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
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) |
Navtech, 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)(1) and 0-11. |
| | 1) | Title of each class of securities to which transaction applies: |
| | 2) | Aggregate number of securities to which transaction applies: |
| | 3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: (Set forth the amount on which the filing fee is calculated and state how it was determined) |
| | 4) | Proposed maximum aggregate value of transaction: |
| | 5) | Total fee paid: |
| | [ ] | Fee paid previously with preliminary materials: |
| [ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
| | 1) | Amount previously paid: |
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| | 4) | Date Filed: |
NAVTECH, INC.
Notice of Annual Meeting of Shareholders
March 30, 2007
To the Shareholders
of Navtech, Inc.
Notice is hereby given that the Annual Meeting of Shareholders of NAVTECH, INC., a Delaware corporation, will be held at Suite 200, 295 Hagey Blvd., Waterloo, Ontario, Canada N2L 6R5 on Friday, March 30, 2007 at 10:00 a.m., local time, for the following purposes:
(1) (2) | To elect a board of six directors. To transact such other business as may properly come before the meeting. |
Only shareholders of record at the close of business on February 20, 2007 are entitled to notice of, and to vote at, the meeting or any adjournment thereof.
David Strucke
Secretary
February 21, 2007
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE, DATE AND SIGN THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS OF NAVTECH, AND RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT PURPOSE. A SHAREHOLDER MAY REVOKE HIS PROXY AT ANY TIME BEFORE THE MEETING BY WRITTEN NOTICE TO SUCH EFFECT, BY SUBMITTING A SUBSEQUENTLY DATED PROXY OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
NAVTECH, INC.
PROXY STATEMENT
This Proxy Statement is being mailed to you on or about February 21, 2007. All of our shareholders of record at the close of business on February 20, 2007 are being mailed this Proxy Statement in connection with the solicitation by our Board of Directors of proxies to be voted at the Annual Meeting of Shareholders to be held on March 30, 2007, at Suite 200, 295 Hagey Blvd., Waterloo, Ontario, Canada N2L 6R5 at 10:00 a.m. local time, or any adjournment thereof.
All proxies duly executed and received will be voted on the matters presented at the meeting in accordance with the specifications made in such proxies. In the absence of specified instructions, proxies so received will be voted FOR the named nominees to our Board of Directors.
The Board does not know of any other matters that may be brought before the meeting nor does it foresee or have reason to believe that proxy holders will have to vote for substitute or alternate nominees to the Board. In the event that any other matter should come before the meeting or any nominee is not available for election, the persons named in the enclosed proxy will have discretionary authority to vote all proxies not marked to the contrary with respect to such matters in accordance with their best judgment.
At February 20, 2007, we had two classes of stock outstanding: common stock, par value $.001 per share (the “Common Stock”), and series A convertible participating preferred stock, par value $.01 per share. We refer to the series A convertible participating preferred stock as the “Series A Preferred Stock.” We refer to the Common Stock and the Series A Preferred Stock together as “Capital Stock.” On February 20, 2007, there were outstanding 4,333,450 shares of Common Stock and 1,600,000 shares of Series A Preferred Stock. Each share of Common Stock entitles the holder to one vote on each matter submitted to stockholders. Each share of Series A Preferred entitles the holder to one vote on each matter submitted to stockholders. The holders of the Common Stock and the Series A Preferred Stock vote together as a single class on all matters submitted to stockholders. A majority of the Capital Stock outstanding and entitled to vote as of February 20, 2007, or 2,966,726 shares of Capital Stock, must be present at the meeting in person or by proxy in order to constitute a quorum for the transaction of business. Only shareholders of record as of the close of business on February 20, 2007 will be entitled to vote.
With regard to the election of directors, votes may be cast in favor or withheld. The directors shall be elected by a plurality of the votes cast in favor. Accordingly, based upon there being six nominees, each person who receives one or more votes will be elected as a director. Votes withheld in connection with the election of one or more of the nominees for director will not be counted as votes cast for such individuals.
Any person giving a proxy in the form accompanying this Proxy Statement has the power to revoke it at any time before its exercise. The proxy may be revoked by filing with Navtech written notice of revocation or a fully executed proxy bearing a later date. The proxy may also be revoked by affirmatively electing to vote in person while in attendance at the meeting. However, a shareholder who attends the meeting need not revoke a proxy given and vote in person unless the shareholder wishes to do so. Written revocation or amended proxies should be sent to the attention of our Corporate Secretary at the offices of our subsidiary, Navtech Systems Support Inc., located at Suite 200, 295 Hagey Blvd., Waterloo, Ontario, Canada N2L 6R5.
The proxy is being solicited by our Board of Directors. We will bear the cost of the solicitation of proxies including the charges and expenses of brokerage firms and other custodians, nominees and fiduciaries for forwarding proxy materials to beneficial owners of Capital Stock. Solicitations will be made primarily by mail, but certain of our directors, officers or employees may solicit proxies in person or by telephone, telecopier, or e-mail without special compensation.
A list of shareholders entitled to vote at the meeting will be available for your examination at the offices of our subsidiary, Navtech Systems Support Inc., Suite 200, 295 Hagey Blvd., Waterloo, Ontario, Canada N2L 6R5, for a period of ten days prior to the meeting and will also be available at the meeting.
Summary Compensation Table
The following table sets forth information concerning the compensation for the last three fiscal years of all of our executive officers as of October 31, 2006 who had a total salary and bonus for such year in excess of $100,000.
| | | | Annual Compensation | Long-Term Compensation Awards |
Name and Principal Position | Year | | | Salary | | | Bonus | | Common Stock Underlying Options | |
| David Strucke, Chief Executive Officer | 2006 2005 2004 | | $ $ $ | 232,697 156,215 130,807 | | $ $ $ | 72,998 65,876 32,417 | | 112,500 -0- 50,000 | |
| Gordon Heard, Chief Financial Officer | 2006 2005 2004 | | $ $ $ | 162,449 117,460 98,664 | | $ $ $ | 26,343 -0- -0- | | 87,500 -0- 50,000 | |
| Britt Bowra, Vice President, Sales and Business Development | 2006 2005 2004 | | $ $ $ | 140,541 113,179 94,631 | | $ $ $ | 26,343 -0- -0- | | 32,000 -0- -0- | |
Johan Holmqvist, Vice President, Operations(1) | 2006 2005 2004 | | $ $ $ | 106,568 -0- -0- | | $ $ $ | 21,314 -0- -0- | | 32,000 -0- -0- | |
| (1) | Mr. Holmqvist joined Navtech as Vice President, Operations in November 2005. |
Option Tables
OPTION GRANTS IN FISCAL YEAR ENDED OCTOBER 31, 2006
Name | Number of Shares of Common Stock Underlying Options Granted | Percent of Total Options Granted to Employees in Fiscal Year | Exercise Price/Share | Expiration Date |
David Strucke | 112,500 | 38% | $2.76 | January 17, 2016 |
Gordon Heard | 87,500 | 29% | $2.76 | January 17, 2016 |
Britt Bowra | 32,000 | 11% | $2.77 | February 15, 2011 |
Johan Holmqvist | 32,000 | 11% | $2.77 | February 7, 2011 |
AGGREGATED OPTION EXERCISES IN FISCAL YEAR ENDED OCTOBER 31, 2006 AND FISCAL
YEAR-END OPTION VALUES
Name | Shares Acquired on Exercise | Value Realized | Number of Shares of Common Stock Underlying Unexercised Options at October 31, 2006 | Value of Unexercised In-the-Money Options at October 31, 2006 |
| | | | Exercisable/Unexercisable | Exercisable/Unexercisable |
David Strucke | -0- | -0- | 150,000/112,500 | $389,500/$32,625 |
Gordon Heard | -0- | -0- | 43,750/93,750 | $92,875/$39,750 |
Britt Bowra | -0- | -0- | -0-/32,000 | -0-/$8,960 |
Johan Holmqvist | -0- | -0- | -0-/32,000 | -0-/$8,960 |
Long-Term Incentive Plan Awards
No awards were made to Messrs. Strucke, Heard, Bowra, or Holmqvist during the fiscal year ended October 31, 2006 under any long-term incentive plan.
Compensation of Directors
Our directors, with the exception of salaried officers, are entitled to receive an annual retainer of $6,000 (payable quarterly in advance). The Chairman of the Board is entitled to receive an annual retainer of $10,000 (payable quarterly in advance).
The Chairman of the Audit Committee is entitled to receive an annual retainer of $8,000 (payable quarterly in advance). Members of the Audit Committee receive an annual retainer of $5,000 (payable quarterly in advance).
The Chairman of the Human Resources and Compensation Committee receives an annual retainer of $5,000 (payable quarterly in advance). Members of the Human Resources and Compensation Committee receive an annual retainer of $3,000 (payable quarterly in advance).
The Chairman of the Corporate Governance Committee is entitled to receive an annual retainer of $5,000 (payable quarterly in advance). Members of the Corporate Governance Committee receive an annual retainer of $3,000 (payable quarterly in advance).
In addition, our directors are entitled to be reimbursed for travel expenses incurred in attending any meeting of the Board or any of its committees. Our By-Laws also provide, to the extent permitted by law, for certain indemnification of our directors.
Employment Contracts, Termination of Employment and Change-In-Control Arrangements
We have entered into an employment agreement with Mr. Strucke that provides for an annual base salary of $265,000 (CDN) ($236,000 USD). In addition, Mr. Strucke is eligible for an annual performance bonus of $132,500 (CDN) ($118,000 USD) based upon the achievement of specific performance objectives established by our Board’s Human Resources and Compensation Committee. In the event we terminate Mr. Strucke’s employment without cause, he would be entitled to receive an amount equal to 12 months base salary, and an additional month base salary for every year of service after November 1, 2005 to a maximum entitlement of 18 months.
We have entered into an employment agreement with Mr. Heard that provides for an annual base salary of $185,000 (CDN) ($165,000 USD). In addition, Mr. Heard is eligible for an annual performance bonus of $37,000 (CDN) ($33,000 USD) based upon the achievement of specific performance objectives established by our Board’s Human Resources and Compensation Committee. In the event we terminate Mr. Heard’s employment without cause, he would be entitled to receive an amount equal to six months base salary.
We have entered into an employment agreement with Mr. Bowra that provides for an annual base salary of $138,375 (CDN) ($123,000 USD). In addition, Mr. Bowra is eligible to receive an annual performance bonus of $75,000 (CDN) ($67,000 USD) based upon the achievement of specific performance objectives established by our Board’s Human Resources and Compensation Committee. In the event we terminate Mr. Bowra’s employment without cause, he would be entitled to receive an amount equal to nine months base salary, and an additional month base salary for every year of service after February 1, 2006 to a maximum entitlement of 12 months.
We have entered into an employment agreement with Mr. Holmqvist that provides for an annual base salary of SEK $1,000,000 ($138,100 USD). In the event we terminate Mr. Holmqvist’s employment without cause, he would be entitled to receive an amount equal to twelve months base salary.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At January 31, 2007, we had two classes of stock outstanding: Common Stock and Series A Preferred Stock. We refer to the Common Stock and the Series A Preferred Stock together as “Capital Stock.” On January 31, 2007, there were outstanding 4,333,450 shares of Common Stock and 1,600,000 shares of Series A Preferred Stock. Each share of Common Stock entitles the holder to one vote on each matter submitted to stockholders. Each share of Series A Preferred Stock is convertible, at the holder’s option, into one share of Common Stock, and entitles the holder to one vote on each matter submitted to stockholders. We refer to the number of votes the holder of a share of Capital Stock is entitled to cast as the share’s “voting power” and the aggregate of all votes entitled to be cast by a holder of Capital Stock as that holder’s “total voting power.” In calculating the number of votes to which a holder of Series A Preferred Stock is entitled, any shares issuable upon the conversion of accrued but unpaid dividends are disregarded.
The following table sets forth certain information regarding our outstanding Common Stock and Series A Preferred Stock beneficially owned as of January 31, 2007 by:
| · | each person who is known by us to own beneficially or exercise voting or dispositive control over more than 5% of our Common Stock and Series A Preferred Stock, |
| · | each person named in the Summary Compensation Table above, and |
| · | all of our present executive officers and directors as a group |
Name and Address of Beneficial Owner | Common Stock | Series A Preferred Stock | Percent of Total Voting Power |
Number of Shares Beneficially Owned | Approximate Percentage of Class | Number of Shares Beneficially Owned | Approximate Percentage of Class |
Robert N. Snyder (1) | 2,725,633 (2)(3) | 48.6% | 1,200,000(4) | 75% | 45.4% |
Alain Mallart (5) | 1,258,670 (3)(6) | 26.5% | 400,000(7) | 25% | 21.1% |
John Hunt 111 Huntington Avenue Boston, Massachusetts | 378,843 (8) | 8.1% | - | - | 6.1% |
Dorothy English (9) | 328,958 | 7.6% | - | - | 5.5% |
David Strucke (9) | 268,125 (10) | 5.9% | - | - | 4.4% |
Andrew M. Snyder (1) | 92,316 (3)(11) | 2.1% | - | - | 1.6% |
Michael Jakobowski (1) | 88,500 (12) | 2.0% | - | - | 1.5% |
Thomas D. Beynon 675 Riverbend Drive Kitchener, Ontario, Canada | 70,000 (13) | 1.6% | - | - | 1.2% |
Gordon Heard (9) | 67,708 (14) | 1.5% | - | - | 1.1% |
Britt Bowra (9) | 28,000 (15) | * | - | - | * |
Johan Holmqvist Hammerbacken 12, Sollentuna, Stockholm Sweden | 8,000 (14) | * | - | - | * |
Françoise Macq (5) | -0- | - | - | - | - |
All executive officers and directors as a group (10 persons) | 1,001,492 (3)(8)(10)(11)(12) (13)(14)(15) | 20.0% | - | - | 15.2% |
* Less than 1%
| (1) | Address is 7200 Wisconsin Avenue, Bethesda, Maryland |
| (2) | Based upon Schedule 13D, as amended, filed with the Securities and Exchange Commission and other publicly available information. Includes (i) 1,260,633 shares owned by Cambridge Information Group, Inc. (“Cambridge”), of which Robert N. Snyder is the controlling shareholder, (ii) 1,200,000 shares that are issuable upon the conversion of Series A Preferred Stock held by Cambridge, (iii) 75,000 shares that are issuable upon the exercise of warrants held by Cambridge that are currently exercisable, and (iv) 40,000 shares owned by Wyoming Investments Limited Partnership, of which Robert N. Snyder is a general partner. Robert N. Snyder shares voting and dispositive control over the shares beneficially owned by Cambridge. Excludes shares that are issuable upon the conversion of accrued and unpaid dividends on the Series A Preferred Stock. |
| (3) | Based upon Schedule 13D, as amended, filed with the Securities and Exchange Commission. Robert N. Snyder, Andrew M. Snyder, Republic Electronics Corporation (of which Michael Ueltzen, one of our former directors, is the majority shareholder, President and Chief Executive Officer), Externalis S.A. (formerly known as Finextern S.A.) (of which Alain Mallart is the controlling shareholder), and Dorothy English, among others, are parties to a Shareholders Agreement, dated as of March 4, 2005, relating to the 2,525,868 shares of Common Stock collectively beneficially owned by them at such time. Except as indicated in the footnotes hereto, each party to the Shareholders Agreement has the sole power to vote or direct the vote, and the sole power to dispose or direct the disposition of, its respective shares. Pursuant to the Shareholders Agreement, the parties have agreed, among other things, and subject to limited exception, to vote in favor of the election to our Board of those persons nominated to serve as directors by our Board. The term of the Shareholders Agreement is five years, or less under certain circumstances. |
| (4) | Represents shares owned by Cambridge, of which Robert N. Snyder is the controlling shareholder. Robert N. Snyder shares voting and dispositive control over the shares beneficially owned by Cambridge. |
| (5) | Address is 38 avenue des Klauwaerts, 1050 Brussels, Belgium. |
| (6) | Based upon Schedule 13D, as amended, filed with the Securities and Exchange Commission. Represents (i) 833,670 shares held by Externalis S.A., (ii) 400,000 shares that are issuable upon the conversion of Series A Preferred Stock held by Externalis S.A. and (iii) 25,000 shares that are issuable upon the exercise of warrants held by Externalis S.A. that are currently exercisable. Mr. Mallart is the controlling shareholder of Externalis S.A. and shares with Externalis S.A. the voting and dispositive control over the shares beneficially owned by it. Excludes shares that are issuable upon the conversion of accrued and unpaid dividends on the Series A Preferred Stock. |
| (7) | Represents shares owned by Externalis S.A. of which Alain Mallart is a controlling shareholder. Mr. Mallart shares voting and dispositive control over the shares beneficially owned by Externalis S.A. |
| (8) | Based upon Schedule 13D filed with the Securities and Exchange Commission. Represents (i) 66,667 shares held by ABRY Mezzanine Partners, L.P., and (ii) 312,176 shares that are issuable upon the exercise of warrants held by ABRY Mezzanine Partners, L.P. that are currently exercisable. The general partner of ABRY Mezzanine Partners, L.P. is ABRY Mezzanine Investors, L.P. ABRY Mezzanine Investors, L.P.’s general partner is ABRY Mezzanine Holdings LLC. Mr. Hunt is a Vice President of ABRY Mezzanine Holdings LLC. An Investment Committee of ABRY Mezzanine Holdings LLC exercises exclusive decision making authority with respect to investments by ABRY Mezzanine Partners, L.P. |
| (9) | Address is Suite 200, 295 Hagey Blvd., Waterloo, Ontario, Canada. |
| (10) | Includes 178,125 shares that are issuable upon the exercise of options that are exercisable currently or within 60 days. |
| (11) | Does not include (i) 750,000 shares owned by Cambridge, of which Andrew M. Snyder is President and a shareholder, (ii) 1,200,000 shares that are issuable upon the conversion of Series A Preferred Stock held by Cambridge and (iii) 75,000 shares that are issuable upon the exercise of warrants held by Cambridge that are currently exercisable. |
| (12) | Includes 50,000 shares that are issuable upon the exercise of options that are currently exercisable. |
| (13) | Includes 45,000 shares that are issuable upon the exercise of options that are currently exercisable. |
| (14) | Represents shares that are issuable upon the exercise of options that are exercisable currently or within 60 days. |
| (15) | Includes 8,000 shares that are issuable upon the exercise of options that are exercisable currently or within 60 days. |
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table sets forth information as of October 31, 2006 with respect to compensation plans (including individual compensation arrangements) under which our Common Stock is authorized for issuance, aggregated as follows:
| · | All compensation plans previously approved by security holders; and |
| · | All compensation plans not previously approved by security holders. |
EQUITY COMPENSATION PLAN INFORMATION
| | Number of securities to be issued upon exercise of outstanding options, warrants and rights (column (a)) | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
| Equity compensation plans approved by security holders | 675,000 | $1.61 | 1,524,078 |
| Equity compensation plans not approved by security holders | -0- | -0- | -0- |
| Total | 675,000 | $1.61 | 1,524,078 |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 22, 2005, we entered into a Series A Convertible Participating Preferred Stock and Warrant Purchase Agreement with Cambridge Information Group, Inc. (“Cambridge”) and Externalis S.A. (“Externalis”, and together with Cambridge, the “Investors”) (the “Series A Purchase Agreement”) whereby the Investors purchased 1,600,000 shares of our Series A Preferred Stock (1,200,000 by Cambridge and 400,000 by Externalis) and warrants (the “Warrants”) evidencing the right to acquire an aggregate of 100,000 shares of our Common Stock (75,000 by Cambridge and 25,000 by Externalis), for an aggregate purchase price of $4,000,000 (the “Preferred Stock Offering”). Pursuant to the terms of the Series A Purchase Agreement, we granted to the Investors preemptive rights in connection with issuances by us of certain of our shares of capital stock that in any way rank senior to the Common Stock. The proceeds received by us in connection with the Preferred Stock Offering were used to consummate the acquisition of European Aeronautical Group AB (“EAG”). Each of the Investors was, prior to the execution of the Series A Purchase Agreement, and currently is, one of our principal stockholders. See “Security Ownership of Certain Beneficial Owners and Management.”
The Series A Preferred Stock is senior in rights, preferences and privileges to the Common Stock as more fully described in the Certificate of Designation creating the Series A Preferred Stock.
The Series A Preferred Stock has the following material terms:
Dividends. The holders (each a “Holder” and, collectively, the “Holders”) of the Series A Preferred Stock are entitled to receive, if and when declared by our Board of Directors and paid by us, in preference to the holders of the shares of Common Stock and our other capital stock ranking junior to the Series A Preferred Stock as to the payment of dividends, annual dividends at the rate per annum of $0.125 per share. Such dividends will accrue on a daily basis, whether or not earned or declared, and will be compounded annually (to the extent such accruing dividends remain unpaid) on each anniversary of the issuance of the Series A Preferred Stock. In addition to the dividend described above, the Holders are entitled to participate ratably on any dividends paid with respect to the Common Stock. In the case of any such dividend, each Holder shall be entitled to receive an amount as of the record date for such dividend that would be payable on the largest number of whole shares of Common Stock into which such shares of Series A Preferred Stock held by such Holder could be converted pursuant to the terms of the Certificate of Designation. Subsequent to the 2006 fiscal year-end, we declared and paid a dividend of $200,000 on the Series A Preferred Stock.
Convertibility. The Series A Preferred Stock is convertible at the option of the Holder, at any time after the date of issuance and without payment of additional consideration, into that number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Series A Liquidation Preference (as defined below) per share of Series A Preferred Stock by the Series A Conversion Price (as defined below), in each case as in effect at the time of conversion. The “Series A Conversion Price” at which shares of Common Stock shall be deliverable upon conversion of Series A Preferred Stock shall initially be $2.50 per share. The “Series A Liquidation Preference” shall be $2.50 per share of Series A Preferred Stock (subject to equitable adjustment in the event of any stock dividend, stock split, combination, reorganization, recapitalization, reclassification, or other similar event affecting such shares), plus all accrued but unpaid dividends on the Series A Preferred Stock. Such initial Series A Conversion Price shall be subject to anti-dilution adjustment (in order to adjust the number of shares of Common Stock into which the Series A Preferred Stock is convertible) as provided in the Certificate of Designation. At our option, we may elect to convert not less than all of the outstanding shares of Series A Preferred Stock at the then effective Series A Liquidation Preference (i) at any time on or after November 22, 2006, if the 30-trading day trailing average of the Common Stock (as reported on Yahoo Finance (www.yahoo.com)) exceeds 250% of the then effective conversion price (the “Trigger Date”, and each a “Trigger Date”), provided that we must exercise such conversion right within 60 days after the applicable Trigger Date, or (ii) upon the closing of an underwritten, firm commitment public offering pursuant to an effective registration statement under the Securities Act of 1933, in which the price to the public per share of Common Stock exceeds 200% of the then effective Series A Conversion Price.
Voting Rights. Subject to certain limitations, the Holders are entitled to vote with the holders of Common Stock, voting together as one class, on all matters submitted to a vote of the holders of Common Stock, and each share of Series A Preferred Stock is entitled to a number of votes equal to the number of shares of Common Stock into which each such share is convertible as of the record date for the applicable vote. In addition, we may not, without the consent of the Holders of a majority of the shares of the Series A Preferred Stock then outstanding, take certain actions, including, without limitation, (i) create a new class or series of capital stock that are, with respect to the payment of dividends or upon liquidation, senior to or pari passu with the Series A Preferred Stock, (ii) alter, amend or repeal the rights, preferences and privileges of the Series A Preferred Stock or (iii) amend, alter or repeal any provision of the Certificate of Designation.
Liquidation. Upon the liquidation, dissolution, change of control or winding-up of Navtech, the Holders will be entitled to receive an amount equal to the greater of (i) $2.50 per share of Series A Preferred Stock (subject to anti-dilution adjustments) plus accrued and unpaid dividends or (ii) the amount that they would have received if they had converted their shares of Series A Preferred Stock into Common Stock on the day prior to the liquidation, dissolution, change of control or winding-up.
The Warrants have an exercise price of $3.00 (subject to adjustment as set forth in the Warrants), are exercisable at any time from the date of issuance until the tenth anniversary of the date of issuance and have weighted average anti-dilution protection provisions as set forth in the Warrants.
In connection with the Series A Purchase Agreement, we entered into a registration rights agreement dated November 22, 2005 with, among others, the Investors (the “Registration Rights Agreement”). The Registration Rights Agreement obligates us to file a registration statement covering, among other shares, (i) the shares of Common Stock issuable upon conversion of the Series A Preferred Stock, (ii) the shares of Common Stock issuable upon the exercise of the Warrants and (iii) any shares of Common Stock previously held by the Investors or acquired after the date of the Registration Rights Agreement by the Investors. Pursuant to the terms of the Registration Rights Agreement, the Investors are entitled to two demand registration rights and unlimited piggy-back registration rights.
In connection with the Series A Purchase Agreement, we entered into a letter agreement dated November 22, 2005 with Cambridge (the “Letter Agreement”), whereby we granted Cambridge the right to designate two members to serve on our Board of Directors so long as Cambridge holds 22% of our Common Stock on a fully-diluted and as converted basis. The Letter Agreement further provides that Cambridge shall have the right to designate one member to serve on our Board of Directors so long as Cambridge holds 10% of our Common Stock on a fully-diluted and as converted basis. Subject to the requirements of applicable law and any other rules or regulations that apply to us, the persons designated by Cambridge to serve as directors pursuant to the terms of the Letter Agreement shall also be entitled to serve on all committees of the Board of Directors established by the Board. Effective upon the closing of the Preferred Stock Offering and pursuant to and in accordance with the terms of the Letter Agreement, Andrew M. Snyder, a designee of Cambridge, was appointed to fill one existing vacancy on our Board of Directors by the sitting members of our Board.
The foregoing is only a summary of the provisions of the Series A Purchase Agreement, the Warrants, the Certificate of Designation, the Registration Rights Agreement and the Letter Agreement.
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees
Six directors are to be elected at the meeting to serve until the next Annual Meeting of Shareholders and until their respective successors have been elected and have qualified, or until their earlier resignation or removal.
The following table sets forth the positions and offices presently held with us by each nominee for election as director, his or her age as of February 20, 2007, and the year in which he or she became a director. Proxies not marked to the contrary will be voted in favor of their election.
Name | Age | Positions and Offices | Year Became Director |
| David Strucke | 38 | President, Chief Executive Officer, Secretary and Director | 2001 |
| Thomas D. Beynon | 65 | Director | 2000 |
| Michael Jakobowski | 47 | Director | 2001 |
| John Hunt | 41 | Director | 2005 |
| Andrew M. Snyder | 36 | Director | 2005 |
| Françoise Macq | 43 | Director | 2006 |
David Strucke has served as our President, Chief Executive Officer, Secretary and a director since November 2001. Mr. Strucke also served as our Chief Financial Officer from January 2000 to November 2003. Mr. Strucke served as Vice President, Finance & Accounting of Navtech-Canada from October 1999 to January 2000 and as its Director of Finance and Accounting and a Business Analyst from January 1999 to October 1999. Prior to joining us, Mr. Strucke served as a Financial Analyst focusing on mergers and acquisitions and performed financial and accounting consulting work from 1996 to 1998. Mr. Strucke obtained a Masters of Business Administration from Wilfrid Laurier University and is a graduate of the University of Waterloo with a Bachelor’s degree in Science in Engineering. Mr. Strucke has lectured on Introductory Finance for the undergraduate business program at Wilfrid Laurier University.
Thomas D. Beynon is a partner in the Waterloo, Ontario law firm of McCarter Grespan Beynon LLP and a member of the Law Society of Upper Canada. He has been with the firm since March 1996. Prior to this, Mr. Beynon spent six years with the law firm, Sims Clement Eastman, from 1991 to 1996. Mr. Beynon serves as Corporate Secretary of Virtek Vision International Inc., a public company, and is a director of a number of private companies. Mr. Beynon has served as one of our directors since July 2000.
Michael Jakobowski has served as Chief Financial Officer of Cambridge since September 1999. Prior to joining Cambridge, Mr. Jakobowski was the Vice President of Accounting for Thomson Financial Database Group from August 1997 to September 1999, and the Corporate Controller for Kline Group from June 1994 to August 1997. Prior to 1994, Mr. Jakobowski spent over 11 years in public accounting with Price Waterhouse, Coopers & Lybrand, and Johnson Lambert and Co. Mr. Jakobowski is a member of the American Institute of Certified Public Accountants. Mr. Jakobowski has served as one of our directors since November 2001.
John Hunt is a partner at ABRY Partners, LLC (ABRY). Mr. Hunt joined ABRY in 2004. ABRY, headquartered in Boston, is a private equity firm focused on the media and communications industry. Mr. Hunt is also co-head of ABRY Mezzanine Partners, LP. From 1990 until May 2004, Mr. Hunt was a general partner at Boston Ventures Management, Inc., a media and communications focused private equity fund. Mr. Hunt serves on the board of SoftBrands, Inc. and on the boards of a number of private companies. Mr. Hunt has served as one of our directors since November 2005.
Andrew M. Snyder is the President of Cambridge, a privately-owned group of information services, publishing, and education companies. Mr. Snyder has been with Cambridge since 2003, and is also Chairman of Cambridge’s subsidiary, RR Bowker. Prior to joining Cambridge, Mr. Snyder spent seven years at the Goldman Sachs Group, most recently as Vice President in the Principal Investment Area. He also spent one year as the Assistant to the Chairman. Mr. Snyder graduated from the Wharton School at the University of Pennsylvania, and earned a J.D. from Georgetown University Law Center. He is a member of the Bar of the State of New York. Mr. Snyder has served as one of our directors since November 2005.
Françoise Macq is the CEO of Externalis, a privately-owned holding company based in Brussels, Belgium. Prior to joining Externalis, Mrs. Macq spent nine years as an Investment Manager for Société Régionale d’Investissement de Bruxelles. Mrs. Macq began her career in the Corporate Finance Department of Morgan Stanley in London and subsequently worked as a Research Analyst specializing in oil companies in the Equity Research Department. Mrs. Macq graduated as a lawyer from Université Catholique de Louvain. Mrs. Macq has served as one of our directors since June 2006. Mrs. Macq was appointed to our Board following a request for Board representation made by Externalis, one of our principal shareholders.
Committees
The Audit Committee of the Board of Directors assists the Board in fulfilling its responsibilities for oversight of the quality and integrity of our accounting, auditing, internal control and financial reporting practices. It may also have such other duties as may from time to time be assigned to it by the Board. The members of the Audit Committee currently are Messrs. Jakobowski, Beynon and Hunt, with Mr. Jakobowski serving as Chairman. Mr. Jakobowski is not an “independent director” based on the definition of independence in Rule 4200(a)(15) of the listing standards of the National Association of Securities Dealers. Messrs. Beynon and Hunt are “independent” directors based on the definition of independence in Rule 4200(a)(15) of the listing standards of the National Association of Securities Dealers and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934. Our Board of Directors has determined that Mr. Jakobowski is an “audit committee financial expert,” as that term is defined in Item 401(e)(2) of Regulation S-B. The Board of Directors has adopted a written charter for the Audit Committee. A copy of the charter is available to security holders on our website, www.navtechinc.com.
The Corporate Governance and Nominating Committee of the Board of Directors assists the Board in fulfilling its responsibilities by developing and reviewing the corporate governance policies, practices, and processes, makes recommendations to the Board on qualifications and selection criteria for Board members and makes recommendations to the Board on nominees to be elected at the Annual Meeting of Shareholders. The members of the Corporate Governance and Nominating Committee currently are Messrs. Snyder and Beynon, with Mr. Snyder serving as Chairman. Mr. Snyder is not an “independent director” based on the definition of independence in Rule 4200(a)(15) of the listing standards of the National Association of Securities Dealers. Mr. Beynon is an “independent” director based on the definition of independence in Rule 4200(a)(15) of the listing standards of the National Association of Securities Dealers. The Board of Directors has adopted a written charter for the Corporate Governance and Nominating Committee. A copy of the charter is available to security holders on our website, www.navtechinc.com. The Corporate Governance and Nominating Committee will consider qualified director candidates recommended by shareholders if such recommendations for director are submitted in writing to our Secretary at c/o Navtech Systems Support Inc., Suite 200, 295 Hagey Blvd., Waterloo, Ontario, Canada N2L 6R5. At this time, no additional specific procedures to propose a candidate for consideration by the Corporate Governance and Nominating Committee, nor any minimum criteria for consideration of a proposed candidate for nomination to the Board, have been adopted.
The Human Resources and Compensation Committee of the Board of Directors assists the Board in fulfilling its responsibilities by reviewing compensation and human resources issues in support of the achievement of our business strategy and making recommendations where appropriate. The members of the Human Resources and Compensation Committee currently are Messrs. Hunt, Beynon and Snyder, with Mr. Hunt serving as Chairman. Mr. Snyder is not an “independent director” based on the definition of independence in Rule 4200(a)(15) of the listing standards of the National Association of Securities Dealers. Messrs. Hunt and Beynon are “independent” directors based on the definition of independence in Rule 4200(a)(15) of the listing standards of the National Association of Securities Dealers. The Board of Directors has adopted a written charter for the Human Resources and Compensation Committee. A copy of the charter is available to security holders on our website, www.navtechinc.com.
There are no other committees of the Board of Directors, all other functions being performed by the Board as a whole.
Report of the Audit Committee
In overseeing the preparation of Navtech’s financial statements, the Audit Committee met with both management and Deloitte & Touche LLP, Navtech’s independent auditors, to review and discuss all financial statements prior to their issuance and to discuss significant accounting issues. Management advised the Committee that all financial statements were prepared in accordance with generally accepted accounting principles, and the Committee discussed the statements with both management and the independent auditors. The Committee’s review included discussion with the outside auditors of matters required to be disclosed pursuant to Statement of Auditing Standards (SAS) No. 61 (Communication With Audit Committees), as amended by SAS No. 89 (Audit Adjustments) and SAS No. 90 (Audit Committee Communications).
The Committee also discussed with Deloitte & Touche LLP matters relating to its independence, including the written disclosures and the letter delivered to the Committee as required by the Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees).
On the basis of these reviews and discussions, the Committee recommended to the Board of Directors that the audited financial statements be included in Navtech’s Annual Report on Form 10-KSB for the fiscal year ended October 31, 2006, for filing with the Securities and Exchange Commission.
Members of the Audit Committee
Michael Jakobowski - Chairman
Thomas D. Beynon
John Hunt
Meetings
The Board held nine meetings during the fiscal year ended October 31, 2006. Each of our then incumbent directors attended all meetings held during the fiscal year.
The Audit Committee held four meetings during the fiscal year ended October 31, 2006. Each of the then incumbent committee members attended all meetings held during the fiscal year.
The Corporate Governance and Nominating Committee held three meetings during the fiscal year ended October 31, 2006. Each of the then incumbent committee members attended all meetings held during the fiscal year.
The Human Resources and Compensation Committee held three meetings during the fiscal year ended October 31, 2006. Each of the then incumbent committee members attended all meetings held during the fiscal year.
Communications with the Board of Directors
Any security holder who wishes to communicate with the Board of Directors or a particular director should send the correspondence to the Board of Directors, Navtech, Inc. or the particular director, as the case may be, c/o Navtech Systems Support Inc., Suite 200, 295 Hagey Blvd., Waterloo, Ontario, Canada N2L 6R5, Attn: Secretary. Any such communication so addressed will be forwarded by the Secretary to the members or particular member of the Board.
We do not have a formal policy regarding director attendance at our Annual Meeting of Shareholders. However, all directors are encouraged to attend. One of the Board members was in attendance at last year’s Annual Meeting of Shareholders.
Family Relationships
There is no family relationship among any of our executive officers and directors.
Term of Office
Each director will hold office until the next annual meeting of shareholders or until his successor is elected and qualified.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on a review of copies of Forms 3, 4 and 5, and amendments thereto, furnished to us and written representations that no other reports were required, during the fiscal year ended October 31, 2006, all officers, directors and 10% stockholders were in compliance with Section 16(a) filing requirements, except that ABRY Mezzanine Partners LP filed its Form 3 late, Cambridge Information Group Inc. filed a Form 4 late (reporting one transaction), Alain Mallart and Finextern SA filed a Form 4 late (reporting one transaction) and John Bethanis filed a Form 5 late (reporting a correction to his Form 3 filed in July 2004).
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, our independent auditors, has served as such since the fiscal year ended October 31, 2000. It is not expected that a representative from Deloitte & Touche LLP will attend the meeting.
Principal Accountant Fees and Services
The following is a summary of the fees billed to us by Deloitte & Touche, LLP, our independent auditors, for professional services rendered for the fiscal years ended October 31, 2006 and 2005:
Fee Category | | Fiscal 2006 Fees | | | Fiscal 2005 Fees | |
| Audit Fees (1) | $ | 214,323 | | $ | 53,391 | |
| Audit-Related Fees (2) | | 26,102 | | | 8,214 | |
| Tax Fees (3) | | 19,933 | | | 49,991 | |
| All Other Fees (4) | | 430,242 | | | - | |
| Total | $ | 690,600 | | $ | 111,596 | |
| (1) | Audit Fees consist of aggregate fees billed for professional services rendered for the audit of our annual financial statements and review of the interim financial statements included in the quarterly reports of services that are normally provided by the independent auditors in connection with the statutory and regulatory filings or engagements for the fiscal years ended October 31, 2006 and October 31, 2005, respectively. |
| (2) | For assurance and related services that are reasonably related to the performance of the audit and are not reported with Audit Fees, including accounting consultations. |
| (3) | For tax compliance, advice, planning and return preparation and for services related to the submission and receipt of investment tax credits earned from Canadian Scientific Research and Experimental Development (SR&ED) qualified expenditures. |
| (4) | For services related to due diligence and regulatory filings associated with the acquisition of EAG. |
The Audit Committee is responsible for the appointment, compensation and oversight of the work of the independent auditors and approves in advance any services to be performed by the independent auditors, whether audit-related or not. The Audit Committee reviews each proposed engagement to determine whether the provision of services is compatible with maintaining the independence of the independent auditors. All of the fees shown above were pre-approved by the Audit Committee.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the our next Annual Meeting of Shareholders pursuant to the provisions of Rule 14a-8 of the Securities and Exchange Commission, promulgated under the Securities Exchange Act of 1934, must be received by our Secretary at the offices of our subsidiary, Navtech Systems Support Inc., Suite 200, 295 Hagey Blvd., Waterloo, Ontario, Canada N2L 6R5 by October 24, 2007 for inclusion in our Proxy Statement and form of proxy relating to such meeting.
The following requirements with respect to shareholder proposals and shareholder nominees to the Board of Directors are included in our By-Laws.
1. Shareholder Proposals. For a proposal to be properly brought before an annual meeting by one of our shareholders, the shareholder must have given timely notice to our Secretary. To be timely, such proposal must be received by the Secretary at the principal executive offices on a date which is not less than 60 days nor more than 90 days prior to the date which is one year from the date of the mailing of the Proxy Statement for the prior year’s annual meeting of shareholders. If during the prior year we did not hold an annual meeting, or if the date of the meeting for which a shareholder intends to submit a proposal has changed more than 30 days from the date of the meeting in the prior year, then such notice must be received a reasonable time before we mail the Proxy Statement for the current year. A shareholder's notice must set forth as to each matter the shareholder proposes to bring before the annual meeting certain information regarding the proposal, including (a) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at such meeting; (b) the name and address of such shareholder proposing such business; (c) the class and number of our shares which are beneficially owned by such shareholder; and (d) any material interest of such shareholder in such business. No business proposed by a shareholder shall be conducted at an annual meeting except in accordance with these procedures. These requirements are separate from and in addition to the requirements a shareholder must meet to have a proposal included in our Proxy Statement.
2. Shareholder Nominees. In order for persons nominated to the Board of Directors, other than those persons nominated by or at the direction of the Board of Directors, to be qualified to serve on the Board of Directors, such nomination must be made pursuant to timely notice in writing to our Secretary. To be timely, a shareholder's notice must be received at our principal executive offices not less than 60 days nor more than 90 days prior to the meeting; provided, however, that, in the event that less than 70 days' notice of the date of the meeting is given to shareholders and public disclosure of the meeting date, pursuant to a press release, is either not made or is made less than 70 days prior to the meeting date, then notice by the shareholder to be timely must be so received not later than the close of business on the tenth day following the earlier of (a) the day on which such notice of the date of the meeting was mailed to shareholders or (b) the day on which such public disclosure was made. The shareholder filing the notice of nomination must describe various matters, including such information as (a) the name, age, business and residence addresses, occupation or employment and shares held by the nominee; (b) any other information relating to such nominee required to be disclosed in a Proxy Statement; and (c) the name, address and shares held by the shareholder.
Any notice given pursuant to the foregoing requirements must be sent to our Secretary at c/o Navtech Systems Support Inc., Suite 200, 295 Hagey Blvd., Waterloo, Ontario, Canada N2L 6R5. The foregoing is only a summary of the provisions of our By-Laws that relate to shareholder proposals and shareholder nominations for director.
OTHER BUSINESS
While the accompanying Notice of Annual Meeting of Shareholders provides for the transaction of such other business as may properly come before the meeting, we have no knowledge of any matters to be presented at the meeting other than that listed as Proposal 1 in the notice. However, the enclosed proxy gives discretionary authority in the event that any other matters should be presented.
FORM 10-KSB
This Proxy Statement is accompanied by a copy of our Annual Report on Form 10-KSB for the fiscal year ended October 31, 2006 (excluding exhibits). We will furnish a copy of any exhibits upon request. We may charge a fee equal to our reasonable expenses in furnishing the exhibits.
David Strucke
Secretary
Waterloo, Ontario
February 21, 2007
