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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities and 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 240.14a-11(c) or 240.14a-12
DYNACQ INTERNATIONAL, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee is required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
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[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No:
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(3) Filing Party:
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(4) Date Filed:
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DYNACQ INTERNATIONAL, INC.
10304 INTERSTATE 10 EAST, SUITE 369
HOUSTON, TEXAS 77029
Notice of Annual Meeting of Shareholders
Dear Shareholder:
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of Dynacq International, Inc., a Nevada corporation (the "Company")
will be held in the conference room of the Company's Professional Building
located at 4301-A Vista, Pasadena, Texas 77504, on August 26, 1999, at 10:00
a.m., Houston time, for the following purposes:
(1) The election of four (4) Directors to serve until the Year 2000 Annual
Meeting of Shareholders or until their respective successors are duly
elected and qualified;
(2) To ratify the appointment of Wood Harper & Associates, P.C. as the
Company's independent auditors to examine the accounts of the Company
for the calendar year ending August 31, 1999; and
(3) to consider and act upon such other business as may properly come
before the Meeting or any adjournments or postponements thereof.
The Board of Directors fixed July 27, 1999, as the record date (the "Record
Date") for the determination of stockholders entitled to notice of and to vote
at the Meeting and any adjournments or postponements thereof. Holders of
record of the Company's common stock, par value $.001 per share (the "Common
Stock") at the close of business on the Record Date are entitled to vote on all
matters coming before the Meeting or any adjournments or postponements thereof.
A complete list of stockholders entitled to vote at the Meeting will be
maintained in the Company's offices at 10304 Interstate 10 East, Suite 369,
Houston, Texas 77029 for ten days prior to the Meeting and may be inspected
during normal business hours.
The Annual Report to shareholders on Form 10-KSB for the calendar year
ended August 31, 1998 (the"Annual Report") in which financial statements of the
Company are included, was mailed prior to this Proxy Statement. Other than as
specifically incorporated by reference herein, the Annual Report does not form
any part of the material for solicitation of proxies.
Your vote is important. The voting stock of the Company should be
represented as fully as possible at the Meeting. The enclosed proxy is
solicited by the Board of Directors of the Company. Whether or not you plan to
attend the Meeting in person, please mark, execute, date and return the enclosed
proxy in the envelope provided, which requires no postage if mailed within the
United States. The return of the enclosed proxy will not affect your right to
vote in person if you do attend the Meeting.
By Order of the Board of Directors
/s/ PHILIP CHAN
------------------------------------------------
Houston, Texas Philip Chan, Vice President & CFO
July 30, 1999
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING, YOU ARE URGED TO SIGN,
DATE AND MAIL THE ENCLOSED PROXY CARD PROMPTLY. IF YOU ATTEND THE MEETING, YOU
CAN VOTE EITHER IN PERSON OR BY YOUR PROXY.
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DYNACQ INTERNATIONAL, INC.
10304 INTERSTATE 10 EAST, SUITE 369
HOUSTON, TEXAS 77029
PROXY STATEMENT
This Proxy Statement and the enclosed proxy card are furnished in
connection with the solicitation of proxies by the Board of Directors of the
Company for use at the Company's Annual Meeting of Shareholders to be held
August 26, 1999, at 10:00 a.m., Houston time in the conference room of the
Company's Professional Building located at 4301-A Vista, Pasadena, Texas 77504,
and at any adjournments or postponements thereof (the "Meeting") for the
purposes set forth in the accompanying notice. This Proxy Statement, the
foregoing notice and the enclosed proxy are being mailed to shareholders on or
about July 30, 1999, to the Company's Shareholders of record as of July 27, 1999
(the "Record Date").
The Board of Directors does not intend to bring any matter before the
Meeting except as specifically indicated in the notice and does not know of
anyone else who intends to do so. If any other matters properly come before the
Meeting, however, the persons named in the enclosed proxy, or their duly
appointed substitutes acting at the Meeting, will be authorized to vote or
otherwise act thereon in accordance with their judgment on such matters. If the
enclosed proxy is properly executed and returned prior to voting at the Meeting,
the shares represented thereby will be voted in accordance with the instructions
marked thereon and otherwise in accordance with the judgment of the persons
designated as proxies. In the absence of instructions, the shares will be
voted "FOR" all four nominees to the Board of Directors and "FOR" the
ratification of Wood Harper & Associates, P.C. as the Company's independent
auditors.
Any proxy may be revoked at any time prior to its exercise by notifying the
Secretary of the Company in writing, by delivering a duly executed proxy
bearing a later date or by attending the Meeting and voting in person.
VOTING SECURITIES AND SECURITY OWNERSHIP
VOTING SECURITIES
At the close of business on July 27, 1999, the Record Date fixed for the
determination of shareholders entitled to notice of and to vote at the
Meeting, there were 3,289,045 shares of the Company's Common Stock outstanding
each of which will be entitled to one vote per share on all proper business
brought before the Meeting. The presence at the Meeting, in person or by
proxy, of the holders of 40% of the Company's outstanding shares of Common Stock
will constitute a quorum. All matters brought before the Meeting at which a
quorum is present will be decided by a majority of the shares represented
in person or by proxy, except that with respect to the election of directors,
the four nominees who receive the greatest number of votes cast for election
1
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will be the duly elected Directors of the Company. Shareholders do not have
cumulative voting rights in the election of directors. In determining whether
a quorum is present, executed proxies representing shares that are voted
"Withhold" or "Abstain" and shares for which a broker indicates that it does not
have discretionary authority will be treated as present and entitled to vote for
purposes of determining a quorum, however, such shares will not be treated as
votes in favor of any matter submitted. If a quorum is not present or
represented by proxy, the shareholders entitled to vote at the Meeting, present
in person or represented by proxy, have the power to adjourn the Meeting from
time to time, without notice other than an announcement at the Meeting, until a
quorum is present or represented. At any such adjourned Meeting at which a
quorum is present or represented, any business may be transacted at the Meeting
as originally called.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of July 27,
1999, regarding the ownership of the Company's Common Stock by (i) each person
known to the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock of the Company, (ii) each director, (iii)
the Company's executive officers, and (iv) all directors and executive officers
of the Company, as a group. The business address of each officer and director
listed below is: c/o Dynacq International, Inc., 10304 Interstate 10 East, Suite
369, Houston, Texas 77029.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES AND
TITLE OF CLASS OF BENEFICIAL OWNER NATURE OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ----------------- ----------------------- ------------------------------ -----------------
<S> <C> <C> <C>
Common Stock Chiu Moon Chan 2,271,219 /1/ 69.05%
Common Stock Ella Chan 2,271,219 /1/ 69.05%
Common Stock Philip Chan 95,277 /2/ 2.90%
Common Stock Stephen L. Huber 0 0.00%
Common Stock Earl R. Votan 0 0.00%
Common Stock Glenn Rodriguez 60,062 /3/ 1.89%
Common Stock Officers and Directors 2,426,558 74.00%
as a group (6)
</TABLE>
/1/ Includes (i) 1,695,547 shares held individually by Chiu Moon Chan, (ii)
474,281 shares held in the name of Mr. Chan's spouse, and (iii) 101,938 shares
held by two of Mr. Chan's minor children. Mr. Chan disclaims any beneficial
ownership of the shares held by his spouse and minor children. Mrs. Chan
disclaims any beneficial ownership of the shares held by her spouse and minor
children.
/2/Includes (i) 39,402 shares which may be acquired by Mr. Philip Chan pursuant
to options granted to him in May 1996 exercisable at $3.75 and expiring May 14,
2001, (ii) 20,000 shares which may be acquired by Mr. Chan pursuant to options
granted to him on December 18, 1997, which are exercisable at $1.375 and expire
on December 18, 2002, and (iii) 24,000 shares which may be acquired by Mr. Chan
pursuant to options granted to him on January 4, 1999, which are exercisable at
$2.375 per share on January 4, 2000 and thereafter, and which expire on January
3, 2004.
/3/Includes options to purchase 22,500 shares which are exercisable at $1.375
and expire on December 18, 2002, which were granted on December 18, 1997, and
30,000 shares which may be acquired by Mr. Rodriguez pursuant to options granted
to him on January 4, 1999, which are exerciseable at $2.375 on January 4, 2000
and thereafter, and which expire on January 3, 2004.
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ELECTION OF DIRECTORS
NOMINEES
At the Meeting, the shareholders will elect four directors to hold
office until the Year 2000 Annual Meeting of Shareholders or until their
respective successors are duly elected and qualified. Unless contrary
instructions are given, the shares represented by the enclosed proxy will be
voted "FOR" the election of the Board of Directors' nominees listed below.
The Board of Directors believe that all nominees are willing to serve as
directors. If a nominee at the time of his election is unable or unwilling to
serve or is otherwise unavailable for election, and as a result another nominee
is designated by the Board of Directors, the persons named in the enclosed
proxy or their substitute(s) will vote for any nominee designated by the Board
of Directors to fill the vacancy. If a quorum is present and voting, the four
nominees receiving the highest number of votes will be elected to the board of
Directors. Shares for which voting authority is withheld and broker nonvotes
are not counted for electing directors and are the equivalent of a "no" vote.
The nominees for election as directors, together with certain information about
them, are as follows:
NAME AGE POSITION
Chiu Moon Chan 46 Chairman of the Board of Directors, Chief Executive
Officer, President and Secretary (July 1992-Present)
Philip Chan 47 Vice President - Finance, CFO and Treasurer/Director
(July 1992-Present)
Stephen L. Huber 48 Director (July 1992-Present)
Earl R. Votaw 72 Director (July 1992-Present)
CHIU MOON CHAN has served as a director and as the Company's President,
Secretary and Chief Executive Officer since July 1992. Mr. Chan is a registered
pharmacist and since May 1978, was employed by various health care service
organizations in Houston, Texas prior to his affiliation with the Company. Mr.
Chan earned a Bachelor of Science degree in Pharmacy from the University of
Houston.
PHILIP CHAN has served as a director and as the Company's Vice President --
Finance, CFO and Treasurer since July 1992. Mr. Chan earned advanced accounting
degrees from the University of Houston and is a CPA in the State of Texas. Mr.
Chan has previous corporate and outside accounting experience. He is not
related to Chiu Moon Chan.
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STEPHEN L. HUBER is a registered pharmacist and earned a Bachelor of
Science degree in Pharmacy from the University of Houston. Since December 1991,
Mr. Huber served as the Deputy Division Head for patient care services at the
University of Texas M.D. Anderson Cancer Center. Mr. Huber joined M.D. Anderson
in 1984 as Assistant Director of Operations. Mr. Huber joined Cortex
Communications, Inc., a medical education company, as President and Chief
Operating Officer. Mr. Huber remains as a research consultant at M.D. Anderson.
EARL R. VOTAW retired in December 1993. He earned a Bachelor of Arts
degree from the University of the Americas in Mexico City and a certificate of
graduation from the Graduate School of Mortgage Banking from Northwestern
University of Chicago. Prior to his retirement, Mr. Votaw served as a director
and as the President and Chief Executive Officer of Capital Bank, a Texas
chartered bank located in Houston, Texas.
SIGNIFICANT EMPLOYEES
GLENN RODRIGUEZ, age 52, earned a B.B.A. in Accounting from Florida
International University in Miami, Florida, graduating in 1976. Mr. Rodriguez
has served as the CEO of Vista Healthcare, Inc., a majority-owned subsidiary of
the Company since March 1997, and prior to that served as the Chairman and CEO
of Surgical Care Center of Texas, an outpatient surgical facility in Pasadena,
Texas.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, the Company's directors, executive officers, and shareholders who
beneficially own more than 10% of the Company's Common Stock, are required to
file reports of stock ownership and changes with the Securities and Exchange
Commission and to furnish the Company with copies of all stock reports they
file. Based solely upon the Company's review of Forms 3, 4, and 5 filed by the
Company's officers and directors and persons who beneficially own 10% or more of
the Company's Common Stock and the written representations of such persons, the
Company is not aware that any of such persons failed to timely file the
foregoing forms during the last fiscal year, except for the failure by Mr.
Philip Chan to timely file a Form 5 to report options to acquire 20,000 shares
under the Company's 1995 Incentive Stock Option Plan granted to him on December
18, 1997. As of the date of this Proxy Statement, Mr. Philip Chan has filed all
required reports.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met or took action by written consent one (1)
time during fiscal year 1998. Each of the directors attended or acted upon at
least seventy-five percent of the aggregate number of Board of Director
meetings, consents, and Board of Director committee meetings or consents, as
applicable, held or acted upon during fiscal year 1998.
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COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has two committees, an Audit Committee and a
Compensation Committee, each comprised of two independent directors, Stephen L.
Huber and Earl R. Votaw. The Audit Committee recommends the annual appointment
of the Company's auditors, and is charged with reviewing the scope of audit and
non-audit assignments and related fees, accounting principals used by the
Company in financial reporting, internal auditing procedures and the adequacy of
the Company's internal control procedures. The Compensation Committee
administers the Company's Stock Option Plans and makes recommendations to the
Board of Directors regarding compensation for the Company's executive officers.
Each committee met or took action by written consent one (1) time during fiscal
year 1998. The Company does not have a nominating committee to select nominees
for election to the Company's Board of Directors. Nominees are chosen by the
entire Board of Directors.
COMPENSATION OF DIRECTORS
The Company has four individuals who serve as directors, two of which are
independent. Messrs. Chiu Chan and Philip Chan receive compensation with respect
to their services and in their capacities as executive officers of the Company
and no additional compensation is paid for their services to the Company as
directors. The remaining directors are not employees of the Company and receive
no compensation for their services as directors. However, Mr. Huber receives a
consulting fee from the Company of $1,000 per month. See "Certain
Transactions." In addition, pursuant to the Company's 1995 Non-Qualified Stock
Option Plan for Consultants and Non-Employee Directors each independent
director is eligible to receive options to purchase shares of the Company's
Common Stock at an exercise price which is not less than the market price for
the Company's Common Stock on the date of grant. The Board of Directors of the
Company is authorized by the foregoing plan to determine the date of grant, the
number of shares subject to, and the exercise price of, any options granted
pursuant thereto. No options were granted to the independent directors in the
last fiscal year.
EXECUTIVE COMPENSATION
The following table contains information with respect to all cash
compensation paid or accrued by the Company during the past three fiscal years
to the Chief Executive Officer of the Company. No other officer
individually received annual cash compensation exceeding $100,000 during
the past three fiscal years.
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SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
Fiscal Long-Term
Name/Principal Position Year Salary Bonus Other Compensation
- ----------------------- ------ -------- ----- ------ ------------
Chiu Chan, CEO 1998 $ 80,000 $-0- $ -0- $-0-
" " 1997 100,000 -0- -0- -0-
" " 1996 160,000 -0- 6,010 -0-
Pursuant to the Company's 1995 Incentive Stock Option Plan, options to
purchase 68,882 shares were granted on May 14, 1996, which number includes
39,402 options granted to Mr. Philip Chan. The remaining options were granted
to approximately ten (10) nonexecutive employees of the Company and its
subsidiaries. These options are exercisable at $3.75 per share and expire May
14, 2001. The Board of Directors has also adopted a 1995 Non-Qualified Stock
Option Plan for Consultants and Non-Employee Directors, and a total of 43,750
options were granted to two consultants during fiscal 1996 under that plan. In
December 1997, the Company granted ten (10) employees options to purchase
106,250 shares in the aggregate at an exercise price of $1.38 per share which
expire December 18, 2002, including options for 20,000 shares issued to Philip
Chan and 22,500 to Glenn Rodriguez. No options were issued to or exercised by a
named executive officer in fiscal 1998. In addition, on January 4, 1999, the
Company granted six (6) persons the option to purchase an aggregate of 88,000
shares at an exercise price of $2.375 per share, including options to purchase
24,000 and 30,000 shares granted to Messrs. Philip Chan and Glenn Rodriguez
respectively. The options are exercisable one (1) year from the date of grant
and expire on January 4, 2004.
CERTAIN TRANSACTIONS
Mr. Huber, a director of the Company, receives a consulting fee from the
Company of $1,000.00 per month in exchange for consultation services regarding
patient care for the Company's in-home infusion therapy and other matters. Mr.
Huber received $12,000 in fiscal 1999.
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INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of Wood Harper &
Associates, P.C. as independent auditors of the Company for its fiscal year
ending August 31, 1999, and is submitting such selection to the Company's
shareholders for their ratification. The Board of Directors recommends that
such appointment be approved by the shareholders. Wood Harper & Associates,
P.C. has served as the Company's independent auditors for the last two fiscal
years. The affirmative vote of a majority of the shares of Common Stock
present or represented at the Meeting is necessary to ratify the appointment
of Wood Harper & Associates, P.C. A representative of Wood Harper & Associates,
P.C. is expected to be present at the Meeting. If the foregoing appointment is
not ratified, the Board of Directors will consider the appointment of other
accountants in fiscal 1999 and thereafter but shall not be required to change
accountants. If Wood Harper & Associates, P.C. declines to act or otherwise
becomes incapable of performing, or if its appointment is otherwise
discontinued, the Board of Directors will appoint other independent accountants
whose appointment for any period subsequent to fiscal year 1999 will again be
subject to shareholder ratification.
SHAREHOLDER PROPOSALS AND OTHER MATTERS
Management of the Company is not aware of any matters other than those
set forth in this Proxy Statement which will be presented for action at the
Meeting. If any other matters should properly come before the Meeting, the
persons authorized under the proxies solicited by the Board of Directors of the
Company shall vote and act with respect thereto according to their best
judgment.
Proposals of shareholders intended to be presented at the Annual Meeting of
Shareholders in the Year 2000 must be submitted to the Company by December 31,
1999, in order to be considered for inclusion in the Company's proxy statement
and form of proxy relating to that meeting.
The Company will bear the cost of the solicitation of the Board of
Directors' proxies for the Meeting, including the cost of preparing,
assembling and mailing proxy materials, the handling and tabulation of proxies
received and charges of brokerage houses and other institutions, nominees
and fiduciaries in forwarding such materials to beneficial owners. In
addition to the mailing of the proxy material, such solicitation may be
made in person or by telephone or facsimile by directors, officers and regular
employees of the Company, and no additional compensation will be paid to such
individuals.
Upon the written request of any beneficial owner of the Company's Common
Stock, the Company will provide a copy of the exhibits to its Annual Report on
Form 10-KSB upon the receipt of a reasonable fee for its expenses incurred in
furnishing such exhibits. The Company will also make available to its
shareholders following any written request thereafter, without charge, copies of
its quarterly reports or Form 10-QSB following the Company's filing thereof with
the Securities and Exchange Commission.
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REVOCABLE PROXY
DYNACQ INTERNATIONAL, INC.
10304 INTERSTATE 10 EAST, SUITE 369
HOUSTON, TEXAS 77029
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Chiu Moon Chan and Philip S. Chan, or
either of them, with full power of substitution, attorneys and proxies of the
undersigned, with all the powers that the undersigned would possess if
personally present to cast all votes that the undersigned would be entitled
to vote at the Annual Meeting of Stockholders of Dynacq International, Inc. (the
"Company") to be held on August 26, 1999, in the conference room of the
Company's Professional Building located at 4301-A Vista, Pasadena, Texas 77504,
at 10:00 a.m., Houston time, and any and all adjournments or postponements
thereof, and directs them to vote as follows:
(1) The election of four (4) Directors to serve until the year 2000 Annual
Meeting or until their respective successors are duly elected and
qualified;
[_] FOR the nominees listed below [_] WITHHOLD AUTHORITY
(except as indicated to the contrary below) to vote for all nominees
Nominees:
Chiu Chan, Philip S. Chan, Stephen L. Huber and Earl R. Votaw
INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name on the following line:
-------------------------------------
(2) Ratification of the appointment of Wood Harper & Associates, P.C. as
independent auditors of the Company for its fiscal year ending August 31,
1999.
[_] FOR [_] AGAINST [_] ABSTAIN
(3) With discretionary authority on any other matter which may properly come
before the meeting.
You are encouraged to specify your choices by making the appropriate boxes
above but you need not mark any boxes if you wish to vote in accordance with the
Board of Directors' recommendations. This Proxy will be voted as specified. If
no specification is made this Proxy will be voted FOR the proposal. Your shares
cannot be voted unless you sign and return this card.
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS AS A SHAREHOLDER OF THE COMPANY.
WHEN SIGNING AS EXECUTOR, ADMINISTRATOR, ATTORNEY, OFFICER, PARTNER, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. WHEN SHARES ARE HELD BY JOINT TENANTS
BOTH SHOULD SIGN.
DATED: , 1999
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(Print Full Name of Shareholder) (Signature of Shareholder)
- ------------------------------------
(Insert title of above signatory if
shareholder is not an individual)
No postage is required if returned in the enclosed envelope and mailed in the
United States. Shareholders who are present at the meeting may withdraw their
Proxy and vote in person if they so desire.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
