include Messrs. Hauser and
Schnobrich. During fiscal 1996 non-employee directors received no cash
compensation for their services as a director or committee member. Non-employee
directors receive stock options as described below under "1993 Outside Directors
Stock Option Plan." Mr. Schnobrich is an attorney with Popham, Haik, Schnobrich
& Kaufman, Ltd., which serves as counsel for the Company and which receives
payment of legal fees for such services.
Non-employee directors each receive an automatic grant of options to
purchase 1,667 shares of the Company's Common Stock under the Developed
Technology Resource, Inc. 1993 Outside Directors Stock Option Plan (the "1993
Plan"), which was approved by the Company's shareholders at the Annual Meeting
held on March 8, 1994.
The 1993 Plan provides for the grant of stock options under a
predetermined formula only to directors who are not employees of the Company.
Options granted under the 1993 Plan are not intended to and do not qualify as
incentive stock options as described in Section 422 of the Internal Revenue
Code. Options which expire, or are canceled or terminated without having been
exercised, may be regranted to other outside directors under the 1993 Plan. When
an outside director is appointed, elected, or re-elected to the Board, that
person will be granted options for 1,667 shares under the 1993 Plan, effective
on their next anniversary as a director at an exercise price equal to the fair
market value on the date of grant. Options granted under the 1993 Plan first
become exercisable one year and one day after the date of grant. If a person
ceases to be a director, other than by removal for cause, for three months
thereafter that person may exercise only that portion of the outstanding options
that are exercisable at the time when that person ceases to be a director. If an
outside director is removed for cause, all outstanding options granted to that
person under the 1993 Plan immediately lapse.
On April 23, 1996, Messrs. Schnobrich and Hauser were each granted
three-year options for the purchase of 1,667 shares of the Company's Common
Stock at an exercise price of $1.00 per share.
It is the Company's intention to issue to each outside director an
option for 1,667 shares of the Company's Common Stock under terms of the 1993
Outside Director's Stock Option Plan on election to the Board for the Company's
1997 annual meeting.
APPROVAL OF THE AMENDMENT TO THE 1992 STOCK OPTION PLAN
The Developed Technology Resource, Inc. 1992 Stock Option Plan (the
"1992 Plan"), which was approved by the Board of Directors effective August 5,
1992 and by the Company's shareholders on March 15, 1993, provides for the grant
of options to purchase shares of the Company's Common Stock to employees and any
other persons providing services to the Company. The Board of Directors has
determined that outside directors who are eligible to participate under the 1993
Plan are not eligible to receive options under the 1992 Plan. A total of 66,667
shares (after adjustment for split) of Common Stock were reserved for issuance
under the 1992 Plan. Presently, 833 shares (after adjustment for split) have
been acquired on exercise of options, and options for 42,416 shares (after
adjustment for split) are outstanding.
On September 30, 1996, the board amended the plan, subject to
shareholder approval, to increase the number of reserved shares to 600,000 so
that substantial options may be granted to retain the services of and to provide
adequate incentives to key executives following the restructuring of the
Company. Coinciding with this amendment, Messrs. Hupp and Sagadiev were granted
250,000 options each. Options granted under the 1992 Plan may be either
"incentive stock options" (as defined under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code")) or "non-qualified stock options" (options
which do not qualify for special tax treatment). Only employees of the Company
are eligible to receive incentive stock options under the 1992 Plan.
The 1992 Plan as amended September 30, 1996, is administered by the
Board of Directors of the Company, which designates the type of option to be
granted, the number of options to be granted, the number of shares of Common
Stock to be covered by each option (subject to a specified maximum number of
shares of Common Stock which may be purchased under all options granted), the
exercise price, the method of payment, the exercise period (up to ten years) and
certain other terms. The exercise price for an incentive stock option may not be
less than the fair market value, at the time the option is granted, of the stock
subject to the option. The exercise price for an incentive stock option granted
to any individual who owns stock, at the time of grant, possessing more than 10%
of the voting power of the capital stock of the Company may not be less than
110% of such fair market value on the date of grant. No more than $100,000 of
stock vesting during any calendar year will qualify for incentive stock option
treatment. The exercise price for non-qualified options may not be less than 85%
of the fair market value of the Company's Common Stock on the date of grant.
Options granted under the 1992 Plan may be exercisable at such times as are
determined by the Board of Directors or the committee. Options are
nontransferable, other than by will or the laws of descent and distribution, and
may be exercised only by the optionee while employed by the Company or within
three months after termination of employment by resignation or one year
following termination of employment resulting from death or disability. Options
expire no later than ten years from the date of grant, provided that incentive
stock options granted to employees owning stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company expire five
or fewer years from the date of grant.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE PROPOSAL TO
APPROVE THE AMENDMENT TO THE 1992 STOCK OPTION AGREEMENT.
RELATIONSHIP OF CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors selects the independent certified public
accountants for the Company each year. Lurie, Besikof, Lapidus & Co., LLP
audited the Company's consolidated financial statements for the fiscal year
ended October 31, 1996.
Representatives of Lurie, Besikof, Lapidus & Co, LLP will attend the
Annual Meeting, may make a statement if they so desire, and will be available to
respond to appropriate questions. If possible, such questions should be
submitted in writing to the Company at least 10 days prior to the Annual
Meeting, at 12800 Whitewater Drive, Suite 170, Minnetonka, Minnesota 55343,
Attention: Mr. John P. Hupp, President.
On April 23, 1996, Price Waterhouse, LLP ("PW") the independent
accountant who was previously engaged as the principal accountant to audit the
Company's financial statements, declined to stand for re-election. PW's reports
on the financial statements for the past two years do not contain an adverse
opinion or disclaimer of opinion, and are not modified as to uncertainty, audit
scope, or accounting principles. In connection with its audits for the two most
recent fiscal years and through April 23, 1996, there have been no disagreements
with PW on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PW would have caused them to make reference thereto in
their report on the financial statements for such years. The decision to change
accountants has been approved by the Board of Directors of the Company.
On April 23, 1996 Lurie, Besikof, Lapidus & Co., LLP was appointed as
the Company's new independent accountant to audit the Company's financial
statements. During the two most recent fiscal years and through April 23, 1996,
the Company has not, prior to engaging the new accountant, consulted the new
accountant regarding the application of accounting principles to a specific
completed or contemplated transaction, or regarding the type of audit opinion
that might be rendered on the Company's financial statements
OTHER BUSINESS
Management knows of no other matters that will be presented for
consideration at the meeting. If any other matter properly comes before the
meeting, proxies will be voted in accordance with the best judgment of the
person or persons acting under them.
PROPOSALS FOR 1998 ANNUAL MEETING
Shareholders who intend to submit proposals for inclusion in the
Company's 1998 Proxy Statement and Proxy for shareholder action at the 1998
Annual Meeting must do so by sending the proposal and supporting statements, if
any, to the Company at its corporate offices no later than December 24, 1997.
By Order of the Board of Directors
John P. Hupp
PRESIDENT AND SECRETARY
March 17, 1997
DEVELOPED TECHNOLOGY RESOURCE, INC.
ANNUAL MEETING OF SHAREHOLDERS - APRIL 24, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John P. Hupp or his appointee
as proxy of the undersigned, with full power of substitution, for and in the
name of the undersigned, to represent the undersigned at the Annual Meeting of
Shareholders of Developed Technology Resource, Inc., to be held at 2501 Wayzata
Boulevard, Minneapolis, Minnesota 55405 at 4:00 p.m. on Thursday, April 24,
1997, and at any adjournments thereof, and to vote all shares of stock of said
Company standing in the name of the undersigned, as designated below, with all
the powers which the undersigned would possess if personally at such meetings.
1. Election of Directors duly nominated: Peter L. Hauser, John P. Hupp,
and Roger W. Schnobrich.
_______ FOR _______ WITHHELD FOR ALL _______ WITHHELD FOR THE
FOLLOWING ONLY
(Write the nominee's name in space below):
- --------------------------------------------------------------------------------
2. Approval of the Amendment to the 1992 Stock Option Plan.
_______ FOR _______ AGAINST
- --------------------------------------------------------------------------------
3. The authority to vote, in their discretion, on all other business that
may properly come before the meeting.
_______ GRANTED _______ WITHHELD
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE GIVEN FOR
VOTING ON THE MATTERS ABOVE, THIS PROXY WILL BE VOTED FOR item 1, electing all
duly nominated Directors as listed, voted FOR item 2, approving the amendment,
and GRANTED for item 3, granting the Directors authority to vote in their
discretion on all other business coming before the meeting. Shareholders who are
present at the meeting may withdraw their Proxy and vote in person if they so
desire. The undersigned has received the proxy statement dated February 26,
1997.
Dated _____________, 1997 ___________________________ ______________________
Signature Print Name
Dated _____________, 1997 ___________________________ ______________________
Signature Print Name
Please sign exactly as name(s) appear(s) on this Proxy. If shares are
registered in more than one name, the signatures of all persons are required. A
corporation should sign in its full corporate name by a duly authorized officer,
stating their title. Trustees, guardians, executors and administrators should
sign in their official capacity, giving their full title as such. If a
partnership, please sign in partnership name by authorized person.
Please check as appropriate:
_ I DO plan on attending the Annual Meeting of Shareholders.
_ I DO NOT plan on attending the Annual Meeting of Shareholders.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY
NO POSTAGE IS REQUIRED IF RETURNED IN THE ENCLOSED ENVELOPE.
THIS PROXY MAY ALSO BE RETURNED VIA FACSIMILE TO 612/938-2319.
