SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only
(as permitted by Rule 14a- 6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
DIAL-THRU INTERNATIONAL CORPORATION
(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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[LOGO]
April 2, 2001
Dear Dial-Thru International Stockholder:
I am pleased to invite you to Dial-Thru International's Annual Meeting of
Stockholders. The meeting will be held at 10:00 a.m. on Monday, May 21, 2001
at 700 South Flower, Suite 2950, Los Angeles, California 90017.
At the meeting, you and the other stockholders will be asked to (1) elect
five directors to the Dial-Thru International Board; and (2) ratify the
appointment of King Griffin & Adamson, P.C. as the Company's independent
auditors for the current fiscal year. You will also have the opportunity to
hear what has happened in our business in the past year and to ask
questions. You will find other detailed information about Dial-Thru
International and its operations, including its audited financial
statements, in the enclosed Annual Report.
We hope you can join us on May 21st. Whether or not you can attend,
please read the enclosed Proxy Statement. When you have done so, please mark
your votes on the enclosed proxy, sign and date the proxy, and return it to
us in the enclosed envelope. Your vote is important, so please return your
proxy promptly.
Yours truly,
/s/ Roger D. Bryant
_____________________________________
Roger D. Bryant
Chairman and Chief Executive Officer
DIAL-THRU INTERNATIONAL CORPORATION
700 SOUTH FLOWER, SUITE 2950
LOS ANGELES, CALIFORNIA 90017
----------------
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 2001
----------------
To the Stockholders of Dial-Thru International Corporation:
NOTICE IS HEREBY given that the 2001 Annual Meeting of Stockholders (the
"Meeting") of Dial-Thru International Corporation (the "Company") will be
held at 700 South Flower, Suite 2950, Los Angeles, California 90017 on
Monday, May 21, 2001 at 10:00 a.m., for the following purposes:
1. To elect 5 Directors to serve until the 2002 Annual Meeting of
Stockholders and until their successors are duly elected and qualified;
2. To consider and act upon a proposal to ratify the selection of King,
Griffin & Adamson P.C., to serve as independent auditors for its current
fiscal year; and
3. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on March 30, 2001
as the record date for the determination of Stockholders entitled to notice
of and to vote at the Meeting or any adjournments thereof.
A list of stockholders of the Company entitled to notice of and to vote
at the Meeting will be available for examination at the Meeting and during
ordinary business hours at the principal offices of the Company at the
address set forth above for ten days prior the Meeting.
You are cordially invited to attend the Meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING REGARDLESS
OF THE NUMBER OF SHARES YOU HOLD. YOU ARE INVITED TO ATTEND THE MEETING IN
PERSON, BUT WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. IF YOU DO ATTEND
THE MEETING, YOU MAY, IF YOU PREFER, REVOKE YOUR PROXY AND VOTE YOUR SHARES
IN PERSON.
By Order of the Board of Directors,
/s/ John Jenkins
_____________________________________
John Jenkins
SECRETARY
April 2, 2001
DIAL-THRU INTERNATIONAL CORPORATION
700 SOUTH FLOWER, SUITE 2950
LOS ANGELES, CALIFORNIA 90017
----------------
PROXY STATEMENT
2001 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 2001
----------------
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement and the accompanying proxy are solicited on behalf
of the Board of Directors of Dial-Thru International Corporation, formerly
known as ARDIS Telecom & Technologies, Inc., successor by merger to Canmax
Inc. (the "Company"). The proxies will be voted at the 2001 Annual Meeting
of Stockholders (the "Annual Meeting") to be held on May 21, 2001, at the
time and place and for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders and at any adjournment(s) of the Annual
Meeting. This Proxy Statement, the accompanying proxy and the Company's
Annual Report on Form 10-K for the year ended October 31, 2000, are first
being sent to stockholders of the Company on or about April 2, 2001.
All properly completed proxies received prior to the Annual Meeting and
not revoked will be voted in accordance with your instructions. IF NO SUCH
INSTRUCTIONS ARE MADE, THEN PROXIES WILL BE VOTED:
* FOR THE ELECTION OF THE NOMINEES UNDER THE CAPTION "ELECTION OF
DIRECTORS;" AND
* FOR THE RATIFICATION OF THE COMPANY'S SELECTION OF KING GRIFFIN &
ADAMSON P.C. TO SERVE AS THE COMPANY'S INDEPENDENT AUDITORS DURING
THE CURRENT FISCAL YEAR.
If any other matters come before the Annual Meeting, the persons named as
proxies will vote upon such matters according to their judgment.
The Company encourages the personal attendance of its stockholders at the
Annual Meeting. The execution of the accompanying proxy will not affect a
stockholder's right to attend the Annual Meeting and to vote in person.
Proxies may be revoked if you:
- Deliver a signed, written revocation letter, dated any time before the
proxy is voted, to Mr. John Jenkins, Secretary, Dial-Thru International
Corporation, at the Company's principal executive offices, 700 South
Flower, Suite 2950, Los Angeles, California; or
- Sign and deliver a proxy, dated later than any previously delivered
proxy to the above address; or
- Attend the meeting and vote in person.
Attending the Annual Meeting alone will not revoke your proxy. A
revocation letter or a later-dated proxy will not be effective until
received by the Company at or prior to the Annual Meeting.
In addition to the solicitation of proxies by use of the mail, officers,
directors and regular employees of the Company may solicit the return of
proxies by personal interview, mail, telephone, facsimile and/or through the
Internet. These persons will not be additionally compensated, but will be
reimbursed for out-of-pocket expenses. The Company will also request
brokerage houses and other custodians, nominees and fiduciaries to forward
solicitation material to the beneficial owners of shares. The Company will
reimburse such persons and the transfer agent for their reasonable out-of-
pocket expenses in forwarding such materials. The Company will bear the cost
of the solicitation.
The Company's Annual Report on Form 10-K covering the Company's fiscal
year ended October 31, 2000 (the "Annual Report"), including audited
financial statements, is enclosed herewith. The Annual Report does not form
any part of the materials for the solicitation of proxies.
VOTING SECURITIES AND QUORUM
Only stockholders of record at the close of business on March 30, 2001
will be entitled to notice of and to vote at the Annual Meeting. On March
30, 2001 the Company had issued and outstanding 10,034,425 shares of its
common stock, $.001 par value per share (the "Common Stock"), which is the
only class of its capital stock outstanding. Each share of Common Stock is
entitled to one vote on each matter presented to the stockholders. The
presence, in person or by proxy, of the holders of a majority of the issued
and outstanding shares of Common Stock is necessary to constitute a quorum
at the Annual Meeting.
Abstention and broker non-votes are counted for the purposes of
determining the presence or absence of a quorum for the transaction of
business. Abstentions are counted in the tabulations of votes cast on
proposals presented to the stockholders, while broker non-votes are not
counted for purposes of determining whether a proposal has been approved. A
broker non-vote occurs if a broker or other nominee does not have
discretionary authority and has not received instructions with respect to a
particular item. Assuming the presence of a quorum, the affirmative vote of
the holders on the record date of a plurality of the shares of Common Stock
outstanding, represented in person or by proxy at the Annual Meeting, is
required to elect directors for the Company. Stockholders may not cumulate
their votes in the election of directors. All matters other than the
election of directors submitted for a vote at the Annual Meeting will be
decided by a majority of the votes cast on the matter, provided a quorum
exists, except as otherwise provided by law or in the Company's Certificate
of Incorporation or Bylaws. Stockholders who fail to return a proxy or
attend the Annual Meeting will not count towards determining any required
plurality, majority or quorum.
ITEM 1.
ELECTION OF DIRECTORS AND MANAGEMENT INFORMATION
Five directors are to be elected at the Meeting, to serve until the
Company's next annual meeting of stockholders and until their respective
successors are elected and qualified, or until their earlier resignation or
removal. Each of the nominees listed below currently serves as a director of
the Company, and each of the nominees was elected to the Board of Directors
at the Company's 2000 Annual Meeting of Stockholders. Unless authority to
vote for one or more nominees is withheld, the enclosed proxy will be voted
"FOR" the election of all of the nominees listed below. Although the Board
of Directors does not contemplate that any of the nominees will be unable to
serve, if such a situation arises prior to the Meeting, the persons named in
the enclosed proxy will vote for the election of such other person(s) as may
be nominated by the Board of Directors.
The following table sets forth certain information regarding the
executive officers and directors of the Company who are expected to be
directors and executive officers of the Company.
Name Age Position with the Company
---- --- -------------------------
Roger D. Bryant....... 58 Chairman, Chief Executive Officer and Director
John Jenkins.......... 39 President, Chief Operating Officer, Interim
Chief Financial Officer, Secretary and Director
Lawrence Vierra....... 55 Executive Vice President and Director
Robert M. Fidler...... 62 Director
Nick DeMare........... 46 Director
ROGER D. BRYANT has served as the Chief Executive Officer and a director
of the Company since November 15, 1994. Since December 15, 1999, Mr. Bryant
has served as the Chairman of the Company. From November 15, 1994 until
December 15, 1999, Mr. Bryant served as President of the Company. Prior to
joining the Company, Mr. Bryant served as President of Network Data
Corporation, a private corporation which specialized in developing software
for the convenience store and retail petroleum industries, and as President
of Wayne Division, USA, a division of Dresser Industries Inc., a
manufacturer of fuel dispensing equipment. Mr. Bryant currently serves as a
director of Field Point Petroleum Corporation. Mr. Bryant has extensive
knowledge and experience in the software development, retail petroleum and
convenience store industries. Mr. Bryant holds a degree in electrical
engineering.
JOHN JENKINS has served as a director and as the President of the Company
since December 15, 1999. Mr. Jenkins has also served as the President of
Dial- Thru.com, Inc. a subsidiary of the Company, since November 2, 1999. In
May of 1997, Mr. Jenkins founded Dial-Thru International Corporation, a
California corporation now known as DTI LIQ-CO, Inc., and served as its
President and Chief Executive Officer until joining the Company on November
2, 1999. Prior to 1997, Mr. Jenkins served as the President and Chief
Financial Officer for Golden Line Technology, a French telecommunications
company. Prior to entering the telecommunications industry, Mr. Jenkins
owned and operated several software, technology and real estate companies.
Mr. Jenkins holds degrees in physics and business/economics.
LAWRENCE VIERRA has served as an Executive Vice President and a Director
of the Company since January 14, 2000. From 1995 through 1999, Mr. Vierra
served as the Executive Vice President of RSL COM U.S.A., Inc., an
international telecommunications company, where Mr. Vierra was primarily
responsible for international sales. From 1987 through 1995, Mr. Vierra was
a Vice President with GTE Corporation, a telecommunications company, with
primary responsibilities for sales and marketing. Prior to 1987, Mr. Vierra
held senior executive positions in international sales, marketing and
business development with various companies such as ITC, Sprint Corporation
and Charles Schwab. Mr. Vierra has also served on the board of directors and
executive committees of various telecommunications companies. Mr. Vierra has
extensive knowledge and experience in the international sales and marketing
of telecommunications products and services. Mr. Vierra holds degrees in
marketing and business administration.
ROBERT M. FIDLER has served as a director of the Company since November
1994. Mr. Fidler joined Atlantic Richfield Company ("ARCO") in 1960, was a
member of ARCO's executive management team from 1976 to 1994 and was ARCO's
manager of New Marketing Programs from 1985 until his retirement in 1994.
Mr. Fidler has extensive knowledge and experience in managing retail
petroleum operations.
NICK DEMARE has served as a director of the Company since January 1991.
Since May, 1991, Mr. DeMare has been the President and Chief Financial
Officer of Chase Management Ltd., where his overall responsibility includes
providing a broad range of administrative, management and financial services
to private and public companies with varied interests in mineral exploration
and development, precious and base metals production, oil and gas, venture
capital and computer software. Mr. DeMare has served and continues to serve
on the boards of a number of Canadian public companies. Mr. DeMare also
serves and on the board of directors of North Lily Mining Co., a mining
company, and LEK International, Inc., an oil and gas company. Mr. DeMare is
a Chartered Accountant (Canada).
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held four meetings during the fiscal year ended
October 31, 2000. The Board of Directors has two standing committees: an
Audit Committee and a Compensation Committee. There is no standing
nominating committee. Each of the directors attended at least 75% of the
meetings of the Board of Directors and any committee on which such director
served.
COMMITTEES OF THE BOARD OF DIRECTORS
From November 1, 1999 to December 1, 1999, the Audit Committee consisted
of Nick DeMare and W. Thomas Rinehart. Robert M. Fidler succeeded W. Thomas
Rinehart as a member of the Audit Committee following Mr. Rinehart's
resignation from the Board of Directors on December 1, 1999. Scott D. Cook
also served as a member of the Audit Committee from March 21, 2000 until his
resignation as a Director effective October 31, 2000.
The Audit Committee makes recommendations to the Board of Directors or
management concerning the engagement of the Company's independent public
accountants and matters relating to the Company's financial statements, the
Company's accounting principles and its system of internal accounting
controls. The Audit Committee also reports its recommendations to the Board
of Directors as to the approval of the financial statements of the Company.
The Audit Committee held four meetings during the fiscal year ended October
31, 2000.
From November 1, 1999 to December 1, 1999, the Compensation Committee
consisted of Robert M. Fidler and W. Thomas Rinehart. Nick DeMare succeeded
W. Thomas Rinehart as a member of the Company's Compensation Committee
following Mr. Rinehart's resignation from the Company's Board of Directors
on December 1, 1999. The Compensation Committee is responsible for
considering and making recommendations to the Board of Directors regarding
executive compensation and is also responsible for administration of the
Company's stock option and executive incentive compensation plans. The
Compensation Committee held one meeting during the fiscal year ended October
31, 2000.
COMPENSATION OF DIRECTORS
Each director who is not an officer of the Company receives a fee of
$1,500 for each Board meeting attended. Directors are not compensated for
attending committee meetings. Further, all directors participate in the
Company's Stock Option Plan and are awarded non-qualified stock options for
5,000 shares of Common Stock annually for service on the Board of Directors.
As of February 1, 2001 such shares have not yet been issued.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
The following table sets forth certain information as of February 1,
2001, concerning those persons known to the Company, based on information
obtained from such persons, the Company's records and schedules required to
be filed with the Securities and Exchange Commission and delivered to the
Company, with respect to the beneficial ownership of the Company's Common
Stock by (i) each stockholder known by the Company to own beneficially 5% or
more of such outstanding Common Stock, (ii) each current director of the
Company and each nominee for election as a director, (iii) each Named
Executive Officer and (iv) all executive officers and directors of the
Company as a group. Except as otherwise indicated below, each of the
entities or persons named in the table has sole voting and investment power
with respect to all shares of Common Stock beneficially owned. Effect has
been given to shares reserved for issuance under outstanding stock options
and warrants where indicated.
Amount and
Nature of
Beneficial Percent of
Name and Address of Beneficial Owner Ownership Class(1)
------------------------------------ ---------- ----------
Dodge Jones Foundation......................... 1,000,000 9.97%
400 Pine Street, Suite 900
Abilene, Texas 79601
Joseph E. Canon................................ 1,000,000(2) 9.97%
Dodge Jones Foundation
P.O. Box 176
Abilene, Texas 79601
DTI LIQ-CO, Inc................................ 1,000,000(3) 9.97%
700 South Flower, Suite 2950
Los Angeles, CA 90017
John Jenkins................................... 1,000,000(3)(4) 9.97%
700 South Flower, Suite 2950
Los Angeles, CA 90017
Roger D. Bryant(5)............................. 638,000(6) 6.36%
Lawrence Vierra................................ 200,000(7) 1.99%
2353 Dolphin Court
Henderson, NV 89014
Nick DeMare.................................... 51,880(8) *
Chase Management
1090 West Georgia Street, Suite 1305
Vancouver, BC V6E 3V7
Robert M. Fidler............................... 29,000(9) *
987 Laguna Road
Pasadena, California 91105
Scott D. Cook.................................. 237,000(10) 2.36%
Founders Equity Group, Inc.
987 Laguna Road
Pasadena, California 91105
Founders Equity Group, Inc. ................... 350,000(11) 3.49%
2602 McKinney Ave., Suite 220
Dallas, Texas 75204
Founders Partners VI, LLC. .................... 400,000(12) 3.98%
2602 McKinney Ave., Suite 220
Dallas, Texas 75204
All Executive Officers and Directors as a group
(5 persons)................................... 1,913,880 19.07%
--------
* Less than 1.0%
(1) Based upon 10,034,425 shares of Common Stock outstanding as of January
23, 2001.
(2) Includes 1,000,000 shares held by Dodge Jones Foundation, of which Mr.
Canon serves as the Executive Director. As such, Mr. Canon exercises
voting power over all such shares.
(3) Does not include an additional 1,000,000 shares that may be issued to
DTI LIQ-CO, Inc. pursuant to the terms of the Asset Purchase Agreement
dated November 2, 1999 between John Jenkins, DTI LIQ-CO, Inc.
(formerly known as Dial-Thru International Corporation, a California
corporation), Dial-Thru.com, Inc. (formerly known as Dial-Thru
International Corporation, a Delaware corporation) and Dial-Thru
International Corporation (formerly known as ARDIS Telecom &
Technologies, Inc.) upon the achievement of specified earnings
and revenue goals.
(4) Includes 1,000,000 shares held by DTI LIQ-CO, Inc., a California
corporation that is in the process or liquidating. Mr. Jenkins is
the sole shareholder, director and executive officer of such entity
and exercises voting and investment power over all of such shares.
(5) The business address for the Company's executives is 700 South Flower,
Suite 2950, Los Angeles, California 90017.
(6) Includes 265,000 shares of Common Stock which may be acquired through
the exercise of stock options which are exercisable within 60 days of
January 23, 2001 ("Vested Options") and 250,000 shares subject to
presently exercisable warrants.
(7) Includes 200,000 shares subject to presently exercisable warrants.
(8) Includes 41,600 Vested Options.
(9) Includes 25,000 Vested Options.
(10) Excludes shares beneficially owned by Founders Equity Group, Inc. and
Founders Partners VI, LLC. Mr. Cook, as a controlling person of those
entities, disclaims ownership of those shares.
(11) Includes 300,000 shares subject to presently exercisable warrants.
Founders Equity Group, Inc. disclaims shares owned by Mr. Cook, its
CEO, and Founders Partners VI, LLC. Founders Equity Group, Inc. is
the Manger of Founders Partners VI, LLC.
(12) Founders Partners VI, LLC disclaims shares owned by Mr. Scott and
Founders Equity Group, Inc.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Scott D. Cook is the Chairman and a co-founder of Founders Equity Group,
Inc. Mr. Cook was elected as a director of the Company on March 21, 2000 and
resigned from such office on October 31, 2000. On October 30, 1997, Founders
Equity Group, Inc. advanced the Company $100,000. The advance was unsecured
and had an interest rate of 12%. On November 6, 1997, the Company repaid
principal and interest of $100,230, which fully satisfied its obligation
with regard to such advance.
On October 30, 1997, Founders advanced the Company $100,000. The advance
was unsecured and had an interest rate of 12%. On November 6, 1997, the
Company repaid principal and interest of $100,230, which fully satisfied its
obligation with regard to such advance.
On December 15, 1997, the Company executed a convertible loan agreement
(the "Original Agreement") with Founders, which held beneficial ownership of
in excess of 5% of the Company's securities at the time, providing for
financing of up to $500,000 at an interest rate of 10% per annum. Advances
under the Original Agreement were secured by a lien on all of the Company's
assets. Indebtedness outstanding under the Original Agreement was
convertible, at the option of Founders, into shares of Common Stock at a
conversion price of $1.25 per share, subject to adjustment for certain
events, and was redeemable at the option of the Company at 110% of par. The
closing price for the Common Stock onDecember, 1997 was $1.25.
On February 5, 1998, Founders and the Company entered into an agreement
pursuant to which Founders agreed to provide financial advisory and
consulting services to the Company. Founders was publicly known as a
significant shareholder and financial supporter of the Company and was
approached by agents representing parties interested in acquiring the
Company's software division to determine whether the Company would be
interested in pursuing such a transaction. The Company agreed to retain
Founders to assist it in evaluating the proposed offer and in negotiating
any agreements that might result therefrom. Under the terms of the
agreement, the Company agreed to pay to Founders a fee equal to 3% of the
value of the consideration received in any sale or merger of any division or
subsidiary of the Company. Subsequently, the Company reestablished
discussions with a party that had previously expressed an interest in
acquiring the Company's software division, and Founders provided advice and
counseling during the negotiation of the sale of the Company's software
division. As a result of this agreement, Founders received $120,000
calculated based upon the initial $4.0 million received upon the sale of the
Company's software division and waived its right to receive any additional
fees on the contingent payments from that sale of up to $3.625 million.
However, Founders did not deliver any formal advisory or fairness opinion to
the Company. The fee for Founders services was determined by arms-length
negotiation; however, the Company did not solicit other advisors to provide
said services and therefor the Company did not determine whether the fees
were comparable to that which would have been obtainable from disinterested
third parties.
On February 11, 1998, the Company and Founders executed a loan commitment
letter (the "Loan Commitment") which provided for a multiple advance loan of
up to $2 million upon terms similar to the Original Agreement; however,
indebtedness outstanding under the Loan Commitment was convertible into
shares of Common Stock at a conversion price equal to the average closing
prices of the Common Stock over the five-day trading period immediately
preceding the date of each advance. As consideration for the Loan
Commitment, the Company paid a commitment fee of $10,000. On February 24,
1998, Founders advanced $150,000 under the Loan Commitment which was
convertible into shares of Common Stock at a conversion price equal to
$1.025.
As of March 31, 1998, Founders (and certain of its affiliates) entered
into the First Restated Loan Agreement (the "Loan Agreement") which
consolidated all rights and obligations of the Company to Founders under the
Original Agreement and the Loan Commitment. Amounts advanced under the Loan
Agreement bear interest at the rate of 12% per annum, are secured by a lien
on all of the Company's assets and are convertible into shares of Common
Stock, at the option of Founders, at $.80 per share. The closing price of
the Common Stock on March 30, 1998 was $0.75. On August 25, 1998, Founders
agreed to release its lien on all of the Company's assets upon the
consummation of the proposed sale of its software division. As consideration
for the release, the Company agreed, upon the consummation of the proposed
sale of its software business, to repay $1.0 million of the $1.5 million
currently outstanding under the Loan Agreement, and to allow Founders to
convert the remaining $500,000 plus all accrued but unpaid interest
outstanding under the Loan Agreement into shares of Common Stock at a
conversion price of $.50 per share. The closing price of Common Stock on
August 24, 1998 was $.593. The Company used 1,000,000 from the sale of its
software business to pay down the indebtedness to Founders.
On December 11, 1998, the Company and Founders executed Amendment No. 1
to the Loan Agreement, pursuant to which the Company agreed to defer
Founders' conversion of the remaining indebtedness outstanding under the
Loan Agreement in exchange for (a) Founders' waiver of any registration
obligation under the Registration Rights Agreement dated May 1, 1997 or
under the Loan Agreement until February 1, 1999 or the Company's earlier
delivery of a conversion notice, (b) the adjustment of the conversion price
for the remaining convertible indebtedness outstanding under the Loan
Agreement ($500,000) from $.50 per share to the greater of $.50 per share or
75% of the average closing price of the Common Stock over the ten trading
days preceding the delivery of a conversion notice, and (c) Founders'
agreement to convert the remaining outstanding principal amount under the
Loan Agreement ($500,000) upon written notice from the Company at the
adjusted conversion price described above. Further, the amendment to the
Loan Agreement reduced the interest rate payable on the outstanding
principal amount under the Loan Agreement from 12% to 9% per annum. The
amendment also terminated any additional funding obligations of Founders
under the Loan Agreement. On May 4, 1999, the Company repaid the balance of
the amounts outstanding ($500,000) under the Loan Agreement with Founders
and the Company's obligations under the Loan Agreement were terminated.
The interest rate, conversion prices and exercise prices for the
Company's various loan transactions with Founders were determined by arms-
length negotiations; however, because of the Company's financial position
and the timing of the Company's liquidity needs throughout these periods, as
well as the unavailability of traditional bank financings during these
periods, the Company did not seek alternative sources of financing. The
Company believes that the terms of such financing were fair; however, the
Company did not make any attempt to determine whether such terms were
comparable to what would have been obtainable from disinterested, third
parties.
In connection with the acquisition of Dial-Thru International
Corporation on November 2, 1999, the Company assumed a related party note
payable to John Jenkins of approximately $400,000. The note bears interest
at 6% per annum, is payable in quarterly installments of $50,000 plus
interest beginning November 1, 1999, and matures on August 1, 2001. The
outstanding balance at October 31, 2000 was $346,000.
On December 12, 2000, subsequent to Mr. Cook's resignation as a
Director, the Company engaged Founders to perform certain investment banking
services for compensation consisting of (i) a nonrefundable retainer in the
amount of $70,000, part of which may be payable in stock, (ii) a monthly
payment of $9,000 commencing January 1, 2000 for twelve months, part of
which may be payable in stock, (iii) warrants to purchase 300,000 shares of
the Company's stock exercisable for five years at no greater than $3.50 per
share, and (iv) a percentage of the value of a qualified merger,
acquisition, or sale transaction in which Founders participates, on a
sliding scale from 5% (up to $2 million transaction value) to 1%
(transactions in excess of $8 million in value). The fee for Founders
services was determined by arms-length negotiation; however, the Company did
not solicit other advisors to provide said services and therefor the Company
did not determine whether the fees were comparable to that which would have
been obtainable from disinterested third
parties.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid by the Company and
its subsidiaries during the years ended October 31, 2000, 1999, and 1998 for
services in all capacities to each of the Company's chief executive officer
and the executive officers (the "Named Executive Officers") of the Company
whose total annual salary and bonus exceeded $100,000 during fiscal 2000.
SUMMARY COMPENSATION TABLE
Securities
Name and Principal Other Annual Underlying All Other
position Year Salary($) Bonus($) Compensation Options(#) Compensation
------------------ ---- --------- -------- ------------ ---------- ------------
Roger D. Bryant......... 2000 200,750 -- -- -- 4,115(1)
Chairman, CEO and 1999 200,000 82,066(2) -- 300,000(3) 5,860(4)
Director 1998 185,000 -- -- 250,000(5) 3,230(6)
John A. Jenkins......... 2000 175,950 -- -- -- 1,599(7)
President, COO, 1999 -- -- -- -- --
interim CFO, 1998 -- -- -- -- --
Secretary & Director
Debra L. Burgess(8)..... 2000 188,981 -- -- -- 1,239(8)
1999 165,000 82,066(2) -- 137,800(9) 2,821(10)
1998 140,000 -- -- 125,000(11) 415(6)
Ivor J. Flannery(12).... 2000 104,986 -- -- -- 1,562(13)
1999 129,583 36,033(2) -- 62,000(14) 1,823(15)
1998 110,000 3,100 -- -- --
--------
(1) Includes compensation associated with supplemental long-term disability
insurance and matching 401(k) plan contributions by the Company.
(2) Includes stock bonuses of 100,000 shares to each of Mr. Bryant and Ms.
Burgess and 50,000 shares to Mr. Flannery, valued at $32,066, $32,066
and $16,033, respectively, based upon the closing price of the Common
Stock on the date preceding the grant.
(3) Includes stock options to purchase 290,000 shares of Common Stock that
were repriced to $0.40 per share on December 11, 1998.
(4) Includes $3,230 of compensation associated with supplemental long-term
disability insurance and $2,630 of matching 401(k) plan contributions
by the Company.
(5) Includes 1997 Performance Warrants to purchase 250,000 shares of Common
Stock that vested upon the Change of Control occurring on January 30,
1998 and were repriced from $2.25 per share to $0.53 per share on July
20, 1998. The 1997 Performance Warrants were not issued under the
Company's stock option plan.
(6) Reflects compensation associated with long-term disability insurance.
(7) Includes compensation associated with supplemental long-term disability
insurance and matching 401(k) plan contributions by the Company.
(8) Ms. Burgess resigned as the Company's Executive Vice President, Chief
Operating Officer, Chief Financial Officer, Treasurer and Secretary on
January 14, 2000. Includes compensation associated with supplemental
long-term disability insurance and matching 401(k) plan contributions
by the Company.
(9) Includes stock options to purchase 122,800 shares of Common Stock that
were repriced to $0.40 per share on December 11, 1998.
(10) Includes $415 of compensation associated with long-term disability
insurance and $2,406 of matching 401(k) plan contributions by the
Company.
(11) Includes 1997 Performance Warrants to purchase 125,000 shares of Common
Stock that vested upon the Change of Control occurring on January 30,
1998 and were repriced from $2.25 per share to $0.53 per share on July
20, 1998. The 1997 Performance Warrants were not issued under the
Company's stock option plan.
(12) Mr. Flannery resigned as an officer of the Company in July 2000.
(13) Includes compensation associated with supplemental long-term disability
insurance and matching 401(k) plan contributions by the Company.
(14) Includes stock options to purchase 49,000 shares of Common Stock that
were repriced to $0.40 per share on December 11, 1998.
(15) Reflects matching 401(k) plan contributions by the Company.
(16) Reflects Warrants issued December 1999 exercisable at $1.44 a share,
of which 200,000 are exercisable within 60 days of January 23, 2001.
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
Mr. Bryant serves as the chief executive officer of the Company and its
subsidiaries, Canmax Retail Systems, Inc. ("CRSI," through which the
software business was conducted) and RDST, Inc. ("RDST," through which the
Company's prepaid telecommunications business is conducted), pursuant to a
written employment agreement dated July 1, 1998. The employment agreement
provides for certain benefits and protections upon a "Change of Control,"
which is defined to occur (i) at any time a person becomes a "beneficial
owner" of in excess of thirty percent of the combined voting power of the
outstanding securities of CRSI or the Company, (ii) if, at any time during
the twenty-four month period following a merger, tender offer,
consolidation, sale of assets or contested election, or any combination
thereof, at least a majority of the Company's Board shall cease to consist
of either (a) directors who served prior to such transaction or (b)
directors whose nomination for election by the stockholders of the Company
was approved by at least two-thirds of all directors then serving, or (iii)
at any time the stockholders of the Company approve an agreement to sell or
dispose of all or substantially all of the assets of CRSI or the Company.
The employment agreement also permits the Company to terminate Mr. Bryant
for "Cause", meaning a termination as a result of (a) acts of dishonesty
constituting a felony or intended to result in substantial gain for personal
enrichment at the expense of the Company or its subsidiaries, or (b) the
willful and continued failure to substantially perform his duties and
responsibilities following a demand for substantial performance by the
Company. The employment agreement prohibits Mr. Bryant from engaging in any
activities in competition with the Company or its subsidiaries during the
employment term and prohibits the executive from soliciting any employees,
customers or clients of the Company or its subsidiaries during the 2-year
period following any voluntary termination by the executive or termination
for Cause. Ms. Burgess served as an executive officer of the Company, CRSI
and RDST pursuant to an employment agreement substantially the same as Mr.
Bryant's until her resignation from the Company on January 14, 2000.
The July 1, 1997 employment agreements with Mr. Bryant and Ms. Burgess
provided for the issuance of warrants ("1997 Performance Warrants") to each
executive as additional employment compensation. Each 1997 Performance
Warrant expires 10 years from the date of issuance and, prior to the
amendments to the 1997 Performance Warrants in July of 1998, were
exercisable at a price of $2.25 per share, the closing price of the Common
Stock on July 17, 1997, the date that the Compensation Committee approved
the issuance of such warrants. The vesting of the 1997 Performance Warrants
was conditioned on the Company's achievement of certain financial targets or
upon the occurrence of a Change of Control. The 1997 Performance Warrants
vested on January 30, 1998 as a result of the Company's issuance of shares
of common stock and warrants as consideration for its acquisition of US
Communication Services, Inc. ("USC"). Effective July 20, 1998, the
Compensation Committee reduced the exercise price of the 1997 Performance
Warrants from $2.25 per share to $0.53 per share, the closing price of the
Common Stock on July 17, 1998, the trading date preceding the date that the
Compensation Committee repriced the 1997 Performance Warrants. In addition,
on such date the Compensation Committee also issued to Mr. Bryant and Ms.
Burgess additional performance warrants (the "1998 Performance Warrants")
having an exercise price of $0.53 per share and a 10 year expiration period,
the vesting of which is dependent either upon the Company's recording of
revenues in excess of $50 million in any period of twelve consecutive months
with positive earnings during such twelve-month period or upon a Change of
Control (other than a Change of Control arising from the sale of the
software division). The 1998 Performance Warrant issued to Ms. Burgess
expired unexercised on her resignation from the Company on January 14, 2000.
Mr. Bryant's employment agreement expires June 30, 2001. Mr. Bryant is
entitled to receive an annual base salary of $200,000 and to participate in
any bonus programs established by the Company's Board. Pursuant to his
employment agreement, Mr. Bryant has also been granted 1997 Performance
Warrants to acquire 250,000 shares of Common Stock and 1998 Performance
Warrants to acquire an additional 100,000 shares of Common Stock. Pursuant
to the terms of his agreement, Mr. Bryant may elect to voluntarily terminate
his employment within 90 days following a Change of Control and receive a
lump sum payment equal to one year's base salary. Mr. Bryant's employment
agreement also provides for the vesting of all outstanding options and
warrants to acquire Common Stock held by Mr. Bryant upon a Change of Control
(other than a Change of Control arising from the sale of the software
division). If Mr. Bryant is terminated during his employment period without
Cause, he will be entitled to continue to receive his base salary and
benefits for a period of two years and an amount equal to any bonus paid
during the preceding 12 months (payable in 24 monthly installments) in
accordance with CRSI's standard payroll cycle; provided, however, that such
amounts shall be payable in a lump sum following a Change of Control.
Pursuant to the terms of her employment agreement, Ms. Burgess was
entitled to receive an annual base salary of $165,000 and to participate in
any bonus programs established by the Company's Board. Pursuant to her
employment agreement, Ms. Burgess was also granted 1997 Performance Warrants
to acquire 125,000 shares of Common Stock and 1998 Performance Warrants to
acquire 200,000 shares of Common Stock. Ms. Burgess' 1998 Performance
Warrants expired unexercised upon her resignation from the Company on
January 14, 2000. Pursuant to the terms of her agreement, Ms. Burgess was
entitled to similar Change of Control protections and benefits as provided
in Mr. Bryant's employment agreement. Ms. Burgess' employment agreement also
provided that she would be entitled to continue to receive her base salary
and benefits for a period of one year, plus an amount equal to 50% of any
bonus paid during preceding 12 months following any termination without
Cause. Ms. Burgess' employment agreement was terminated upon her resignation
from the Company on January 14, 2000. Pursuant to the terms of the severance
arrangement between Ms. Burgess and the Company, Ms. Burgess received her
base salary (of $165,000 annually) in accordance with the Company's regular
payroll cycle for 12 months (through January 2001), and continued to receive
health benefits during such period.
The Company and RDST were both parties to a written employment agreement
with Ivor J. Flannery, formerly Vice President of Technology of RDST. Mr.
Flannery resigned in July 2000. The employment agreement for Mr. Flannery
provided for an annualized base salary of $110,000.
On November 2, 1999, the Company acquired the assets and business
operations of DTI LIQ-CO, Inc., a California corporation formerly known as
Dial-Thru International Corporation. In connection with the acquisition, the
Company and John Jenkins, the sole shareholder of the seller in the
transaction, entered into an employment agreement with a two-year term and
an annual base salary of $175,000. Mr. Jenkins is entitled to participate in
any benefit programs established for the Company's executive officers. Mr.
Jenkins is also guaranteed to receive a $10,000 bonus if the business
acquired by the Company from Mr. Jenkins achieves average monthly revenues
in excess of $1.9 million and average earnings (before interest, taxes,
depreciation and amortization) of in excess of $235,000 during any period of
three consecutive months ending on or before October 31, 2001, and is
entitled to receive an additional $20,000 if the acquired business produces
average monthly revenues in excess of $3.8 million and average monthly
earnings (before interest, taxes, depreciation and amortization) in excess
of $475,000 during any period of three consecutive months ending on or
before October 31, 2001. Pursuant to the terms of his agreement, Mr. Jenkins
is entitled to terminate his employment voluntarily within 90 days following
a Change of Control and receive one year's annualized base salary in effect
at the time of termination as a lump sum payment. Further, if Mr. Jenkins
is involuntarily terminated other than for Cause in contemplation of or
within two years following a Change of Control, the Company is obligated to
pay to Mr. Jenkins a lump sum severance payment equal to his annualized base
salary in effect at the time of the involuntary termination plus 50% of any
bonuses paid during the preceding 12-month period. Mr. Jenkins' employment
agreement also provides for the vesting of all outstanding options and
warrants to acquire Common Stock held by Mr. Jenkins upon a Change of
Control. If Mr. Jenkins is terminated during his employment period without
Cause, he will be entitled to continue to receive his base salary and
benefits for a period of one year and 50% of any bonuses paid during the
preceding 12 months in accordance with the Company's standard payroll cycle.
STOCK OPTIONS
The Board of Directors introduced a stock option plan (the "Stock Option
Plan"), pursuant to a resolution dated March 29, 1990, in the form approved
by the Company's stockholders at an annual general meeting held March 20,
1990. The Stock Option Plan authorizes the Directors to grant options to
purchase common shares of the Company provided that, when exercised, such
options will not exceed 2.3 million shares of Common Stock and no options
will be granted to any individual director or employee which will, when
exercised, exceed 5% of the issued and outstanding shares of Common Stock.
The term of any option granted under the Stock Option Plan is fixed by the
Board of Directors at the time the options are granted, provided that the
exercise period may not be longer than 10 years from the date of granting.
The exercise price of any options granted under the Stock Option Plan is the
fair market value at the date of grant. On February 26, 1998, the Board of
Directors increased the number of shares issuable under the Stock Option
Plan from 1.2 million shares to 2.3 million shares so that stock options
previously granted by the Board in excess of those permitted by the Stock
Option Plan could be covered by the plan. On August 25, 1998, the Board of
Directors approved an amendment to the Stock Option Plan to extend the
exercise period of any option holder that becomes an employee of a party
continuing or surviving any merger or acquiring any material portion of the
assets of the Company to two years from the date of such an event. Prior to
these amendments, a former employee would have had a thirty-day period
following their termination of employment without cause in which to exercise
a stock option. On January 14, 2000, the Board of Directors approved an
amendment to the Stock Option Plan to allow option holders to use stock or
other consideration acceptable to the Board of Directors to exercise stock
options, and to allow the Board the flexibility to amend the terms of the
plan and stock option grants. These amendments also clarified the
obligations of option holders desiring to exercise their stock options to
provide the Company with sufficient amounts to pay withholding and other
taxes due upon the exercise of a stock option. As of January 23, 2001,
1,685,590 shares of Common Stock had been issued under the Stock Option
Plan, 464,100 shares remain subject to outstanding options under the Stock
Option Plan, and 150,310 shares were available under the Stock Option Plan.
On February 24, 2000, the Board of Directors adopted the 2000 Omnibus
Securities Plan (the "2000 Securities Plan"). The 2000 Securities Plan
authorizes the Company to issue up to one million shares of common stock
under the 2000 Securities Plan, either as bonus or restricted stock or upon
the exercise of stock options granted under the 2000 Securities Plan. As of
January 23, 2001, no shares or options had been issued or granted under the
2000 Securities Plan.
OPTION GRANTS IN LAST FISCAL YEAR
No stock options pursuant to the Company's stock option plans were
granted to the Named Executive Officers during fiscal year ended October 31,
2000.
The following table sets forth information with respect to the number of
options held at fiscal year end and the aggregate value of in-the-money
options held at fiscal year end by each of the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money Options at
Options at FY-END(#) FY-END(1)
Shares Acquired Value ------------------------- ------------------------
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ----------- ----------- ------------- ---------- -------------
Roger D. Bryant(2)...... 4,000 42,630 515,000 100,000 $788,568 $153,120
Debra L. Burgess(3)..... 262,800 1,749,717 -- -- -- --
Ivor J. Flannery........ 7,500 9,571 -- -- -- --
--------
(1) Calculated by determining the difference between the fair market value
of the Common Stock underlying the Options on October 31, 2000 ($1.5312
per share) and the exercise price of such options.
(2) Includes vested 1997 Performance Warrants to purchase 250,000 shares of
Common Stock and 265,000 shares issuable under the Company's stock
option plan.
(3) Included vested 1997 Performance Warrants to purchase 125,000 shares of
Common Stock and 137,800 shares issuable under the Company's stock
option plan.
AUDIT COMMITTEE REPORT
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors and operates under a written charter
adopted by the Board of Directors, a copy of which is attached to this proxy
statement as APPENDIX A. Each of the Audit Committee members satisfies the
definition of independent director as established in the NASDAQ Stock
Exchange Listing Standards.
Management has the primary responsibility for the financial statements and
the reporting process including the systems of internal controls. In
fulfilling its oversight responsibilities, the committee reviewed the
audited financial statements in the Annual Report with management including
a discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of
disclosures in the financial statements.
The committee reviewed with the independent auditors, who are responsible
for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles, their judgments as
to the quality, not just the acceptability, of the Company's accounting
principles and such other matters as are required to be discussed with the
committee under generally accepted auditing standards. In addition, the
committee has discussed with the independent auditors the auditor's
independence from management and the Company including the matters in the
written disclosures required by the Independence Standards Board, which
included the auditors' non-audit related tax work.
The committee discussed with the Company's internal and independent auditors
the overall scope and plans for their respective audits. The committee
meets with the internal and independent auditors, with and without
management present, to discuss the results of their examinations, their
evaluations of the company's internal controls and the overall quality of
the Company's financial reporting. The committee held four meetings during
the fiscal 2000.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on
Form 10-K for the fiscal year ended October 31, 2000 for filing with the
Securities and Exchange Commission. The committee and the board have also
recommended the selection of the Company's independent auditors.
AUDIT COMMITTEE:
Nick DeMare (Chairman)
Robert M. Fidler
In accordance with the rules of the Securities and Exchange Commission (the
"SEC"), the foregoing information, which is required by paragraphs (a) and
(b) of Regulation S-K Item 306, shall not be deemed to be "soliciting
material" or to be "filed" with the Commission or subject to the
Commission's Regulation 14A, other than as provided in that Item, or to the
liabilities of Section 18 of the Securities Exchange Act of 1934, except to
the extent that the Company specifically requests that the information be
treated as soliciting material or specifically incorporates it by reference
into a document filed under the Securities Act of 1933, or the Securities
Exchange Act of 1934.
AUDIT FEES
For the year ended October 31, 2000, King, Griffin & Adamson P.C., the
Company's independent public accountants, billed the Company an aggregate
of $86,164 for professional services rendered for the audit of the Company's
financial statements for such period and the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q during
such period.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES.
There were no financial information systems design and implementation
services rendered for the year ended October 31, 2000.
ALL OTHER FEES
There were no other services rendered for the Company by King, Griffin &
Adamson P.C. for the year ended October 31, 2000.
The Audit Committee has determined that the provision of the services
covered in the preceding paragraphs of this section is compatible with
maintaining the independence of King, Griffin & Adamson P.C.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers and persons who own
more than 10% of the Company's common stock to file with the SEC initial
reports of ownership and reports of changes in ownership of common stock and
other equity securities of the Company. Officers, directors and greater than
10% stockholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) reports they file. To the Company's knowledge,
based solely on the review of the copies of such reports filed during the
fiscal year ended October 31, 2000, all Section 16(a) filing requirements
applicable to its officers, directors and greater than 10% beneficial owners
were complied with, except that the Form 3 Initial Statement of Beneficial
Ownership of Securities for John Jenkins and Dial-Thru International
Corporation required to be filed on or about November 12, 1999 was filed on
January 20, 2000, and the Form 5 Annual Statement of Beneficial Ownership of
Securities Report to have been filed by Larry Vierra on or about December
15, 2000 was not filed.
ITEM 2.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has approved King, Griffin & Adamson P.C. to serve
as independent auditors of the Company for the fiscal year ending October
31, 2001, and recommends ratification by the stockholders of such
appointment. Such ratification requires the affirmative vote of the holders
of a majority of the Common Stock of the Company entitled to vote on this
matter and represented in person or by proxy at the Meeting. Abstentions on
this proposal will have the same legal effect as a vote against this
proposal. Broker non-votes will have no effect on the outcome of the vote on
this proposal. In the event the appointment is not ratified, the Board of
Directors will consider the appointment of other independent auditors. The
Board of Directors may terminate the appointment of King, Griffin & Adamson
P.C. as the Company's independent auditors without the approval of the
stockholders of the Company if the Board of Directors deems such termination
necessary or appropriate.
STOCKHOLDER PROPOSALS
Any stockholder who wishes to submit a proposal for inclusion in the
Company's proxy materials and for presentation at the Company's 2002 Annual
Meeting of Stockholders must forward such proposal to the Secretary of the
Company at the address indicated on the first page of this proxy statement,
so that the Secretary receives it no later than December 28, 2001.
ADVANCE NOTICE REQUIREMENTS
The Company's bylaws require that stockholder proposals and director
nominations by stockholders be made in compliance with certain advance
notice requirements set forth in the Company's bylaws. For business to be
properly brought before an annual meeting by a stockholder, the stockholder
must deliver a written notice to the Secretary of the Company no later than
90 days prior to the date of the scheduled meeting; however, if less than
100 days' notice or prior public disclosure of the date of the scheduled
meeting is given, notice by the stockholder must be given no later than the
close of business on the tenth day following the Company's public disclosure
or mailing of a notice setting forth the date of the annual meeting. A
stockholder's notice to the Secretary with regard to an annual meeting shall
set forth, as to each matter that the stockholder proposes to bring before
the meeting,
* a brief description of the business desired to be brought before the
meeting and the reasons for conducting such business at the annual
meeting,
* the name and address, as they appear on the Company's books, of the
stockholders supporting the proposal,
* the class and number of shares of the Company that are beneficially
owned by the supporting stockholders on the date of the presenting
stockholder's notice, and
* any material interest of the presenting or supporting stockholders in
such business.
Any stockholder desiring to nominate a person to serve as a director of
the Company must provide written notice of the stockholder's intent to make
such nomination to the Secretary of the Company no less than 90 days prior
to the scheduled meeting; provided that if less than 100 days' notice or a
public disclosure of the date of the scheduled meeting is given, notice by
the stockholder must be given no later than the close of business on the
tenth day following the Company's public disclosure or the mailing of a
notice setting forth the date of the annual meeting. Any notice regarding a
stockholder's proposal to nominate a director for election at an annual
meeting must set forth
* the name, age, business address and residence address of the person or
persons intended to be nominated,
* a representation that the stockholder is a holder of record of stock
of the Company entitled to vote at the meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons
specified in the notice,
* a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons pursuant
to which the nominations are to be made by the stockholder,
* such other information regarding each nominee proposed by the
stockholder that would have been required if it had been included
in a proxy statement filed in accordance with the rules of the
Securities and Exchange Commission, and
* the consent of each nominee to serve as director of the Company if so
elected.
The Chairman of the meeting may refuse to bring any business before the
meeting that is not properly brought before the meeting in accordance with
the Company's bylaws. Copies of the Company's bylaws are available upon
written request to the Secretary of the Company. The advance notice
requirements for the Company's annual meetings do not supersede the
requirements or conditions established by the Securities and Exchange
Commission for stockholder proposals to be included in the Company's proxy
materials for a meeting of stockholders.
OTHER MATTERS
The Board of Directors is not aware of any other matters that are to be
presented for action at the Meeting. However, if any other matters properly
come before the Meeting or any adjournment(s) thereof, it is intended that
the enclosed proxy will be voted in accordance with the judgment of the
persons voting the proxy.
By Order of the Board of Directors
/s/ John Jenkins
_____________________________________
John Jenkins
Secretary
April 2, 2001
DIAL-THRU INTERNATIONAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Roger D. Bryant and John
Jenkins, or either of them, as the true and lawful attorneys and proxies of
the undersigned, with full power of substitution, to represent the
undersigned and to vote all of the shares of Common Stock of Dial-Thru
International Corporation (the "Company"), that the undersigned is entitled
to vote at the Annual Meeting of Shareholders of the Company to be held on
May 21, 2001 and at any adjournments thereof.
1. Election of FOR All WITHHOLD
Directors nominees AUTHORITY to
named below vote for all
(except as nominees
marked to the named below
contrary)
Roger D. Bryant, John Jenkins, Nick DeMare, Robert M. Fidler, Lawrence Vierra
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write the nominee's name on the line below.)
--------------------------------------------
2. To ratify the selection of King, Griffin & Adamson P.C. to serve as
independent public accountants for the Company for the 2001 fiscal year.
FOR AGAINST ABSTAIN
In their discretion, to vote upon such other business as may properly
come before the meeting or any adjournments thereof.
(Continued and to be signed on Reverse Side)
(Continued from Other Side)
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFIC DIRECTIONS ARE
GIVEN, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS, "FOR" EACH
OF THE PROPOSALS SET FORTH HEREIN AND IN THE DISCRETION OF THE PROXY HOLDERS
ON ALL OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.
[INSERT MAILING Dated: __________________
LABEL]
_________________________
Signature of Shareholder
_________________________
Signature (if jointly owned)
Please sign exactly as
the name appears on the
certificate or certificates
representing shares to
be voted by this proxy.
When signing as
executor, administrator,
attorney, trustee or
guardian, please give
full title as such. If a
corporation, please sign
in full corporate name
by president or other
authorized person. If a
partnership, please sign
in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
APPENDIX A
DIAL-THRU INTERNATIONAL CORPORATION
AUDIT COMMITTEE CHARTER
The Audit Committee is appointed by the Board to assist the Board in
monitoring (1) the integrity of the financial statements of the Company, (2)
the compliance by the Company with legal and regulatory requirements and (3)
the independence and performance of the Company's internal and external
auditors.
The members of the Audit Committee shall meet the independence and
experience requirements of the National Association of Security Dealers,
Inc. and The Nasdaq Stock Market, Inc. The members of the Audit Committee
shall be appointed by the Board.
The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise the Committee. The Audit
Committee may request any officer or employee of the Company or the
Company's outside counsel or independent auditor to attend a meeting of the
Committee or to meet with any members of, or consultants to, the Committee.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.
2. Review the annual audited financial statements with management,
including major issues regarding accounting and auditing
principles and practices as well as the adequacy of internal
controls that could significantly affect the Company's financial
statements.
3. Review any analysis prepared by management and the independent
auditor of significant financial reporting issues and judgments
made in connection with the preparation of the Company's financial
statements.
4. Review with management and the independent auditor the Company's
quarterly financial statements prior to the filing of its Form
10-Q.
5. Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to
monitor and control such exposures.
6. Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent auditor,
internal auditors or management.
7. Recommend to the Board the appointment of the independent auditor,
which firm is ultimately accountable to the Audit Committee and
the Board.
8. Approve the fees to be paid to the independent auditor.
9. Receive periodic reports from the independent auditor regarding
the auditor's independence, discuss such reports with the auditor,
and if so determined by the Audit Committee, recommend that the
Board take appropriate action to satisfy itself of the
independence of the auditor.
10. Evaluate together with the Board the performance of the
independent auditor and, if so determined by the Audit Committee,
recommend that the Board replace the independent auditor.
11. Review the appointment and replacement of the senior internal
auditing executive.
12. Review the significant reports to management prepared by the
internal auditing department and management's responses.
13. Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit.
14. Obtain from the independent auditor assurance that Section 10A of
the Securities Exchange Act of 1934 has not been implicated.
15. Obtain reports from management, the Company's senior internal
auditing executive and the independent auditor that the Company's
subsidiary/foreign affiliated entities are in conformity with
applicable legal requirements.
16. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to
the conduct of the audit.
17. Review with the independent auditor any problems or difficulties
the auditor may have encountered and any management letter
provided by the auditor and the Company's response to that letter.
Such review should include:
(a) Any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or
access to required information.
(b) Any changes required in the planned scope of the internal
audit.
(c) The internal audit department responsibilities, budget and
staffing.
18. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy
statement.
19. Advise the Board with respect to the Company's policies and
procedures regarding compliance with applicable laws and
regulations and with the Company's Code of Conduct.
20. Review with the Company's General Counsel (or in the absence of
a General Counsel, the Company's outside legal counsel) legal
matters that may have a material impact on the financial
statements, the Company's compliance policies and any material
reports or inquiries received from regulators or governmental
agencies.
21. Meet at least annually with the chief financial officer, the
senior internal auditing executive (if different than the Chief
Financial Officers) and the independent auditor in separate
executive sessions.
While the Audit Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Audit Committee to plan or
conduct audits or to determine that the Company's financial statements are
complete and accurate and are in accordance with generally accepted
accounting principles. This is the responsibility of management and the
independent auditor. Nor is it the duty of the Audit Committee to conduct
investigations, to resolve disagreements, if any, between management and the
independent auditor.