SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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Section 240.14a-12.
NEW SKY COMMUNICATIONS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NOT APPLICABLE
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
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NEW SKY COMMUNICATIONS, INC.
731 Powers Building, 16 West Main Street
Rochester, New York 14614
Notice of 2001 Annual Meeting of Stockholders
and
Proxy Statement
NEW SKY COMMUNICATIONS, INC.
731 Powers Building Rochester, New York 14614
16 West Main Street
June 20, 2001
Dear Stockholder,
You are cordially invited to attend the 2001 annual meeting of stockholders of
New Sky Communications, Inc. Our annual meeting will be held on Wednesday, July
18, 2001 at 9:00 A.M. at the Comfort Suites - Cary, 350 Ashville Avenue, Cary,
North Carolina 27511.
Stockholders will be asked to approve a plan to reverse split the stock of the
Company 1:200.
Whether or not you presently plan to attend the meeting, please indicate your
vote by using the enclosed proxy card. You may withdraw your proxy if you attend
the meeting and wish to vote in person.
We urge you to vote for the election of the reverse stock split plan. Any votes
not cast will be deemed a vote in favor of that proposal by management set forth
herein.
/s/CARL R. REYNOLDS /s/CARL R. REYNOLDS
- -------------------- -------------------
CARL R. REYNOLDS CARL R. REYNOLDS
Chairman of the Board President and Chief Executive Officer
YOUR VOTE IS IMPORTANT
It is important that your shares be represented and voted at the Annual Meeting
of Stockholders. Stockholders whose shares are held in registered form have a
choice of using a traditional proxy card or voting by telephone. Stockholders
whose shares are held in the name of a broker, bank or other holder of record
must vote using the form of proxy sent by the nominee. Check your proxy card or
the information forwarded by your broker, bank or other holder of record to see
which options are available to you. Any stockholder present at the meeting may
withdraw his or her proxy and vote personally on each matter brought before the
meeting.
NEW SKY COMMUNICATIONS, INC.
731 Powers Building Rochester, New York 14614
16 West Main Street
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TIME Wednesday, July 18, 2001 at 9:00 A.M.
PLACE Comfort Suites - Cary, 350 Ashville Avenue, Cary, North Carolina 27511
ITEMS OF BUSINESS (1) To reverse split the common stock of New
Sky Communications, Inc. 1:200 and amend the Certificate
of Incorporation to implement same. (2) To transact such
other business as may properly come before the meeting
and any adjournments thereof.
RECORD Holders of the Common Stock of record June 15, 2001 are entitled to
DATE vote at the meeting.
It is important that your shares be represented and voted
at the meeting. You can vote your shares by proxy by:
Mark, sign, date and promptly return the enclosed proxy
card in the postage-paid envelope furnished for that
purpose. Any proxy may be revoked in the manner described
in the accompanying Proxy Statement at any time
VOTING prior to its exercise at the Annual Meeting of
Stockholders. Any stockholder present at the meeting may
withdraw his or her proxy and vote personally on each
matter brought before the meeting. Any shares not voted
in person or by proxy at the meeting will be deemed as
votes for the proposals set forth herein by management.
/s/CARL R. REYNOLDS
-------------------
June 20, 2001 CARL R. REYNOLDS
Corporate President
TABLE OF CONTENTS
PAGE
----
INTRODUCTION ............................................................... 1
VOTING RIGHTS .............................................................. 1
PRINCIPAL BENEFICIAL OWNERS OF SHARES ...................................... 2
PROPOSAL TO APPROVE THE 1:200 REVERSE SPLIT OF THE COMMON STOCK ............ 2
STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS ........................ 2
Section 16(a) Beneficial Ownership Reporting Compliance ............ 3
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS ........................... 3
Executive Compensation ............................................. 3
Stock Option Grants in 2000 ........................................ 3
Stock Options and Stock Appreciation Rights Exercised in 2000 and
Year-End Values ............................................ 3
Pension Plan ....................................................... 3
Supplemental Benefit Plans ......................................... 4
Directors' Fees .................................................... 4
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS ......................... 4
BOARD OF DIRECTORS, COMMITTEES OF THE BOARD AND ATTENDANCE ................. 5
OTHER MATTERS .............................................................. 5
INDEPENDENT PUBLIC ACCOUNTANTS ............................................. 5
SOLICITATION COSTS ......................................................... 5
STOCKHOLDER PROPOSALS ...................................................... 5
NEW SKY COMMUNICATIONS, INC.
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of New Sky Communications, Inc. of proxies in the
accompanying form for use at the 2001 Annual Meeting of Stockholders or any
adjournment or adjournments thereof. The proxies designated on the form, or any
one of them, may exercise all the powers of said proxies and each shall have the
power to appoint a substitute to act in his or her place.
The Annual Meeting of Stockholders of New Sky Communications, Inc. will be held
at Comfort Suites - Cary, 350 Ashville Avenue, Cary, North Carolina 27511 on
Wednesday, July 18, 2001 at 9:00 A.M., local time.
New Sky Communications, Inc.`s mailing address is 731 Powers Building, 16 West
Main Street, Rochester, New York 14614, and its telephone number is (716)
454-5490.
This Proxy Statement and the accompanying form of proxy are first being sent to
stockholders on or about June 30, 2001. A copy of New Sky Communication, Inc.`s
annual SEC filing on Form 10-K for 2000, including financial statements, is
available electronically at HTTP://WWW.SEC.GOV, or upon request from the Company
at no charge.
VOTING RIGHTS
Stockholders of record at 5:00 P.M., Eastern Standard Time, on June 15, 2001 are
entitled to vote at the Annual Meeting. At that time, New Sky Communications,
Inc. had outstanding 193,736,923 shares of common stock, $0.0001 par value per
share ("Common Stock"). Each share of Common Stock is entitled to one vote.
Shares may not be voted at the meeting unless the owner is present or
represented by proxy. A stockholder can be represented through the return of a
physical proxy. The method by which you vote will in no way limit your right to
vote at the Annual Meeting if you later decide to attend in person. A
stockholder giving a proxy may revoke it at any time before it is exercised by
giving written notice of such revocation or by delivering a later dated proxy,
in either case to Carl R. Reynolds, Corporate President, at the address set
forth above, or by the vote of the stockholder in person at the Annual Meeting.
Proxies will be voted in accordance with the stockholder's direction, if any.
Unless otherwise directed, proxies will be voted in favor of the approval of the
1:200 reverse stock split and requisite amendment to the Certificate of
Incorporation. Any shares not present in person, or by proxy, will be deemed
shares present for the purposes of determining a quorum for the transaction of
business and deemed votes in favor of the reverse split proposal.
The vote of a majority of the votes cast, or deemed cast, at the meeting is
required to approve the 1:200 reverse stock split plan and requisite amendment
to the Certificate of Incorporation, assuming a quorum is present, deemed
present or represented at the meeting and that more than 50 percent of the
outstanding shares of the Common Stock are voted, or deemed voted on the
proposal.
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PRINCIPAL BENEFICIAL OWNERS OF SHARES
The following table sets forth certain information with respect to all persons
or groups known by New Sky Communications, Inc. to be the beneficial owners of
more than 5% of its outstanding Common Stock as of May 1, 2001.
NAME AND ADDRESS OF BENEFICIAL OWNER NO. OF SHARES PERCENT OF CLASS
- ------------------------------------- ------------- ----------------
None 0 0%
PROPOSAL TO APPROVE THE REVERSE SPLIT OF COMMON STOCK 1:200
The Board of Directors has considered various options for raising the financing
necessary to finance its next feature film, "THE GODMOTHER," and provide
financing for developing the Web site Movieplace.com. Each project is more fully
explained in Item 1-Business section of the 2000 Form 10-K annual filing with
the SEC. The Board has concluded that a secondary offering of common stock of
the Company is the only currently viable course of action to raise this
financing. The Board has been advised that a secondary offering is feasible, but
not at the stock's current price of approximately $.01. It is necessary to raise
the stock price above at least $1.00 per share to have a secondary offering of
stock succeed. Therefore, Management is recommending a 1 for 200 reverse split
of the common stock of the Company to raise its market price to approximately
$2.00 per share initially. This will require an amendment to the Company's
Certificate of Incorporation, raising the par value of the stock to $.02 per
share.
It is the opinion of management for the Company that a reverse split of the
stock of the Company will have no Federal income tax effect on the Company or
the shareholders, but each shareholder should consult with his or her own
personal tax advisor for the effect of the proposal on such shareholder.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE REVERSE STOCK
SPLIT.
STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
Direct and indirect ownership of Common Stock by each of the executive officers
who are named in the Summary Compensation Table (the "Named Executive
Officers"), by the directors and by all executive officers as a group is set
forth in the following table as of May 1, 2001, together with the percentage of
total shares outstanding represented by such ownership. (For purposes of this
table, beneficial ownership has been determined in accordance with the
provisions of Rule 13d-3 under the Exchange Act, under which, in general, a
person is deemed to be the beneficial owner of a security if he or she has or
2
shares the power to vote or to direct the voting of the security or the power to
dispose or to direct the disposition of the security, or if he or she has the
right to acquire the beneficial ownership of the security within 60 days.)
NAME OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
- ------------------------ ---------------- ----------------
Carl R. Reynolds 8,000,000 4.1%
All Directors and Officers
as a group (1) 8,000,000 4.1%
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Exchange Act, New Sky Communications, Inc.'s
directors and officers are required to report their ownership of the Common
Stock and options and any changes in that ownership to the SEC and the New York
Stock Exchange. New Sky Communications, Inc. believes that these filing
requirements were satisfied by its director and officer. In making the foregoing
statement, New Sky Communications, Inc. has relied on copies of the reporting
forms received by it or on the written representations from such reporting
persons that no forms were required to be filed under the applicable rules of
the SEC.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The Company employs only one individual, its President, Chief Executive Officer
and sole Director. During 2000, Mr. Reynolds received no cash compensation nor
any pension, profit sharing or stock options or stock appreciation rights. He
was credited with $24,000.00 of deferred salary, which as of the end of 2000
totaled $147,000.00. The Company has no Compensation nor Audit committees. The
following table summarizes the compensation paid to all Executive Officers of
the Company:
Annual Non-Cash Long Term
Name Cash Compensation Compensation
- --------------------------------------------------------------------------------
Carl R. Reynolds
President, Director $ 0 $ 0 None
STOCK OPTION GRANTS IN 2000
None
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS EXERCISED IN 2000
AND YEAR-END VALUES
None
PENSION PLAN
None
3
SUPPLEMENTAL BENEFIT PLANS
None
DIRECTORS' FEES
None
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS
During 1999, the Company acquired a forty percent (40%) interest in the business
called The Movie Place, which owns and operates the Internet site
"http://www.movieplace.com." The interest was purchased for $25,000.00, which
The Movie Place will expend to enhance and market the Web site and for working
capital. The Company procured the funds for the investment by a loan on a
promissory note from its Chairman and President, Carl R. Reynolds. The
Promissory Note is in the amount of $25,000.00, payable on demand and bears
interest at the rate of ten percent (10%) per annum. A copy of the Promissory
Note and the Agreement with The Movie Place are incorporated here in by
reference from the Form 10-K of the Company for December 31, 1999annexed hereto
as exhibits. Mr. Reynolds and Charles M. LaLoggia, a former President of the
Company, and another investor, have lent an additional $75,000.00 to
Movieplace.com, Inc. for working capital for a twenty-seven percent (27%) equity
interest in Movieplace.com, Inc. from the owners of Movieplace stock, not
including the Company. During 2000, Mr. Reynolds loaned an additional $25,000.00
to Movieplace.com for working capital. The Company continues to own forty
percent (40%) of Movieplace.com, Inc. common stock. Mr. Reynolds has also been
elected Chairman of the Board of Movieplace.com, Inc.
In 1997, the Company entered into a joint venture agreement with Syracuse
Productions, LLC to Co-Produce a feature film entitled "FREAK TALKS ABOUT SEX."
The Company is a special limited partner in the financing limited partnership
for the film and is entitled to one-third of the profits from the sale of the
film after the investors receive their investment plus a twenty percent (20%)
return on their investment. The Joint Venture Agreement has been previously
filed as an Exhibit in the 1997 Form10K for the Company. To procure the
Company's position as Co-Producer of the film, it issued 20,000,000 unregistered
common shares of stock in the Company, to Charles M. LaLoggia on April 13, 1997
in exchange for his rights as Executive Producer in the film. The Company also
issued 10,000,000 unregistered common shares of the Company on March 13, 1997 to
Carl R. Reynolds, the President and Chairman, to compensate him for failing to
receive regular compensation for over three years.
Of the Company's total liabilities, $202,609 is due and owing to its President,
Carl R. Reynolds, for loans to the Company, expenses paid by him on behalf of
the Company and accrued payroll for over six years.
4
BOARD OF DIRECTORS, COMMITTEES OF THE BOARD AND ATTENDANCE
The Company has no Committees and only one Director. He attended all meetings
held during 2000.
OTHER MATTERS
The Board of Directors of New Sky Communications, Inc. is not aware that any
matters not referred to in the form of proxy will be presented for action at the
meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed proxy to vote the shares
represented thereby in accordance with their best judgment.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Michael Cronin, certified public accountant,
as New Sky Communications, Inc.`s principal independent public accountants for
the year 2001, a capacity in which he has served since 1986. AUDIT FEES. Michael
Cronin billed a total of $1,000.00 for services rendered for the audit of New
Sky Communications, Inc.'s annual financial statements as of and for the year
ended December 31, 2000.
ALL OTHER FEES. No fees were billed and no services were provided by Michael
Cronin during 2000 for any other purpose.
SOLICITATION COSTS
The cost of soliciting proxies in the accompanying form will be borne by New Sky
Communications, Inc. The solicitation is being made by mail, and may also be
made by telephone or in person. Banks, brokerage firms and other custodians,
nominees and fiduciaries will be reimbursed by New Sky Communications, Inc. for
expenses incurred in sending proxy material to beneficial owners of the Common
Stock.
STOCKHOLDER PROPOSALS
Under New Sky Communications, Inc.`s By-laws, no business may be brought before
an annual meeting of stockholders unless it is specified in the notice of the
meeting or is otherwise brought before the meeting by the Board of Directors or
by a stockholder entitled to vote who has delivered notice to New Sky
Communications, Inc. (containing information specified in the By-laws) not less
than 120 days prior to the anniversary of the preceding year's annual meeting of
stockholders. These requirements are separate from and in addition to the SEC's
requirements that a stockholder must meet in order to have a stockholder
proposal included in New Sky Communications, Inc.`s proxy statement. A
stockholder wishing to submit a proposal for consideration at the 2002 Annual
Meeting of Stockholders, either under SEC Rule 14a-8 or otherwise, should do so
no later than December 15, 2001.
June 20, 2001
5
PROXY
The undersigned, a shareholder in NEW SKY COMMUNICATIONS, INC., does hereby
appoint Carl R. Reynolds as attorney-in-fact and proxy to vote my (our) shares
and cast the following vote on the proposal submitted to shareholders at the
2001 Annual Shareholders' meeting to be held on Wednesday, July 18, 2001 at 9:00
A.M. at Comfort Suites - Cary, 350 Ashville Avenue, Cary, North Carolina 27511.
1:200 Reverse Stock Split Plan -
( ) For ( ) Against ( ) Withheld
Dated:________________ ___________________________________
___________________________________
Shareholder(s) (All if jointly held)
Shares Owned on Record Date:
___________________________________ ___________________________________
Print Name(s)
PLEASE TEAR OFF THIS PROXY, INDICATE YOUR VOTE, SHARES OWNED, SIGN AND DATE THE
PROXY AND RETURN TO THE COMPANY AT 731 POWERS BUILDING, 16 WEST MAIN STREET,
ROCHESTER, NEW YORK 14614.