DEF 14A 1 proxy01d.txt 2001 PROXY STATEMENT UNITED STATES SECURITIES EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 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 Commission only (as permitted by Rule 14a-6(e)(2) UNITED SYSTEMS TECHNOLOGY, INC. (Name of Registrant as Specified in Its Charter) (Name of Person(s) filing Proxy Statement) Payment of filing fee (Check the appropriate box): [X] No fee required [ ] Fee computed in table below per Exchange Act Rules 14a-6 (i) (4) and 0-11 (1) Title of each class of securities to which transaction applies. (2) Aggregate number of securities to which transaction applies. (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined). (4) Proposed maximum aggregate value of transaction. (5) Total fee paid. [ ] 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. UNITED SYSTEMS TECHNOLOGY, INC. ------------------------------------------------------------------------ NOTICE OF ANNUAL MEETING OF SHAREHOLDERS JUNE 27, 2001 ------------------------------------------------------------------------ The Annual Meeting of Shareholders of United Systems Technology, Inc., an Iowa corporation, will be held at 9:00 a.m., Central Time, Wednesday June 27, 2001 at the Company's executive offices, 1850 Crown Road, Suite #1109, Dallas, Texas, 75234, for the following purposes: 1. To elect four members of the Board of Directors of the Company; 2. To ratify or reject the selection of Grant Thornton LLP as the independent accountants for the Company; 3. To consider and act upon such other business as may properly come before the meeting or any adjournment thereof. All shareholders are cordially invited to attend the meeting, although only shareholders of record at the close of business on May 21, 2001 will be entitled to vote. A Proxy Statement explaining the matters to be acted upon at the meeting follows. Please read it carefully. Also enclosed is a copy of the Company's Annual Report for the fiscal year ended December 31, 2000. Randall L. McGee, Secretary May 29, 2001 1850 Crown Road, #1109 Dallas, Texas 75234 YOUR VOTE IS IMPORTANT Shareholders are urged to designate their choices as to the matters to be acted upon, and to date, sign, and return the enclosed proxy card in the envelope provided, which requires no postage if mailed in the United States. Your prompt return of the Proxy will help to assure a quorum at the meeting and to avoid additional Company expense for further solicitation. UNITED SYSTEMS TECHNOLOGY, INC. ANNUAL MEETING OF SHAREHOLDERS - JUNE 27, 2001 ------------------------------------------------------------------------ PROXY STATEMENT ------------------------------------------------------------------------ GENERAL INFORMATION This Proxy Statement is furnished in connection with the solicitation of Proxies on behalf of the Board of Directors of United Systems Technology, Inc., an Iowa corporation, for use at the Company's Annual Meeting of Shareholders, to be held on Wednesday, June 27, 2001, and at any and all adjournments of such meeting. This Proxy Statement and Proxy are being mailed on or about May 29, 2001 to shareholders of record of the Company on May 21, 2001. If the enclosed Proxy Card is properly executed and returned in time to be voted at the meeting, the shares represented will be voted in accordance with the instructions contained therein. Executed Proxies that contain no instructions will be voted (1) for the nominees for director indicated herein; and (2) in favor of ratification of the selection of Grant Thornton LLP as independent accountants for the Company. In their discretion, the proxies are also authorized to vote upon such other business as may properly come before the meeting or any and all adjournments thereof. A shareholder who executes a Proxy for the Annual Meeting may revoke it any time before it is voted. A Proxy may be revoked by delivering written notice of revocation to the Company, by delivering a duly executed Proxy bearing a later date, or by attending the meeting and voting in person. The Company's executive offices are located at 1850 Crown Road, Suite 1109, Dallas, Texas 75234. VOTING RIGHTS AND VOTE REQUIRED Only shareholders of record at the close of business on May 21, 2001 will be entitled to vote at the Annual Meeting. As of May 21, 2001, 56,178,663 shares of Common Stock, par value $.10 per share; 500,000 shares of Series B Preferred Stock, par value $.10 per share and 300,000 shares of Series E Preferred Stock, par value $.10 per share were issued and outstanding. Each Common Shareholder is entitled to one vote per share on each matter to be voted upon at the meeting. Series B Preferred Shareholders are entitled to a total of 4,711,405 votes on each matter to be voted upon at the meeting. Series E Preferred Shareholders are entitled to a total of 2,544,130 votes on each matter to be voted upon at the meeting. A quorum for the Annual Meeting will exist if a majority of the shares entitled to vote are present in person or by Proxy. If a quorum is present, election of directors for the ensuing year and the ratification of Management's selection of independent accountants will require an affirmative vote by a majority of the votes to which shareholders voting at the meeting are entitled to vote with respect to each such matter. Meeting costs, including the costs of preparing and mailing the Proxy Statement and Proxy, will be borne by the Company. The Company may, in addition, use the services of its directors, officers and employees to solicit Proxies, personally or by telephone, but at no additional salary or compensation. The Company will also request banks, brokers, and others who hold shares of the Company in nominee names to distribute annual reports and Proxy soliciting materials to beneficial owners, and will reimburse such banks and brokers for reasonable out-of-pocket expenses which they may incur in so doing. Election of Directors The Company's Board of Directors has nominated the four persons listed below for election as directors for the ensuing year. Directors will hold office until the Annual Meeting of Shareholders held in 2002, and until their successors are duly elected and qualified, or until their death, resignation or removal. The nominees are presently directors or officers of the Company and have served in that capacity since originally elected. A shareholder using the enclosed Proxy Card can vote for all or any of the nominees or such shareholder may withhold his vote from all or any of such nominees. If the Proxy Card is properly executed but unmarked, it will be voted for all of the nominees. Each of the nominees has agreed to serve as a director if elected; however, should any nominee become unable or unwilling to accept nomination or election, the persons 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. There are no family relationships among these nominees. Name Age Position ---- --- -------- Thomas E. Gibbs 52 Chairman of the Board, Chief Executive Officer, President and Director Randall L. McGee 44 Secretary, Treasurer, Vice-President - Finance, and Director Earl H. Cohen 53 Director Scott Burri 38 Director
Thomas E. Gibbs, Chairman of the Board, Chief Executive Officer, President and Director. Mr. Gibbs founded Mentor Systems, Inc. in 1981, served as its President until 1987 when the company was sold to Philadelphia Suburban Corporation, and continued as President until 1988. From 1988 to 1989, Mr. Gibbs served as Chairman of PSC Information Services, Inc., the information technology subsidiary of Philadelphia Suburban Corporation and President of Digital Systems, Inc., a PSC Information Services subsidiary. From 1989 to 1990, Mr. Gibbs was Senior Vice President for Information Technology at Philadelphia Suburban Corporation. In 1990, Mr. Gibbs became President of PSC Information Services, Inc. and served in that capacity until 1991 when two of the five PSC Information Services companies were acquired by Systems and Computer Technology Corp. ("SCT"). After the acquisition, Mr. Gibbs became President of Mentor Information Systems, Inc., one of the two companies acquired by SCT, until 1993. In addition, from 1992 until 1993 he served as President of Moore Governmental Systems, Inc., another SCT subsidiary. Mr. Gibbs was elected to his current position of Chairman of the Board, Chief Executive Officer and President of the Company effective January 1, 1994. Mr. Gibbs received a Bachelor of Science degree, Masters of Business Administration and a Ph.D. degree from the University of Cincinnati. Randall L. McGee, Secretary/Treasurer, Vice President - Finance and Director. Mr. McGee was appointed Secretary, Treasurer and Controller of the company in October 1988. Mr. McGee is a certified public accountant and, from 1982 until he joined the Company, served as Controller of National FSI, Inc., a provider of computer software and ancillary services for the management of pension and other employee benefit plans. Mr. McGee received a Bachelor of Arts Degree in Accounting from the University of Northern Iowa in 1979. Earl H Cohen, Director. Mr. Cohen is an attorney and has served as Chief Executive Officer of the law firm of Mansfield, Tanick & Cohen, P.A. since 1992. Prior to joining the law firm of Mansfield & Tanick in 1990, Mr. Cohen was an attorney in private practice from 1976 through 1990. From 1973 through 1976, Mr. Cohen served as Trust Officer of Norwest Bank Minneapolis. Mr. Cohen received his Bachelor of Science degree in Business from the University of Minnesota in 1970 and his law degree from the University of Minnesota in 1973. Mr. Cohen has previously served on the boards of private companies. Scott A Burri, Director. Mr. Burri has been the Managing Partner of Huntington Ventures, a California based venture capital firm, which began operations in July 2000. From 1992 until May 2000, Mr. Burri was employed by Ventana Global, LTD, a California-based asset management firm where he was responsible for the management, analysis and oversight of a number of portfolio companies. Prior to 1992, Mr. Burri was employed as an investment banker at First Boston Corporation in New York, New York and Credit Suisse in Zurich, Switzerland. Mr. Burri has previously served on the Boards of public and private companies. Mr. Burri received a Bachelor of Science degree from Oregon State University and Master of Business degree from the University of Southern California. The Board of Directors has established a Compensation/Stock Option Committee and an Audit Committee. The Board of Directors originally established the Compensation/Stock Option Committee in January, 1987 to administer the Company's Stock Option Plan. In June 1988 the duties of the Committee were expanded to include the review of management compensation. The Committee held two meetings during the year ended December 31, 2000 and was comprised of Scott Burri and Earl Cohen. The Board of Directors established the Audit Committee in June 1988 to monitor preparation of the Company's financial statements. The Committee held no meetings during the year ended December 31, 2000 and was comprised of Scott Burri and Earl Cohen. The Company has no other committees of the Board of Directors. Committee appointments for the upcoming year will be made at the annual meeting of the Board of Directors. The Board of Directors held five meetings during the year ended December 31, 2000. All Directors attended 75% or more of all meetings of the Board and of the committees on which they served. AUDIT COMMITTEE REPORT The audit committee of the board of directors oversees the external audit of the Company's financial statements and reviews the internal control and financial reporting procedures of the Company. For the year ended December 31, 2000, the audit committee was composed of Scott Burri and Earl Cohen. The audit committee has reviewed and discussed the December 31, 2000 financial statements with management of the Company. The entire Board of Directors recommended the audited financial statements for the year ended December 31, 2000 be included in the Company's Annual Report on Form 10-K. The audit committee has not discussed with the independent auditors the matters required to be discussed by SAS 61. The audit committee has received the written disclosures and the letter from its independent accountants required by Independence Standards Board Standard No. 1. Such letter did not disclose any matter or relationship that impaired their independence. Audit Fees The following table summarizes the fees paid or payable to Grant Thornton LLP for services rendered for the fiscal year ended December 31, 2000. Audit fees in connection with the Annual Report on Form 10-KSB and quarterly reports $21,500 Financial systems design and implementation fees - All other fees 3,550 ------- Total $25,050 ------
Executive Officers The Executive officers of the Company are appointed annually by the Board of Directors and serve an indefinite term. All executive officers of the Company are employed on a full-time basis. No family relationship exists between any executive officer of the Company. Name Age Position ---- --- -------- Thomas E. Gibbs 52 Chairman of the Board, Chief Executive Officer, President and Director Randall L. McGee 44 Secretary, Treasurer, Vice-President - Finance, and Director
Thomas E. Gibbs, Chairman of the Board, Chief Executive Officer, President and Director. See Resume on Page 3 of this Proxy Statement. Randall L. McGee, Secretary/Treasurer, Vice President - Finance and Director. See Resume on Page 3 of this Proxy Statement. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth the ownership of each person who is known to the Company to be the beneficial owner of more than 5% of the Company's Common Stock as of May 21, 2001. Name and Address Amount and Nature Percent of Beneficial Owner of Beneficial Ownership of Class ------------------- ----------------------- -------- D&D Holdings, Inc. 9,646,570 (1) 15.2% 1915 Grand Avenue Des Moines, IA 50309 Thomas E. Gibbs 7,135,000 (2) 12.5% 230 South MacArthur Blvd. #120 Coppell, TX 75019 Randall L. McGee 4,100,000 (3) 7.0% 1600 Lake Crest Plano, TX 75023
------------------------------------------------------------------------ (1) D&D Holding, Inc. ("D&D") is deemed to be the beneficial owner of 7,255,535 shares because it is the holder of 500,000 shares of Series B Preferred Stock which, as of May 21, 2001 were convertible into 4,711,405 shares of Common Stock and the holder of 300,000 shares of Series E Preferred Stock which, as of May 21, 2001, were convertible into 2,544,130 shares of Common Stock. D&D is the beneficial owner of 100% if the Company's Preferred Stock by virtue of its ownership of the 500,000 shares of Series B Preferred Stock and 300,000 shares of Series E Preferred Stock. The 500,000 shares of Series B Preferred Stock are entitled to a total of 4,711,405 votes and the Series E Preferred Stock are entitled to a total of 2,544,130 votes at the Annual Meeting of Shareholders which is the subject of the Proxy Statement. (2) Includes 1,000,000 shares of Common Stock issuable on exercise of options held by Mr. Gibbs. Under the terms of the options, 125,000 became exercisable on March 1, 2000, 125,000 become exercisable on March 1, 2001, 125,000 become exercisable on November 16, 2001, 125,000 become exercisable on March 1, 2002 125,000 become exercisable on November 16, 2002, 125,000 become exercisable on March 1, 2003, 125,000 become exercisable on November 16, 2003 and 125,000 become exercisable on November 16, 2004. (3) Includes 2,000,000 shares of Common Stock issuable on exercise of options held by Mr. McGee. Under the terms of the options, 62,500 shares became exercisable on June 26, 1997, 187,500 shares became exercisable on June 25, 1998, 62,500 shares became exercisable on June 26, 1998, 187,500 shares become exercisable on June 25, 1999, 62,500 shares became exercisable on June 26, 1999, 125,000 shares became exercisable on March 1, 2000, 187,500 shares become exercisable on June 25, 2000, 62,500 shares become exercisable on June 26, 2000, 125,000 shares become exercisable on March 1, 2001, 187,500 shares become exercisable on June 25, 2001, 125,000 become exercisable on November 16, 2001, 125,000 shares become exercisable on March 1, 2002, 125,000 become exercisable on November 16, 2002, 125,000 shares become exercisable on March 1, 2003, 125,000 become exercisable on November 16, 2003, and 125,000 become exercisable on November 16, 2004. ------------------------------------------------------------------------ The following table sets forth the ownership of each of the directors of the Company, and the directors and officers as a group, of the Company's Common Stock as of May 21, 2001. Name and Address Amount and Nature Percent of Beneficial Owner of Beneficial Ownership of Class ------------------- ----------------------- -------- Thomas E. Gibbs 7,135,000 (1) 12.5% Randall L. McGee 4,100,000 (2) 7.0% Earl H. Cohen 981,756 (3) 1.7% Scott Burri 750,000 (4) 1.3% All Officers and Directors as a group (4 persons) 12,966,756 22.5%
------------------------------------------------------------------------ (1) Includes 1,000,000 shares of Common Stock issuable on exercise of options held by Mr. Gibbs. Under the terms of the options, 125,000 became exercisable on March 1, 2000, 125,000 become exercisable on March 1, 2001, 125,000 become exercisable on November 16, 2001, 125,000 become exercisable on March 1, 2002 125,000 become exercisable on November 16, 2002, 125,000 become exercisable on March 1, 2003, 125,000 become exercisable on November 16, 2003 and 125,000 become exercisable on November 16, 2004. (2) Includes 2,000,000 shares of Common Stock issuable on exercise of options held by Mr. McGee. Under the terms of the options, 62,500 shares became exercisable on June 26, 1997, 187,500 shares became exercisable on June 25, 1998, 62,500 shares became exercisable on June 26, 1998, 187,500 shares become exercisable on June 25, 1999, 62,500 shares became exercisable on June 26, 1999, 125,000 shares became exercisable on March 1, 2000, 187,500 shares become exercisable on June 25, 2000 62,500 shares become exercisable on June 26, 2000, 125,000 shares become exercisable on March 1, 2001, 187,500 shares become exercisable on June 25, 2001, 125,000 become exercisable on November 16, 2001, 125,000 shares become exercisable on March 1, 2002 125,000 become exercisable on November 16, 2002, 125,000 shares become exercisable on March 1, 2003, 125,000 become exercisable on November 16, 2003 and 125,000 become exercisable on November 16, 2004. (3) Includes 250,000 shares of Common Stock issuable on exercise of an option held by Mr. Burri, which became exercisable on March 1, 2000, and 250,000 shares of Common Stock issuable on exercise of an option held by Mr. Burri that becomes exercisable on November 16, 2001. (4) Includes 250,000 shares of Common Stock issuable on exercise of an option held by Mr. Cohen, which became exercisable on June 26, 1997, 250,000 shares of Common Stock issuable on exercise of an option held by Mr. Cohen that became exercisable on March 1, 2000, and 250,000 shares of Common Stock issuable on exercise of an option held by Mr. Cohen that becomes exercisable on November 16, 2001. Management Compensation Executive Compensation The following table sets forth the compensation paid or accrued by the Company for service rendered during the last fiscal year to the Company's Chief Executive Officer and each of the most highly compensated officers of the Company whose compensation exceeds $100,000. Summary Compensation Table Name and Annual Compensation Long Term All Other Principal Position Year Salary Bonus Compensation Compensation ------------------ ---- ------ ----- ------------ ------------ Thomas E. Gibbs 2000 $165,000 $15,900 (1) -0- -0- Chairman of the Board 1999 $165,000 $30,625 (1) -0- -0- Chief Executive Officer 1998 $150,000 $18,975 (1) -0- -0- and President Randall L. McGee (2) Secretary, Treasurer, 1999 $ 76,500 $30,625 (1) -0- -0- Vice-President-Finance, (2) and Director
(1) The Company has an incentive plan whereby certain members of management receive a bonus based on operating income of the Company. (2) Mr. McGee's compensation was less than $100,000 in 2000 and 1998. None of the Company's officers currently have written employment agreements with the company. Aggregate Stock Option and Warrant Exercises in the Last Fiscal Year and Fiscal Year-End Option and Warrant Values The following table sets forth information regarding year-end value of options and warrants held by the Company's Executive Officers for the year ending December 31, 2000 and options and warrants that were exercised by the Company's Executive Officers during the year. Value of Number of Unexercised Unexercised In-The-Money Shares Value Options/Warrants Options/Warrants (1) Acquired Realized -----At Year End----- -----At Year End----- Name On Exercise At Exercise Exercisable Unexercisable Exercisable Unexercisable ---- ----------- ----------- ----------- ------------- ----------- ------------- Thomas E. Gibbs 2,500,000 $487,500 125,000 875,000 $ 630 $ 1,880 Randall L.McGee 500,000 $ 42,500 937,500 1,062,500 $ 14,690 $ 6,570
------------------------------------------------------------------------ (1) December 31, 2000 closing bid price was $0.055. Compensation Pursuant to Plans The Company adopted a Stock Option Plan on May 25, 1982. This plan was terminated in September, 1986. All options granted under this plan have expired or been extinguished. The Board of Directors of the Company adopted a new Stock Option Plan on September, 27, 1986 (the "Plan"). The Company currently has a total of 12,000,000 shares of Common Stock for issuance pursuant to the Plan. The Plan was approved by the stockholders of the Company on June 3, 1987. The Plan is designed as an incentive for directors and employees and is administered by the Compensation/Stock Option Committee of the Board of Directors, which selects optionees and determines the number of shares of Common Stock subject to each option and whether such option is an incentive or non-statutory stock option. The Plan provides that no option may be granted at a price less than the fair market value of the Common Stock on the date of grant. Unless otherwise specified, the options expire ten years from the date of grant and may not be exercised in whole or in part during the entire one-year period from date of grant. Thereafter, options may be exercised in whole or in part, depending on the terms of the particular option. There are currently 10,560,000 options outstanding under the Plan. Effective January 16, 1992, the Company established the USTI Employees' 401(K) Profit Sharing Plan and Trust (the "Plan"), which is a defined contribution plan that covers substantially all full-time employees of the Company eligible to participate. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 401(K) if the Internal Revenue Code. The Company may elect to make contributions for the benefit of the participants in the Plan, based on semi-annual resolutions of the Board of Directors. The Company made contributions for the benefit of the participants in the Plan in the amount of $ 4,300 for the year ended December 31, 2000. The Company offers a medical insurance plan for all full-time employees of the Company. The Company has no pension, profit sharing or insurance program for the benefit of its directors, officers or employees. Director Compensation No officer or director of the Company receives any cash compensation for services as a director. Non-management directors receive reasonable expenses incurred for attendance at meetings of the Board of Directors. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Share Issuances In February 1994, pursuant to the terms of his employment by the Company, the Company granted Mr. Thomas E. Gibbs (1) an option to purchase 1,500,000 shares of the Company's Common Stock at an exercise price of $.08 per share, and (2) 1,000,000 shares of Common Stock. In July, 1995, the Company granted an option to Mr. Gibbs to purchase 1,500,000 shares of its Common Stock at a price of $.035 per share and the Company canceled the option issued to Mr. Gibbs in February 1994 to purchase 1,500,000 shares of its Common Stock and, in addition, issued a new option to Mr. Gibbs to purchase 1,500,000 shares of its Common Stock at a price of $.035 per share. In September 1998, the Company sold 5,000,000 shares of common stock to four members of management at a price of $.01 per share. Mr. Gibbs purchased 1,000,000 shares and Mr. McGee purchased 1,500,000 shares of common stock as part of this transaction. The fair market value of the common stock on the date of the transaction was $.022 per share. RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS The Board of Directors appointed the firm Grant Thornton LLP as the independent public accountants of the Company for the fiscal year 2000 and recommends to the shareholders that they vote for ratification of this appointment. Grant Thornton LLP was engaged as the Company's independent accountants in December 1993. Such firm audited the financial statements of the Company for the years ended December 31, 2000, 1999, 1998, 1997, 1996, 1995, 1994 and 1993, including the audited financial statements dated December 31, 2000 filed by the Company with the Securities and Exchange Commission in its Annual Report on Form 10-KSB. Representatives of the firm Grant Thornton LLP, may be present at the Annual Meeting and, if present, will be available to make a statement if they desire to do so and to respond to appropriate shareholder' questions. In connection with its audits of the financial statements of the Company's 1993, 1994, 1995, 1996, 1997, 1998, 1999 and 2000 fiscal years, there have been no reportable disagreements with Grant Thornton LLP on any matter of accounting principles or practices, financial statement disclosures, or auditing scope or procedures. OTHER BUSINESS Management of the Company knows of no other business, which may come before the meeting. However, if any additional matters are properly presented at the meeting, it is intended that the persons named in the enclosed Proxy, or their substitutes, will vote such Proxy in accordance with their judgment on such matters. SHAREHOLDER PROPOSALS FOR 2002 ANNUAL MEETING Shareholder proposals intended for presentation at the Company's next Annual Meeting must be received by the Company at its principal executive offices in Dallas, Texas, no later than January 4, 2002. ANNUAL REPORT TO SHAREHOLDERS The Company's Annual Report to Shareholders, which includes financial statements, is enclosed with this Proxy Statement. ------------------------------------------------------------------------ ------------------------------------------------------------------------ FRONT OF CARD ------------------------------------------------------------------------ PROXY PROXY UNITED SYSTEMS TECHNOLOGY, INC. ANNUAL MEETING OF SHAREHOLDERS - June 27, 2001 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Thomas E. Gibbs and Randall L. McGee severally as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and vote, as designated below, all of the votes to which the undersigned shares of United Systems Technology, Inc. are entitled at the Annual Meeting of Shareholders of the Company and at any and all adjournments thereof, with respect to the matters set forth below and described in the Notice of Annual Meeting and Proxy Statement, dated May 29, 2001, receipt of which is hereby acknowledged. 1. ELECTION OF DIRECTORS [ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY (except as marked to the contrary below) to vote for all nominees below INSTRUCTIONS: TO withhold authority to vote for any nominee below, strike a line through the nominee's name: Thomas E. Gibbs, Randall L. McGee, Earl H. Cohen, Scott Burri 2. Ratification of Grant Thornton LLP as Independent Public Accountants for the Company: [ ] FOR [ ] AGAINST [ ] ABSTAIN 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting or any and all adjournments thereof. ------------------------------------------------------------------------ BACK OF CARD ------------------------------------------------------------------------ This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned Shareholder. If no indication is made, this proxy will be voted for all nominees for director and for Proposal 2. Please sign exactly as your name appears hereon. When the shares are held by joint tenants, both should sign. When signing as an attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in the partnership name by an authorized person. ------------------------------------------ Signature ------------------------------------------ Signature, if held jointly Dated:______________________, 2001 PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED POSTAGE PRE-PAID ENVELOPE.