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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 (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 Rule 14a-11(c) or Rule 14a-12
CityXpress.com 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:
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 29, 2000
To the Shareholders of CityXpress.com, Corp.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
CityXpress.com, Corp. has been called and will be held on November 29, 2000 at
the Century Plaza Hotel, 1015 Burrard Street, Vancouver, BC, Canada. V6Z 1Y5
commencing at 11:00 a.m., local time, for the following purposes:
1. To elect five (5) Directors of the Company to serve until the
next Annual Meeting of Shareholders and until their successors
are duly elected and qualified;
2. To approve an amendment to the Company's 1999 Stock Option
Plan;
3. To ratify the appointment of Ernst & Young LLP as the
independent auditors for the Company for the 2001 fiscal year;
and
4. To transact such other business as may properly come before
the Annual Meeting of Shareholders or any adjournment thereof.
The record date for determining shareholders entitled to vote at the
Annual Meeting of Shareholders is October 18, 2000, and only shareholders of
record at the close of business on that date will be entitled to vote at the
Annual Meeting, and any adjournment thereof.
IT IS REQUESTED WHETHER OR NOT YOU INTEND TO ATTEND THE ANNUAL MEETING,
THAT YOU COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING AND DESIRE TO VOTE IN PERSON
YOU MAY DO SO. A PROXY MAY BE REVOKED AT ANYTIME BEFORE IT IS VOTED.
By Order of the Board of Directors
Phil Dubois,
President & CEO
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CITYXPRESS.COM, CORP.
Suite 200
1727 West Broadway
Vancouver, British Columbia V6J 4W6
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PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 29, 2000
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Proxies in the accompanying form are solicited on behalf, and at the
direction, of the Board of Directors of CityXpress.com, Corp. (the "Company")
for use at the Annual Meeting of the Company's shareholders to be held on
November 29, 2000 or any adjournment thereof (the "Annual Meeting"). A
shareholder executing and returning a proxy has the power to revoke it at any
time before it is voted by delivering written notice of revocation to the
Secretary of the Company prior to or at the Annual Meeting, by filing a duly
executed proxy bearing a later date or by voting in person at the Annual
Meeting. Unless so revoked, the persons appointed by the enclosed proxy have
advised the Board of Directors that it is their intention to vote at the Annual
Meeting in compliance with the instructions on the proxy and, if no contrary
instruction is indicated on the proxy, for the election of the persons nominated
to serve as directors, to approve the amendment to the Company's 1999 Stock
Option Plan, to ratify the appointment of Ernst & Young, LLP as independent
auditors for the Company, and in accordance with their best judgment on any
other matters properly brought before the Annual Meeting as described herein.
The Board of Directors is not aware of any other matter which may come before
the Annual Meeting.
When stock is held of record in the name of more than one person, the
proxy is valid if signed by any of such persons unless the Company receives
written notice to the contrary. If the shareholder is a corporation, the proxy
should be signed in the name of such corporation by an authorized officer. If
signed as attorney, executor, administrator, trustee, guardian or in any other
representative capacity, the signer's full title should be given and, if not
previously furnished, a certificate or other evidence of appointment should be
furnished to the Company.
This Proxy Statement and the form of proxy which is enclosed and the
Company's 2000 Annual Report on Form 10K-SB are first being mailed to the
Company's shareholders commencing on or about November 7, 2000.
The cost of soliciting proxies will be paid by the Company.
Solicitations may be made by mail, personal interview, telephone, and facsimile
by officers and regular employees of the Company, who will receive no additional
compensation for their services. The Company will reimburse banks, brokers and
other nominees for their reasonable expenses in forwarding proxy material to the
beneficial owners for whom they hold shares.
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Only holders of record of the Company's shares of Common Stock (the
"Common Stock") at the close of business on October 18, 2000 are entitled to
receive notice of, and to vote at, the Annual Meeting and any adjournment
thereof. On October 18, 2000 there were 23,008,098 shares of Common Stock issued
and outstanding. Each share of Common Stock is entitled to one vote for each
matter considered. A majority of the outstanding shares of Common Stock entitled
to vote at the Annual Meeting must be present at the Annual Meeting, in person
or by proxy, to constitute a quorum for the transaction of business. Shares
represented by proxies that reflect abstentions or include "broker non-votes"
will be treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum.
Under applicable Florida laws and the Company's Articles of
Incorporation and Bylaws (i) for the election of directors, which requires a
plurality of the votes cast at the Annual Meeting, only proxies and ballots
indicating votes "FOR all nominees," "WITHHELD for all nominees" or specifying
that votes be withheld for one or more designated nominees are counted to
determine the total number of votes cast; and (ii) for the adoption of all other
proposals, which are decided by a majority of the shares of Common Stock of the
Company outstanding or present in person or by proxy and entitled to vote, only
proxies and ballots indicating votes "FOR," "AGAINST" or "ABSTAIN" on the
proposals or providing the designated proxies with the right to vote in their
judgment and discretion on the proposals are counted to determine the number of
shares present and entitled to vote. "Broker non-votes" are not counted for
purposes of determining whether a proposal has been approved.
The mailing address of the principal corporate office of the Company is
Suite 200 1727 West Broadway Vancouver, British Columbia V6J 4W6.
VOTING SECURITIES AND PRINCIPAL HOLDERS
Any shareholder of record at the close of business on October 18, 2000
(the "Record Date") will be entitled to vote at the Annual Meeting. On the
Record Date, there were issued and outstanding 23,008,098 shares of Common
Stock.
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Unless otherwise indicated, the following table sets forth certain
information available to the Company as of October 18, 2000, regarding (a) the
ownership of the Company's common stock by (i) each of the Company's directors
and nominees; (ii) each of the Company's named executive officers; and (iii) all
directors and executive officers of the Company as a group; and (b) the
ownership of the Company's common stock by all those known by the Company to be
beneficial owners of more than five percent (5%) of its outstanding common
stock.
Name and Address of Amount and Nature of (8)
TITLE OF CLASS Beneficial Owner Beneficial Ownership PERCENTAGE OF CLASS
- -------------- ------------------- --------------------- -------------------
Common Shares Phil Dubois 2,897,550(1)(7) 12.6%
Suite 200
1727 West Broadway
Vancouver, BC V6J 4W6
Common Shares Ken Bradley 2,863,050(2)(7) 12.5%
Suite 2001
727 West Broadway
Vancouver, BC V6J 4W6
Common Shares Brent Forgeron 1,130,000 4.9%
23-1243 Thurlow Street
Vancouver, BC V6E 1X4
Common Shares Ken Spencer 1,145,240(3)(7) 5.0%
Suite 2001
727 West Broadway
Vancouver BC V6J 4W6
Common Shares Jim MacKay 250,000(4) 1.1%
Suite 2001
727 West Broadway
Vancouver BC V6J 4W6
Common Shares Bob Smart 50,000(5) 0.2%
Suite 2001
727 West Broadway
Vancouver BC V6J 4W6
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Name and Address of Amount and Nature of (8)
TITLE OF CLASS Beneficial Owner Beneficial Ownership PERCENTAGE OF CLASS
- -------------- ------------------- --------------------- -------------------
Common Shares Ian Thomas 50,000(6) 0.2%
Suite 2001
727 West Broadway
Vancouver BC V6J 4W6
ALL OFFICERS AND DIRECTORS AS A GROUP (7) 8,385,840 36.4%
(1) Includes 65,500 shares of common stock owned by Mr. Dubois's wife. Also
includes 270,800 shares of common stock, which may be purchased
pursuant to warrants granted by the Company in connection with his
personal guarantees of loans made to the Company.
(2) Includes 31,000 shares of common stock owned by Mr. Bradley's wife.
Also includes 270,800 shares of common stock, which may be purchased
pursuant to warrants granted by the Company in connection with his
personal guarantees of loans made to the Company.
(3) Includes 100,000 shares of common stock, which may be purchased
pursuant to options granted by the Company.
(4) Includes 250,000 shares of common stock, which may be purchased
pursuant to options granted by the Company.
(5) Includes 50,000 shares of common stock, which may be purchased pursuant
to options granted by the Company.
(6) Includes 50,000 shares of common stock which may be purchased pursuant
to options granted by the Company
(7) Certain of these shares are subject to transfer restrictions.
(8) The percentages in this table are based on a total number of
outstanding common shares equal to 23,008,098.
We are not aware of any arrangement that might result in a change in
control in the future.
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ITEM 1
ELECTION OF DIRECTORS
The Company proposes that the following five (5) individuals be elected
to the Board of Directors of the Company. Information regarding the persons
nominated to stand for election at the Annual Meeting appear in the sections
below.
Directors nominated herein are elected to serve until the next annual
meeting of shareholders and until their respective successors have been duly
elected and qualified. Nominees receiving a plurality of the votes cast will be
elected as directors. The enclosed form of proxy provides a means for the
holders of Common Stock to vote for all of the nominees listed therein, to
withhold authority to vote for one or more of such nominees or to withhold
authority to vote for all of such nominees. The Company is not aware of any
reason why any of the nominees, if elected, would be unable to serve as a
director. If an unexpected occurrence makes it necessary, in the judgment of the
Board of Directors, that some other person be substituted for any of the
nominees, shares represented by proxies will be voted for such other person as
the Board may select.
Vacancies on the Board of Directors may be filled by the Board of
Directors until the next annual meeting of shareholders. Proxies cannot be voted
on the election of directors for a greater number of persons than five (5),
which is the number of nominees named herein.
In the election of directors, a shareholder has the right to vote the
number of shares owned by the shareholder for as many persons as there are
directors to be elected. The Company's Articles of Incorporation do not permit
cumulative voting.
NOMINEES TO SERVE AS DIRECTORS
NAME AGE SINCE POSITION(S) HELD
- ---- --- ------ ----------------
Ken R. Bradley 53 January 1999 Chief Operating Officer & CFO
Phil Dubois 53 January 1999 President & CEO
Bob Smart 49 August 1999 Partner,
Radford & Smart
Ken Spencer 55 August 1999 Chairman of the Board
Ian Thomas 53 August 1999 President
Thomas Consultants Inc.
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BUSINESS EXPERIENCE OF THE NOMINEES FOR THE BOARD OF DIRECTORS
KEN BRADLEY, age 53, has served as Chief Operating Officer, CFO and a director
of the Company since the acquisition of Xceedx on January 27, 1999. From January
1996 to present, Mr. Bradley serves as Vice President Finance and Vice President
of Operations of Xceedx a company he co-founded in 1996. From September 1994 to
December 1995, Mr. Bradley was an independent consultant providing consulting
services to technology companies. From September 1990 to August 1994, Mr.
Bradley was Vice President Finance and Administration at Modatech Systems, Inc.,
a company in the North American sales force automation marketplace. Mr.
Bradley's past experience also includes serving as Regional Controller at Domtar
packaging, a national company involved in the manufacturing of corrugated
containers. From February 1983 to January 1997, Mr. Bradley served as Manager of
Finance and Administration at Mobile Data International Inc., a company that
developed mobile data terminals that operated over radio frequency. From
February 1979 to February 1983, Mr. Bradley served as Corporate Controller at
Canadian Auto Carriers a specialized carrier of automobiles in western Canada.
Mr. Bradley is a Certified Management Accountant.
PHIL DUBOIS, age 53, has served as President, CEO and a director of the Company
since the acquisition of Xceedx on January 27, 1999. From January 1996 to
present, Mr. Dubois serves as President and CEO of Xceedx a company he
co-founded in 1996. Xceedx is a provider of Internet technology services and
eCommerce software solutions. From September 1994 to December 1995, Mr. Dubois
was an independent consultant providing consulting services to technology
companies. From May 1992 to August 1994, Mr. Dubois served as President and CEO
of Modatech Systems, Inc., a company in the North American sales force
automation marketplace. From May 1989 to May 1992, Mr. Dubois served as Vice
President of Development of Modatech. From May 1989 to August 1994, Mr. Dubois
was a director of Modatech. Mr. Dubois is the chair and a director of AceTech, a
not-for-profit association of high tech CEO's, and a director of the BC
Softworld Society; a not-for-profit organization dedicated to the growth of the
software industry in the province of British Columbia.
BOB SMART, age 49, has served as a director since August 25, 1999. Bob has over
20 years of senior management experience in a variety of businesses. He
currently is a Partner in the consulting firm of Radford & Smart, a position he
has held since February 1999. From June 1998 to February 1999, her served as
Executive Vice President and a director of Bargain Castle International Discount
Centres Ltd., a wholesale and retail products liquidator. From December 1997 to
June 1998, Mr. Smart served as President of Webcastsystems, Inc., a software
developer. From October 1996 to December 1997, he served as President of Action
View Advertising Ltd. an outdoor advertising media company. From October 1994 to
October 1996 Mr. Smart served as Vice President Corporate Development of
Imperial Ginseng Products Ltd. a grower and distributor of ginseng and ginseng
products.
KEN SPENCER, age 55, has served as Chairman and a director of the Company since
August 3, 1999. In 1983, Mr. Spencer co-founded Creo Products, a company that
manufactures complex, high-value
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equipment utilizing precision mechanics, digital design, laser, optics and
software for the printing industry. He served as CEO of Creo Products from 1985
to 1995, and as Chairman of the Creo Products Board of Directors from 1985 to
1996. Mr. Spencer remains a director of Creo Products. Mr. Spencer also serves
as a director of De Novo Enzymes, a bio-technology company, Science World, a
government organization that promotes science and technology throughout the
province of British Columbia and the BC Institute of Technology and as Chairman
of the Board of Spectrum Signal Processing, a position he has held since
December, 1997.
IAN THOMAS, age 53, has served as a director since August 25, 1999. In 1979, he
founded Thomas Consultants Inc., which presently operates offices in Vancouver
Canada and the Gold Coast Australia. Mr. Thomas serves as CEO of Thomas
Consultants Inc. a position he has held since the company was founded. Thomas
Consultants Inc. specializes in the planning and development of large-scale
retail projects and undertakes strategic planning assignments for major national
and international retailers, and currently works in over 30 countries. Mr.
Thomas sits on the Board of Trustees of the International Council of Shipping
Center's Education Foundation in New York, and is a director of Future Shop,
North America's third largest electronics chain, a position he has held since
August 1993.
BOARD AND COMMITTEE MEETINGS
During the Company's fiscal year ended June 30, 2000, the Board of
Directors met 6 times. The Board of Directors has an Audit Committee and a
Compensation Committee. With the exception of one meeting which was attended by
4 of the 5 directors, each director attended all meetings of the Board of
Directors.
The Audit Committee makes recommendations as to the selection of
independent auditors, evaluates the audit services and the Company's financial,
accounting and internal audit policies, functions and systems, and approves the
engagement of independent auditors to provide non-audit services. The Audit
Committee met 2 times during the Company's fiscal year ended June 30, 2000. The
Audit Committee consists of Messrs. Spencer, Smart and Dubois. Each member of
the Audit Committee attended all meetings of the Committee.
The Compensation Committee makes recommendations as to the compensation
and benefits to be paid to the Company's officers and directors. The
Compensation Committee met 2 times during the Company's fiscal year ended June
30, 2000. The Compensation Committee consists of Messrs. Spencer, Thomas and
Bradley. Each member of the Compensation Committee attended all meetings of the
Committee.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Bradley, who is the Company's Chief Operating Officer, is a member
of the Compensation Committee.
DIRECTORS REMUNERATION
In the Company's fiscal year ended June 30, 2000, Directors of the
Company did not receive any cash compensation from the Company for their
services as directors.
COMPENSATION OF OFFICERS AND DIRECTORS
As of June 30, 2000, the Company's executive officers consisted of Phil
Dubois, President and CEO, Ken R. Bradley, Chief Operating Officer and CFO, Jim
MacKay Vice President Sales & Marketing and Brent Forgeron, Vice President.
During the year ended June 30, 2000, salary compensation was paid to
our executive officers. The following table contains information concerning
compensation paid to named executive officers for the financial years ended June
30, 2000 and for the year ended June 30, 1999.
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SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- -------------------------------
AWARDS PAY-OUTS
Other Securities
Annual Under- All Other
NAME AND PRINCIPAL Compen- Restricted Stock lying Options LTIP Compen-
POSITION Year Salary($) Bonus($) sation($) Award(s)($) SARs(#) Payouts sation($)
- ------------------ ---- --------- -------- --------- ---------------- ------------- ------- ---------
Phil Dubois 2000 48,6292 Nil Nil Nil Nil
President & CEO 1999 21,846 Nil Nil Nil Nil
Ken Bradley 2000 48,6292 Nil Nil Nil Nil
COO & CFO 1999 21,846 Nil Nil Nil Nil
Brent Forgeron 2000 40,7593 Nil Nil Nil Nil
Vice President 1999 32,769 Nil Nil Nil Nil
Jim MacKay 2000 12,500 Nil Nil Nil Nil
VP Sales & Mktg 1999 Nil Nil Nil Nil Nil
STOCK OPTIONS
During the year ended June 30, 1999, no share purchase options were
granted to or exercised by any of our executive officers and no long-term
incentive plans were made to our executive officers. Therefore, no share
purchase options were outstanding during the year ended June 30, 1999. Also, we
do not have a defined benefit or actuarial plan.
At the Annual General Meeting on August 25, 1999, the shareholders
approved a stock option plan, which reserved the granting of 2,000,000 stock
options under the plan. Subsequently, 675,000 share purchase options stock to
acquire common shares were granted to employees. These share purchase options
are exercisable until July 13, 2003 at an exercise price of $1.50 per common
share. The options are exercisable on a cumulative basis at 1/3 of the total
share purchase option granted per year commencing July 13, 2000. On May 15,
2000, 872,500 share purchase options to acquire common shares were granted to
employees. These share purchase options are exercisable until May 15, 2004 at an
exercise price of $0.25 per common share. The options are exercisable on a
cumulative basis at 1/3 of the total share purchase option granted per year
commencing May 15, 2001. On June 27, 2000, 200,000 share purchase options to
acquire common shares were granted to directors. These share purchase options
are exercisable over a three-year period ending on June 27, 2003 at an exercise
price of $0.25 per common share. The options are exercisable immediately.
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As of June 30, 2000 no stock options have been granted to Mr. Phil
Dubious President & CEO, Mr. Ken Bradley Chief Operating Officer & CFO or Mr.
Company. As of June 30, 2000, 250,000 options have been granted to Mr. Jim
MacKay VP Sales & Marketing.
As of June 30, 2000, 1,637,500 stock options are outstanding as
explained in Note 12(b) of the audited consolidated financials, which are
enclosed.
The following table summarizes information concerning options granted
and or paid to named executive officers and directors during the Company's
financial year ended June 30, 2000:
OPTIONS / SAR GRANTS IN LAST FINANCIAL YEAR
INDIVIDUAL GRANTS
% of Total
NUMBER OF Options/
SECURITIES SARs Market Value of
UNDERLYING Granted to Exercise Common Shares
OPTIONS/ Employees or Base Underlying Options
SARs in Fiscal Price Expiration on the Date of Grant
NAME GRANTED Year ($/Sh) Date ($/Common Share)
---- ---------- ---------- -------- ---------- --------------------
Phil Dubois (1) Nil N/A N/A N/A N/A
Ken Bradley (1) Nil N/A N/A N/A N/A
Brent Forgeron (1) Nil N/A N/A N/A
Jim MacKay 250,000 15.3%(2) $0.25 5/15/04 $0.25
Ken Spencer 100,000 6.1%(2) $0.25 6/27/03 $0.25
Bob Smart 50,000 3.0%(2) $0.25 6/27/03 $0.25
Ian Thomas 50,000 3.0%(2) $0.25 6/27/03 $0.25
TOTAL GRANTED 450,000 27.5%(2)
Note (1) there were no options granted by the Company to these specified
executive officers during the year ended June 30, 2000.
Note (2) the percentage of total options granted was based on outstanding
options at June 30, 2000 of 1,637,500.
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The following is a summary of the share purchase options exercised by
the Company's directors and officers during the financial year ended June 30,
2000:
AGGREGATED OPTION/SAR EXERCISES DURING THE LAST
FINANCIAL YEAR END AND FINANCIAL YEAR END OPTION/SAR VALUES
Value of
Unexercised in-the-
Money
Common Shares Unexercised Options/SARs at
Acquired on Aggregate Value Options at Financial Year-End
NAME Exercise (#) Realized ($) Financial year-end ($)
---- ------------ --------------- ------------------ -------------------
Phil Dubois (1) Nil Nil Nil N/A
Ken Bradley (1) Nil Nil Nil N/A
Brent Forgeron (1) Nil Nil Nil N/A
Ken Spencer Nil Nil 100,000 6,000
Bob Smart Nil Nil 50,000 3,000
Ian Thomas Nil Nil 50,000 3,000
Jim MacKay Nil Nil 250,000(2) N/A(2)
TOTAL Nil Nil 450,000 12,000
Note (1) There were no options granted by the Company to these specified
executive officers noted during the year ended June 30, 2000.
NOTE (2) The stock options are exercisable as to 1/3 of the shares on May 15,
2001, as to 1/3 of the shares on May 15, 2002 and as to the remaining 1/3 of the
shares on May 15, 2003, provided Mr. MacKay is an employee of the Company on
those dates.
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The following is a summary of long-term incentive plans granted to the
Company's directors and officers and during the financial year ended June 30,
2000:
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
NUMBER OF Performance
SHARES, UNITS or Other
OR OTHER Period Until
RIGHTS Maturation Threshold Target
NAME # or Pay-Out ($ or #) ($ or #) Maximum ($ or #)
---- ------------- ------------ --------- --------- ----------------
Phil Dubois (1) Nil Nil Nil Nil Nil
Ken Bradley (1) Nil Nil Nil Nil Nil
Brent Forgeron (1) Nil Nil Nil Nil Nil
Ken Spencer Nil Nil Nil Nil Nil
Bob Smart Nil Nil Nil Nil Nil
Ian Thomas Nil Nil Nil Nil Nil
Jim MacKay Nil Nil Nil Nil Nil
NOTE: (1) There were no options granted by the Company to these specified
executive officers during the year ended June 30, 2000.
DESCRIPTION OF 1999 STOCK OPTION PLAN
The Company's 1999 Stock Option Plan (the "Stock Option Plan") was
adopted by the Board of Directors and approved by the Company's shareholders on
August 25, 1999. The purpose of the Plan is to reward the contributions made to
the Company by employees, directors and consultants, to provide such persons
with additional incentive to devote themselves to the future success of the
Company, and to improve the ability of the Company to attract, retain and
motivate individuals upon whom the Company's sustained growth and financial
success depend. Pursuant to the Stock Option Plan, the Company may grant or
issue stock options to directors, officers, advisors and employees of the
Company or any other person or company engaged to provide ongoing services to
the Company.
The Board of Directors determines the terms and provisions of the stock
options granted under the Stock Option Plan. The Stock Option Plan may be
amended at any time by the Board of Directors, although certain amendments may
require shareholder approval. The Board of Directors may terminate the Stock
Option Plan at any time.
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COMPENSATION OF DIRECTORS
Directors receive no compensation for serving as Directors.
EXECUTIVE OFFICERS CONSULTING AGREEMENT
On January 21, 1999, the Company entered into separate Consulting
Agreements with Phil Dubois and Ken Bradley, named executive officers of the
Company. Pursuant to these Consulting Agreements, Mr. Dubois and Mr. Bradley
provide corporate financing and business strategy consulting services to and on
behalf of the Company and each receive compensation of $6,000 Canadian per
month.
Each consulting agreement is for a term of two years. The Company may
renew either or both of the consulting agreements for successive terms of a
duration decided by the Company by written notice to the other party. Absent
agreement by the parties or notice by the Company, each of the Consulting
Agreements automatically renews for a one-year term. Each consulting agreement
contains confidentiality and certain non-compete provisions. Each consulting
agreement provides that the Company determines what corporate benefit plans and
programs Mr. Dubois or Mr. Bradley will participate in and the terms of such
participation.
The Company has the right to terminate Mr. Dubois at any time for legal
cause without notice or payment to him. If the Company terminates the consulting
agreement of Mr. Dubois without cause, the Company is obligated to pay him
$12,000 Canadian for each month remaining in the term of the Consulting
Agreement.
The Company has the right to terminate Mr. Bradley at any time for
legal cause without notice or payment to him. If the Company terminates the
Consulting Agreement of Mr. Bradley without cause, the Company is obligated to
pay him $12,000 Canadian for each month remaining in the term of the Consulting
Agreement.
Either Mr. Dubois or Mr. Bradley may terminate his Consulting Agreement
on three (3) month's prior notice to the Company.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company is composed of three members:
two are independent directors and non-employees; one is a director and member of
executive management. CityXpress directors have no "interlocking relationships
as defined by the SEC. The Compensation Committee sets compensation policies for
officers and directors of the Company.
The Compensation Committee supports the philosophy that the
relationship between pay and individual performance is the cornerstone of the
Company's compensation program. The
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Compensation Committee makes recommendations to CityXpress's Board of Directors
with a view to: (1) ensuring that a competitive and fair total compensation
package is provided the officers in order to recruit and retain quality
personnel, (ii) ensuring that written performance evaluations are made not less
frequently than annually, and (iii) periodically reviewing and revising salary
ranges and total compensation programs for officers using information provided
by current surveys of peer group market salaries for specific jobs and general
industry salary surveys. The Compensation Committee believes that significant
ownership of Common Stock by officers is desirable in that it more closely
aligns the upside and downside risk of return for these individuals with the
Company's shareholders.
BASE SALARIES
In establishing officer salaries and increases, the Compensation
Committee considers individual performance and the relationship of total
compensation to the defined salary market. The decision to increase base pay for
officers is recommended by the Compensation Committee and approved by the Board
of Directors. Information regarding salaries paid by similar software companies
is obtained through formal salary surveys and other means and is used in the
decision process to ensure competitiveness with CityXpress's peers and
competitors.
CityXpress's general philosophy is to provide base pay competitive with
other software companies and Internet application service providers of similar
size in the Pacific Northwest. Annual cash incentives are paid based on the
Company's achievement of defined financial goals.
CHIEF EXECUTIVE OFFICER AND CHIEF OPERATING OFFICER COMPENSATION
CityXpress's Compensation Committee formally reviews the compensation
paid to the Chief Operating Officer and the Chief Executive Officer of the
Company in November of each year. Compensation, including salary and cash
incentives for such officers, is based on various qualitative and quantitative
indicators of corporate and individual performance in determining the level and
composition of compensation. While the Compensation Committee considers more or
less equally such performance measures as growth in revenues, net operating
income and cash flow, it does not apply any specific quantitative formula in
making compensation recommendations. The Compensation Committee also values
achievements that may be difficult to quantify and recognizes the importance of
such qualitative factors. Compensation for the Chief Executive Officer and the
Chief Operating Officer is set by the Board of Directors.
Based on an understanding that CityXpress was a development stage
company and required ongoing financing, the salaries of Mr. Phil Dubois,
President and Chief Executive Officer, and Mr. Ken Bradley, Chief Operating
Officer and CFO, remained unchanged at $48,629 (US) for the year ended June 30,
2000.
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ANNUAL CASH INCENTIVES
CityXpress believes that cash incentives should be utilized to better
align pay with individual and Company performance. Funding for any Cash
Incentive Plan will be dependent on CityXpress first attaining adequate
financing and the Company meeting defined performance thresholds. Once such
thresholds are attained, the Compensation Committee, based in part upon
recommendations from CityXpress's Chief Executive Officer, may approve awards to
those officers who have made superior contributions to Company performance as
measured and reported through established individual performance goals. This
philosophy, when fully implemented, is designed to better control overall
expenses associated with future performance.
LONG-TERM INCENTIVES
The Company maintains its 1999 Employee Stock Option Plan pursuant to
which directors, officers, advisors and employees may be awarded options to
purchase Common Shares. In the year ended June 30, 2000, 250,000 stock options
were awarded to Mr. Jim MacKay, Vice President Sales & Marketing.
$1 MILLION DEDUCTION LIMIT
At this time, the Company is not at risk of losing deductions under the
recently enacted $1 million deduction limit on executive pay established under
Section 162(m) of the Internal Revenue Code of 1986. As a result, the Committee
has not established a policy regarding this limit.
SUMMARY
In summary, CityXpress's executive compensation for the fiscal year
ended June 30, 2000 was based on an understanding that the Company was a
development stage company that lacked the resources to competitively compensate
its executive officers. The Compensation Committee recognizes that the
compensation of the Company's Chief Executive Officer, Chief Operating Officer
and Vice President Sales and Marketing is significantly less than salaries paid
to executive officers in comparable companies of similar size.
This concludes the report of the Compensation Committee.
Ken Bradley Ian Thomas Ken Spencer
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
GENERAL
Pursuant to a share purchase agreement dated January 7, 1999, the
shareholders of WelcomeTo sold their 100% interest in WelcomeTo to
CityXpress.com for 8,510,000 shares in
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CityXpress.com which represented a controlling interest of approximately 62.5%.
For accounting purposes this transaction was considered the recapitization of
WelcomeTo and the acquisition of CityXpress.com by WelcomeTo. For a more
detailed description of this transaction see Item 1 "Description of Business -
Corporate History".
On January 27, 1999, CityXpress.com acquired all of the issued and
outstanding shares of Xceedx by exchanging one share of CityXpress.com for each
share of common stock of Xceedx. As a result CityXpress.com issued 6,250,000
shares of common stock in a private offering under section 4(2) of the
Securities Act. For a more detailed description of this transaction see Item 1
"Description of Business - Corporate History".
The following table details the number of shares issued to the
following executive officers resulting from theses two purchase agreements:
Number of
NAME Acquisition date Company Shares
---- ---------------- ------------- -----------
Phil Dubois January 27, 2000 Xceedx 2,561,250
Technologies
Ken Bradley January 27, 2000 Xceedx 2,561,250
Technologies
Brent Forgeron January 7, 1999 WelcomeTo Search 1,130,000
Except for (a) the issuance of shares of its stock to Mr. Force on
pursuant to the Acquisition Agreement between WelcomeTo Search Engine, Inc. and
the Company and the issuance of shares of its stock to Messrs. Dubois and
Bradley pursuant to the Acquisition Agreement between Xceedx Technologies, Inc.
and the Company, (b) the compensation described herein, and (C) advances to and
by certain officers to cover expenses, all of which were reimbursed or repaid
without interest, no director, executive officer, holder of ten percent of the
Company's outstanding common stock, or any relative or spouse of any of the
foregoing persons, or any relative of such spouse, who has the same house as
such person or who is a director or officer of any parent or subsidiary of the
Company, to the Company's knowledge, had a material interest either direct or
indirect, in any particular transaction or series of transactions to which the
Company or any subsidiary was a party, during the two fiscal years ended June
30, 1999 and June 30, 2000.
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SHAREHOLDER LOANS
During, the year ended June 30, 2000, the Company entered into
unsecured shareholder loan agreements for $252,900 with the Company's President
& CEO and Chief Operating Officer & CFO. As of June 30, 2000, the installment
and demand shareholder loans have various interest rates attached to them as
detailed below:
NAME Loan Description Annual Interest Outstanding
Rate at June 30, 2000 Amount
- --------- ------------------------- ---------------------------- --------------
Phil Dubois Loan payable equal Interest rate of 10% $ 84,300
monthly installments of
$755
Phil Dubois Loan payable on demand CIBC Visa interest rate of $ 16,860
19.5%
Phil Dubois Loan payable on demand Scotia McLeod interest rate $ 16,860
of 9.5%
TOTAL
PHIL DUBOIS $118,020
Ken Bradley Loan payable equal monthly Interest rate of 10% $ 84,300
installments of $755
Ken Bradley Loan payable on demand Interest rate of 4.5% $ 33,720
Ken Bradley Loan payable on demand TD Bank select line interest $ 16,860
rate of 10.25%
TOTAL
KEN BRADLEY $134,880
TOTAL SHAREHOLDER LOANS $252,900
EXECUTIVE OFFICER WARRANTS
On June 13, 2000, the Company granted 541,600 warrants to two of the
Company's executive officers as consideration for their guarantee of the demand
installment loan with the CIBC bank and for two shareholder loans totaling
$168,600 which was obtained by securing a mortgage on personal property owned by
the two executive officers. The details of the warrant grant are listed below as
of June 30, 2000:
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NAME Warrant Grant Warrant Price Warrant Warrant Expiry
Date $US Grant Date
Amount
- ------------------ -------------- ------------- ------- --------------
Phil Dubois June 13, 2000 $0.25 270,800 June 13, 2002
Ken Bradley June 13, 2000 $0.25 270,800 June 13, 2002
TOTAL 541,600
PERFORMANCE GRAPH
The following line-graph compares the percentage total return of the
Company's common stock from November 1998 to September 2000 with that of the
NASDAQ Computer Index (includes over 600 computer hardware and software
companies that furnish computer programming and data processing services, and
firms that produce computers, office equipment and electronic
components/accessories) and the Russell 2000 Index (measures the performance of
2,000 small-cap stocks). Total return represents the Change in stock price over
indicated period.
PERFORMANCE
---------------------------------------
CITYXPRESS NASDAQ RUSSELL NASDAQ NASDAQ RUSSELL NASDAQ
SHARE PRICE COMPUTER 2000 COMPOSITE MONTH CYXP COMPUTER 2000 COMPOSITE
- ----------- -------- ------- --------- -------- ------ -------- ------- ---------
3.000 857.76 421 1,771.39 10/31/98 100.00 100.00 100.00 100.00
2.875 980.46 421 1,949.54 11/30/98 95.83 114.30 100.00 110.06
2.250 1,134.19 421.96 2,192.69 12/31/98 75.00 132.23 100.23 123.78
6.500 1,371.8 427.22 2,505.89 1/31/99 216.67 159.93 101.48 141.46
4.187 1,193.77 392.26 2,288.03 2/28/99 139.57 139.17 93.17 129.17
5.187 1,305.01 397.63 2,461.4 3/31/99 172.90 152.14 94.45 138.95
3.843 1,298.83 432.81 2,542.85 4/30/99 128.10 151.42 102.81 143.55
3.000 1,234.92 438.68 2,470.52 5/30/99 100.00 143.97 104.20 139.47
2.468 1,386.34 438.68 2,683.12 6/30/99 82.27 161.62 104.20 151.47
2.562 1,365.12 457.67 2,638.49 7/31/99 85.40 159.15 108.71 148.95
1.812 1,494.58 457.67 2,739.35 8/31/99 60.40 174.24 108.71 154.64
1.562 1,503.79 457.67 2,746.16 9/30/99 52.07 175.32 108.71 155.03
1.375 1,613.72 457.67 2,966.43 10/31/99 45.83 188.13 108.71 167.46
0.750 1,834.04 457.67 3,336.16 11/30/99 25.00 213.82 108.71 188.34
0.375 2,325.4 457.67 4,069.31 12/31/99 12.50 271.10 108.71 229.72
0.850 2,212.47 496.23 3,940.35 1/31/00 28.33 257.94 117.87 222.44
0.700 2,667.03 577.71 4,696.69 2/29/00 23.33 310.93 137.22 265.14
0.515 2,701.27 539.09 4,572.83 3/31/00 17.17 314.92 128.05 258.15
0.312 2,253.9 506.25 3,860.66 4/30/00 10.40 262.77 120.25 217.95
0.300 1,975.68 476.18 3,400.91 5/31/00 10.00 230.33 113.11 191.99
0.320 2,343.97 517.23 3,966.11 6/30/00 10.67 273.27 122.86 223.90
0.160 2,243.84 500.64 3,766.99 7/31/00 5.33 261.59 118.92 212.66
0.350 2,529.99 500.64 4,206.35 8/31/00 11.67 294.95 118.92 237.46
0.188 2,123.49 500 3,672.82 9/30/00 6.27 247.56 118.76 207.34
10/31/98 6/30/99 6/30/00 9/30/00
-------- ------- ------- -------
CityXpress.com Corp 100 82 11 6
Nasdaq Computer Index 100 162 273 248
Russell 2000 100 104 123 119
RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION
OF EACH OF THE ABOVE LISTED NOMINEES AS DIRECTORS.
ITEM 2
PROPOSAL TO AMEND THE COMPANY'S 1999 STOCK OPTION PLAN
The Company's 1999 Stock Option Plan is a principal component of the
Company's compensation program. Stock options tie compensation directly to an
increase in shareholder value, specifically the market price of the Common
Stock. In this way, options further align the interests of directors, officers,
advisors and employees of the Company and shareholders.
SUMMARY OF THE AMENDMENT TO THE COMPANY'S 1999 STOCK OPTION PLAN
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In order to continue and to enhance the effectiveness of the 1999 Stock
Option Plan, the Board of Directors has amended the 1999 Stock Option Plan,
subject to approval by shareholders at the Annual Meeting.
Prior to the amendment to the 1999 Stock Option Plan, the maximum
number of shares of Common Stock that could be issued upon the exercise of
options granted under the Plan is 2,000,000. Options to purchase less than
362,500 shares remain available for grant under the Plan.
The amendment increases the number of shares of Common Stock which may
be issued upon the exercise of options from 2,000,000 shares to 3,000,000
shares.
SHAREHOLDER APPROVAL
Approval of the amendment to the 1999 Stock Option Plan requires the
affirmative vote of a majority of the shares of Common Stock present in person
or represented by proxy and entitled to vote at the Annual Meeting.
RECOMMENDATION
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE TO APPROVE THE
AMENDMENT TO THE COMPANY'S 1999 STOCK OPTION PLAN.
ITEM 3
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
PROPOSAL
The Board of Directors has selected Ernst & Young LLP to be the
independent auditors of the Company for the fiscal year ending June 30, 2001,
and proposes that the shareholders ratify this selection at the Annual Meeting.
Ernst & Young LLP also acted as independent auditors of the Corporation for the
2000 fiscal year.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will have the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
SHAREHOLDER APPROVAL
Ratification of the selection of Ernst & Young LLP requires the
affirmative vote of a majority of the shares of Common Stock present in person
or represented by proxy and entitled to vote at the Annual Meeting.
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RECOMMENDATION
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THIS
PROPOSAL.
ADDITIONAL INFORMATION - OTHER MATTERS
The Board of Directors does not know of any matters to be presented at
the Annual Meeting other than as set forth in the Notice of Annual Meeting of
Shareholders. However, it is intended that proxies solicited will be voted on
any matters that may properly come before the Annual Meeting in the discretion
of the persons named in the proxy.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
During the year ended June 30, 2000, Form 3's for Mr. Dubois, Mr.
Bradley, Mr. Forgeron, Mr. Mackay, Mr. Spencer, Mr. Smart and Mr. Thomas were
not timely filed.
ANNUAL REPORT ON FORM 10K-SB
A copy of the Company's Annual Report on Form 10-K, including financial
statements and schedules, filed with the Securities and Exchange Commission for
the fiscal year ended June 30, 2000, is included in the Annual Report to
Shareholders which accompanies these proxy materials. Copies of any exhibit(s)
to the Form 10-K will be furnished on request and upon the payment of the
Company's expenses in furnishing such exhibit(s). Any request for exhibits
should be in writing addressed to Ken Bradley, Chief Operating Officer,
CityXpress.com, Corp., Suite 200, 1727 West Broadway, Vancouver, British
Columbia V6J 4W6.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Proposals of shareholders of the Company intended to be presented at
the 2001 Annual Meeting of Shareholders must be received by the Company at its
principal executive offices on or before June 1, 2001 in order to be included in
the Company's Proxy Statement and Proxy for the 2001 Annual Meeting of
Shareholders. Such proposals must conform to the requirements set forth in the
Bylaws of the Company and the rules and regulations of the Securities and
Exchange Commission. The submission of a shareholder proposal does not guarantee
that it will be included in the Company's Proxy Statement and Proxy.
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PROXY
CITYXPRESS.COM, CORP.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS - November 29, 2000
The undersigned shareholder of CityXpress.com, Corp. (the "Company"),
revoking all previous proxies, hereby appoints Phil Dubois and Ken Bradley, and
each of them acting individually, as the attorneys and proxies of the
undersigned, with full power of substitution and resubstitution, to vote all
shares of Common Stock of the Company which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Shareholders of the Company,
to be held at 11:00 a.m., local time, at the Century Plaza Hotel, 1015 Burrard
Street, Vancouver, BC, Canada, V6Z 1Y5 on November 29, 2000, and any adjournment
or postponement thereof. Said proxies are authorized and directed to vote as
indicated with respect to the matters outlined herein.
(Continued and to be voted, signed and dated on reverse)
Please mark your votes as in this example: X
---
1. ELECTION OF DIRECTORS
For All Nominees
---
Ken Bradley
Phil Dubois
Bob Smart
Ken Spencer
Ian Thomas
Withhold All Nominees
---
Ken Bradley
Phil Dubois
Bob Smart
Ken Spencer
Ian Thomas
For Nominees, except vote withheld from following nominee(s)
---
Ken Bradley
---
Phil Dubois
---
Bob Smart
---
Ken Spencer
---
Ian Thomas
---
2. PROPOSAL TO APPROVE THE AMENDMENT TO THE COMPANY'S 1999 STOCK
OPTION PLAN.
FOR AGAINST ABSTAIN
---- ---- ----
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS FOR THE COMPANY FOR THE 2001 FISCAL
YEAR.
FOR AGAINST ABSTAIN
---- ---- ----
4. I WILL ATTEND THE ANNUAL MEETING.
YES NO
---- ----
This proxy is solicited on behalf of the Board of Directors, unless
otherwise specified, the shares will be voted "For" all nominees, "For" the
proposal to approve the amendment to the 1999 Stock Option Plan and "For" the
ratification of the appointment of Ernst & Young LLP as independent auditors for
the Company for the 2001 fiscal year. This proxy delegates discretionary
authority to the proxies to vote with respect to any other business which may
properly come before the Meeting or any adjournment or postponement thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
MEETING AND THE COMPANY'S PROXY STATEMENT.
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
- ------------------------------------
Name (Print)
SIGNATURE DATE , 2000
----------------------------- -----------------
- ------------------------------------
Name (Print)
SIGNATURE DATE , 2000
---------------------------- ------------------
NOTE: PLEASE SIGN THIS PROXY EXACTLY AS NAME(S) APPEAR IN ADDRESS. WHEN SIGNING
AS ATTORNEY-IN-FACT, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE ADD
YOUR TITLE AS SUCH. IF STOCKHOLDER IS A CORPORATION, PLEASE SIGN IN FULL
CORPORATE NAME BY DULY AUTHORIZED OFFICER OR OFFICERS AND AFFIX THE CORPORATE
SEAL. WHEN STOCK IS HELD IN THE NAME OF TWO OR MORE PERSONS, ALL SUCH PERSONS
SHOULD SIGN.