NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 2000
TO THE SHAREHOLDERS OF NETVOICE TECHNOLOGIES CORPORATION:
NOTICE HEREBY IS GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of NetVoice Technologies Corporation, a Nevada corporation (the
"Company") will be held at 9:00 a.m., on May 19, 2000, at The Westin
Galleria, 3rd Floor, Ballroom III, 13340 Dallas Parkway, Dallas, TX 75240,
and at any and all adjournments thereof, for the purpose of considering and
acting upon the following matters:
1. To elect 3 Directors of the Company;
2. To vote on a proposal to approve the NetVoice Technologies
Corporation 2000 Stock Plan (the "Plan"); and
3. To transact such other business as may be properly brought before
the meeting and any adjournments thereof.
This Proxy Statement and the accompanying Proxy Card will be mailed to
the Company's Shareholders on or about April 27, 2000.
Only holders of record of the Company's Common Stock at the close of
business on April 24, 2000 will be entitled to notice of and to vote at the
Meeting or at any adjournment or adjournments thereof.
A majority of the outstanding shares of Common Stock of the Company
must be represented at the meeting to constitute a quorum. Therefore, all
shareholders are urged either to attend the meeting or to be represented by
proxy. If a quorum is not present at the meeting, a vote for adjournment
will be taken among the shareholders present or represented by proxy. If
a majority of the shareholders present or represented by proxy vote for
adjournment, it is our intention to adjourn the meeting until a later date
and to vote proxies received at such adjourned meeting(s).
All Shareholders, whether or not they expect to attend the Meeting in
person, are urged to sign and date the enclosed Proxy and return it
promptly in the enclosed postage-paid envelope which requires no additional
postage if mailed in the United States. The giving of a proxy will not
affect your right to vote in person if you attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS.
William Bedri
Secretary
Dallas, Texas
April 27, 2000
PROXY STATEMENT
OF
NETVOICE TECHNOLOGIES CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 19, 2000
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
by our Board of Directors (our "Board" or our "Board of Directors") of
NetVoice Technologies Corporation ("us", "our" or "we") of proxies to be
voted at our Annual Meeting of Shareholders (the "Annual Meeting") to be
held on May 19, 2000 at 9:00 a.m. at The Westin Galleria, 3rd Floor,
Ballroom III, 13340 Dallas Parkway, Dallas, TX 75240, and at any
adjournment thereof. Each shareholder of record at the close of business
on April 24, 2000 of shares of our Common Stock, par value $0.001 per share
(the "Common Stock"), will be entitled to one vote for each share so held.
As of April 24, 2000, there were 13,416,600 shares of Common Stock issued
and outstanding.
Shares represented by properly executed proxy cards received by us at
or prior to the Annual Meeting will be voted according to the instructions
indicated on the proxy card. Unless contrary instructions are given, the
persons named on the proxy card intend to vote the shares so represented
FOR (i) the election of nominees for directors; and (ii) the approval of
the 2000 Stock Plan.
As to any other business which may properly come before the meeting,
the persons named on the proxy card will vote according to their judgment.
Any person signing and returning the enclosed Proxy may revoke it at any
time before it is voted by giving written notice of such revocation to our
Secretary, or by voting in person at the Meeting. Any written notice
revoking a proxy should be sent to: Secretary, NetVoice Technologies
Corporation, 13747 Montfort Drive, Suite 250, Dallas, TX 75240. The
expense of soliciting proxies, including the cost of preparing, assembling
and mailing this proxy material to Shareholders, will be borne by the
Company. It is anticipated that solicitations of proxies for the Meeting
will be made only by use of the mails; however, the Company may use the
services of its Directors, Officers and Employees to solicit proxies
personally or by telephone without additional salary or compensation to
them. Brokerage houses, custodians, nominees and fiduciaries will be
requested to forward the proxy soliciting materials to the beneficial
owners of the Company's shares held of record by such persons, and the
Company will reimburse such persons for their reasonable out-of-pocket
expenses incurred by them in that connection. This Proxy Statement and the
enclosed proxy card are expected to be first sent to our shareholders on or
about April 27, 2000.
All shares represented by valid proxies will be voted in accordance
therewith at the Meeting. Shares not voting as a result of a proxy marked
abstain will be counted as part of total shares voting in order to
determine whether or not a quorum has been achieved at the Meeting. If a
quorum is not present at the meeting, a vote for adjournment will be taken
among the shareholders present or represented by proxy. If a majority of
the shareholders present or
2
represented by proxy, vote for adjournment, it is our intention to adjourn
the meeting until a later date and to vote proxies received at such
adjourned meeting(s).
Shares will not be counted as part of the vote on any business at the
Meeting on which the Shareholder has abstained.
The Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1999 is being mailed simultaneously to the Company's
Shareholders, and contains financial information constituting a part of
this proxy soliciting materials.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the
Company's $0.001 par value voting common stock, with each share entitled to
one vote. Only Shareholders of record at the close of business on April
24, 2000 are entitled to notice of and to vote at the Meeting or any
adjournment thereof. On April 24, 2000 the Company had 13,416,600 shares
of its $0.001 par value voting common stock outstanding, each of which is
entitled to one vote on all matters to be voted upon at the Meeting,
including the election of Directors. No fractional shares are presently
outstanding.
A majority of the Company's outstanding voting common stock
represented in person or by proxy shall constitute a quorum at the Meeting.
The nominees for director receiving the most votes for their election will
be elected director, providing a quorum is present. The affirmative vote
of a majority of shares represented at the meeting, providing a quorum is
present, is necessary to approve the 2000 Stock Plan. Abstentions and
broker non-votes have no effect on the election of directors or the vote to
approve the Plan.
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD OF DIRECTORS
ELECTION OF DIRECTORS
(Proposal 1 of the Proxy)
Our Directors are elected annually by the shareholders to serve until
the next Annual Meeting of Shareholders and until their respective
successors are duly elected. Our Articles of Incorporation, as amended,
provide that the number of members of our Board of Directors shall be not
less than one and not more than nine. Our current number of Directors is
three. Our Board is recommending that our three current directors be re-
elected. If any nominee becomes unavailable for any reason, a substitute
nominee may be proposed by our Board and the shares represented by proxy
will be voted for any substitute nominee. We have no reason to expect that
any nominee will become unavailable. Assuming the presence of a quorum,
the affirmative vote of the holders of a majority of the outstanding shares
of Common Stock represented in person or by proxy at the Annual Meeting is
required for the election of directors.
At the Annual Meeting, the shares of Common Stock represented by
proxies will be voted in favor of the election of the nominees named below
unless otherwise directed.
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NOMINEES FOR ELECTION AS DIRECTORS TO SERVE
UNTIL NEXT ANNUAL MEETING
The following information with respect to Directors and Executive
Officers is furnished pursuant to Item 401(a) of Regulation S-B.
Name Age Position
- ---- --- --------
Jeffrey Rothell 37 Director, President and Chief Executive
Officer
William Bedri 60 Director and Secretary
Garth Cook 34 Director, Chief Financial Officer and
Treasurer
JEFFREY ROTHELL, PRESIDENT, CEO AND DIRECTOR. Mr. Rothell has been
NVT's President and the Chief Executive Officer since August 1, 1999 and
the Company's President since January 2000 and a Director since March 2000.
Mr. Rothell has 15 years of operations and marketing experience in
telecommunications companies. From 1989 to 1997, Mr. Rothell served as
president of Security Telecom Corp. (a $20 million corporation). In 1997 he
partnered in the sale of Security Telecom to Evercom Inc., which became the
largest inmate telephone provider in the United States with $225 million in
annual revenue in 1998, retaining Security Telecom as the corporate hub for
a venture capital roll-up of the correctional institution
telecommunications business. Mr. Rothell's experience encompasses
planning, design, development and management, operations management,
operational integration of merger & acquisitions, sales and marketing,
product management and software design and development. Several of the
companies to which Mr. Rothell is an affiliate may also compete with the
Company now, or in the future, in the Internet telephony business. Mr.
Rothell holds 600,000 shares of Common Stock and no options to acquire any
additional shares. Mr. Rothell devotes 100% of his time to the Company.
WILLIAM BEDRI, DIRECTOR AND SECRETARY. Mr. Bedri has been a Director
of the Company since August 13, 1998 and the Secretary since January 2000.
Mr. Bedri has 25 years of experience in sales and marketing management in
the telecommunications and computer industries. From January 1995 to August
1998, Mr. Bedri was with Brooks Fiber Communication as Director of National
Accounts for Resale Services in their Western Region. From 1988 to 1995,
Mr. Bedri was with ComSystems as Branch Manager of the Los Angeles and San
Fernando Valley offices. In 1984, Mr. Bedri was with Digital Computer
Graphic (DCG) as partner and Vice President of Sales and Marketing. DCG
sold graphic design computers to the architectural and building industries
in the United States. Mr. Bedri spent 10 years with Western Union in
marketing and sales management for Telex and TWX services. Mr. Bedri
received a Bachelor of Science Degree from Rutgers University in 1976. Mr.
Bedri holds 800,000 shares of Common Stock and options to acquire 600,000
additional shares. Mr. Bedri devotes approximately 50% of his time to the
Company.
GARTH COOK, CFO, TREASURER AND DIRECTOR. Mr. Cook has been the Chief
Financial Officer and Treasurer since August 1, 1999 and a Director since
March 2000. Mr. Cook is a Certified Public Accountant with separate
bachelor degrees in finance and accounting from University of New Orleans,
awarded in 1988. He previously worked for Deloitte and Touche LLP where he
specialized in the audits of publicly traded companies. In 1993, he left
Deloitte and Touche to become regional controller for Chemfix Technologies
Inc. where he was
4
responsible for the completion of public filings and budgets. In 1994, Cook
joined the telecommunications industry as CFO of a company focusing on
international arbitrage and prepaid calling services which was sold in
1998. He has extensive experience in the telecommunications industry from
financial, sales and operational perspectives, and extensive experience in
the public markets. Several of the companies to which Mr. Cook is an
affiliate may also compete with the Company now, or in the future, in the
Internet telephony business. Mr. Cook beneficially owns 600,000 shares of
Common Stock and no options. Mr. Cook devotes 100% of his time to the Company.
There is no family relationship among or between any of our Directors.
All directors will hold office until the next annual meeting of
shareholders.
All of our officers hold office at the discretion of our Board of
Directors. There is no arrangement or understanding among or between any
such officer or any person pursuant to which such officer is to be selected
as one of our officers.
RESIGNATION OF DIRECTORS
On March 13, 2000, the Company was notified that the state of
Pennsylvania had entered a Cease and Desist Order on December 7, 1999
against William D. Yotty and indirectly against James Chambas as a Director
of Paystar Communications, Inc. The Cease and Desist Order alleged that
these individuals and others were selling unregistered securities in the
state of Pennsylvania and elsewhere. Although Messrs. Yotty and Chambas
intend to vigorously defend this action, they deemed it to be in the best
interests of the Company to resign as Directors of the Company and
discontinue any direct relationship with the Company except as shareholders
as of March 20, 2000.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
ELECTION OF EACH OF THE NOMINEES SET FORTH ABOVE.
BOARD OF DIRECTORS AND COMMITTEES
During fiscal year 1999 our Board of Directors met on 5 occasions
either in person or by phone or in lieu thereof acted by consent.
We intend to establish an audit committee, a compensation committee
and a technology committee. It is anticipated the initial members of the
compensation committee will be Messrs. Bedri and Cook. The audit committee
will be initially composed of Mr. Rothell, assisted by Mr. Garth Cook, as
our Chief Financial Officer, and the members of the technology committee
will be Messrs. Bedri, Rothell and McEvilly. The audit committee will
oversee the retention, performance and compensation of the independent
public accountants, and the establishment and oversight of such systems of
internal accounting and auditing control as it deems appropriate. The
compensation committee will review and approve the compensation of our
executive officers, including payment of salaries, bonuses and incentive
compensation, determine our compensation policies and programs, and
administer our stock option plans. The technology committee will review
and evaluate current technology as it relates to the Company's business.
5
We anticipate that we will add two additional independent members to our
Board and the committees during the upcoming fiscal year.
COMPENSATION OF DIRECTORS
The Company had no arrangements pursuant to which any Director of the
Company was compensated during the year ended December 31, 1999, for
services as a Director. All Directors are reimbursed for reasonable
expenses incurred in connection with their attendance at Board meetings.
Members of the Board of Directors have been granted options and have
received shares of our Common Stock as described elsewhere.
APPROVAL OF 2000 STOCK PLAN
(Proposal 2 of the Proxy)
The 2000 Stock Plan is an important element of the Company's program
to align employee motivation with our shareholders' interest and to provide
appropriate equity compensation to employees. The following is a summary
of the plan's principal features. A copy of the plan is printed as
Appendix A to this Proxy Statement.
SUMMARY OF THE 2000 STOCK PLAN
PURPOSE. The purpose of the 2000 Stock Plan (the "Plan") is to enable
the Company and its Subsidiary to retain and attract executives, employees,
consultants and non-employee directors who contribute to the Company's
success by their ability, ingenuity and industry, and to enable such
individuals to participate in the long-term success and growth of the
Company by giving them a proprietary interest in the Company.
ELIGIBILITY. Under the Plan, Officers, employees, non-employee
Directors and Consultants of the Company or its Subsidiary who are
responsible for or contribute to the management, growth and/or
profitability of the business of the Company and its Subsidiary are
eligible to be granted Stock Option awards under the Plan. The Plan
permits the granting of Options that qualify for treatment as incentive
stock options under Code Section 422 ("Incentive Stock Options") and
Options that do not qualify as Incentive Stock Options ("Non-Qualified
Stock Options"). Only officers (who are employees) and other employees
shall be eligible to receive Incentive Stock Options.
STOCK SUBJECT TO PLAN. The total number of shares of Stock reserved
and available for distribution under the Plan is 2,000,000. Such shares
may consist, in whole or in part, of authorized and unissued shares and
treasury shares, including shares which may become treasury shares as a
result of purchases of outstanding shares which may be made from time to
time by the Company. In the event of certain changes in the Company's
capitalization or structure, an appropriate adjustment will be made to the
number, kind or exercise price of shares as to which Options may thereafter
be granted and as to the number of shares covered by unexercised
outstanding Options. If any shares that have been optioned under this Plan
cease to be subject to Options, are forfeited or such award otherwise
terminates without Stock being issued or in the event that shares issued
under the Plan are acquired by the Company pursuant to a right of
6
repurchase or right of first refusal, such shares shall be available for
distribution in connection with future awards under the Plan.
ADMINISTRATION. The Plan will be administered by the Board of
Directors or by a Committee of not less than two directors, who shall be
appointed by the Board of Directors of the Company and who shall serve at
the pleasure of the Board. The Committee shall have the power and
authority to grant Stock Options to eligible persons, pursuant to the terms
of the Plan. The Committee shall have the authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing the
Plan as it shall deem advisable; to interpret the terms and provisions of
the Plan and any award issued under the Plan; and to otherwise supervise
the administration of the Plan. All decisions made by the Committee
pursuant to the provisions of the Plan shall be final and binding on all
persons, including the Company and Plan participants.
TERMS OF OPTIONS. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of
grant and may not be less than 85% of the Fair Market Value of the Stock on
the date of the grant of the Option. In no event shall the option price
per share of Stock purchasable under an Incentive Stock Option be less than
100% of the Fair Market Value of the Stock on the date of the grant of the
option. If a participant owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than
10% of the combined voting power of all classes of stock of the Company or
any Parent Corporation or Subsidiary, the option price shall be no less
than 110% of the Fair Marker value of the Stock on the date the option is
granted.
Stock Options shall be exercisable at such times or times as
determined by the Committee at or after the grant. If the participant is
not an officer, director or Consultant of the Company, the Options shall
become exercisable at least as rapidly as 20% per year over the five year
period commencing on the date of the grant.
Stock Options may be exercised in whole or in part at any time during
the option period by giving written notice of exercise to the Company
specifying the number of shares to be purchased. Such notice shall be
accompanied by payment in full of the purchase price, either be certified
or bank check, or by any other form of legal consideration deemed
sufficient by the Committee and consistent with the Plan's purpose and
applicable law.
No Stock Option shall be transferable by the optionee otherwise than
by will or by the laws of descent and distribution, and all Stock Options
shall be exercisable, during the optionees's lifetime, only by the optionee.
The term of each Stock Option shall be fixed by the Committee, but no
Incentive Stock Option shall be exercisable more than ten years after the
date the option is granted. If an employee owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code) more than
10% of the combined voting power of all classes of stock of the Company or
any Parent Corporation or Subsidiary and an Incentive Stock Option is
granted to such employee, the term of such option shall be no more than
five years from the date of the grant.
AMENDMENT AND TERMINATION. Unless earlier terminated by the Board,
the Plan will terminate ten years after the effective date. The Board may
at any time modify or discontinue the Plan. No amendment or modification
shall be made (i) which would impair the rights of an
7
optionee or participant under a Stock Option theretofore granted or which
would cause an optionee's or participant's existing Incentive Stock Option
to no longer qualify as an Incentive Stock Option, without the optionee's
or participant's consent, or (ii) which, without approval of the
shareholders of the Company, would cause the Plan to no longer comply with
(A) the rules promulgated by the Securities and Exchange Commission under
authority granted in Section 16 of the Securities Exchange Act of 1934, as
amended, (B) Section 422 of the Code or (C) any other statutory or
regulatory requirements.
FEDERAL INCOME TAX CONSEQUENCES
Based on current provisions of the Code and of the regulations issued
thereunder, the anticipated federal income tax consequences with respect to
Options granted under the Plan are described below. However, participants
should consult with their own tax advisors with respect to the tax
consequences (both state and federal) of participation in the Plan.
The 2000 Stock Plan is not a tax-qualified retirement plan under Code
Section 401(a) nor is it subject to the Employee Retirement Income Security
Act of 1974 ("ERISA").
INCENTIVE STOCK OPTIONS. No taxable income is recognized by an
employee upon the grant or exercise of the Incentive Stock Option.
Correspondingly, the Company is not entitled to an income tax deduction as
the result of the grant or exercise of an Incentive Stock Option. Any gain
or loss resulting from the sale of shares of Common Stock acquired upon
exercise of an Incentive Stock Option will be long-term capital gain or
loss if the sale is made after the later of (1) two years from the date of
its grant or (2) one year from the date of its exercise ("Exercise Date").
If the Common Stock is sold to another person prior to the expiration
of the holding periods described in the above sentence ("Disqualifying
Disposition"), the employee will generally recognize ordinary income in the
year of the sale in an amount equal to the difference between (1) the
exercise price of the option (the "Option Price"), and (2) the lesser of
the fair market value of the shares of Common Stock on (a) the Exercise
Date or (b) the date of the Disqualifying Disposition. The Company will be
entitled to an income tax deduction equal to the amount taxable to the
employee. Any excess gain recognized by the employee upon the
Disqualifying Disposition would be taxable as a capital gain, either as
long-term or short-term depending upon whether the shares of Common Stock
have been held for more than one year prior to the Disqualifying Disposition.
The amount by which the fair market value of the Common Stock on the
Exercise Date exceeds the Option Price constitutes an item of tax
preference that may be subject to alternative minimum tax in the year that
the Incentive Stock Option is exercised, depending on the facts and
circumstances.
NON-QUALIFIED STOCK OPTIONS. No taxable income will be recognized by
the employee and the Company will not be entitled to a deduction at the
time of the grant of a Non-Qualified Stock Option. Upon exercise of a Non-
Qualified Stock Option, the employee generally will recognize ordinary
income and the Company will be entitled to an income tax deduction in the
amount by which the fair market value of the shares of Common Stock issued
to the employee at
8
the time of the exercise exceeds the Option Price. This income constitutes
"wages" with respect to which the Company is required to deduct and
withhold federal income tax.
Upon the subsequent disposition of shares of Common Stock acquired
upon the exercise of a Non-Qualified Stock Option, the employee will
recognize capital gain or loss in an amount equal to the difference between
the proceeds received upon disposition and the fair market value of the
shares on the Exercise Date. If the shares have been held for more than
one year at the time of the disposition, the capital gain or loss will be
long-term.
TAX RATES. The current maximum federal tax rate for long-term capital
gain is 20%. The current marginal rate for ordinary federal income tax can
be as much as 39.6%. Short-term capital gains are generally taxed as
ordinary income.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN
FAVOR OF APPROVING THE 2000 STOCK PLAN.
EXECUTIVE OFFICERS, COMPENSATION AND OTHER INFORMATION
Set forth below in the table are the names, ages and current offices
held by all executive officers of the Company.
Name Age Position
- ---- --- --------
William Bedri 60 Secretary and Director
Jeffrey Rothell 37 President, Chief Executive Officer and
Director
Garth Cook 34 Chief Financial Officer, Treasurer and
Director
Executive officers of the Company are elected by and serve at the
discretion of the Board. None of the executive officers has any family
relationship to any nominee for Director or to any other executive officer
of the Company. A description of the business experience of the Company's
executive officers is set forth under Nominees For Election As Directors To
Serve Until Next Annual Meeting. A brief description of the business
experience of key employees is set forth below.
KEY EMPLOYEES
MAYA CROTHERS, VICE PRESIDENT OF MARKETING AND BUSINESS DEVELOPMENT OF
NVT. Ms. Crothers has been Vice President of Marketing and Business
Development of our subsidiary NVT since August 15, 1999. Ms. Crothers
earned her undergraduate degree in Mechanical Engineering and International
Studies from the University of Michigan and went on to join Westinghouse
Electric's Power Generation Business Unit. In 1993 she became the Regional
Sales Engineer for the Houston office where she negotiated over $100 million
in power equipment sales and was awarded the Westinghouse Market Leader Award
for Sales & Marketing efforts. She completed her masters in business
administration at the Wharton Business School in 1996, when she began work
as a consultant to Bain & Company until becoming a full time employee of the
Company. Ms. Crothers has experience in several industries and a variety
9
of initiatives including marketing and sales strategies, engineering and
process design, acquisition feasibility, due diligence, complexity reduction,
customer loyalty and supplier management. Several of the companies to which
Ms. Crothers is an affiliate may also compete with the Company now, or in the
future, in the Internet telephony business. Ms. Crothers holds 120,000
shares of Common Stock and no options to acquire additional shares.
DAVE MCEVILLY, VICE-PRESIDENT OF INFORMATION TECHNOLOGY OF NVT. Mr.
McEvilly has been Vice-President of Information Technology of our
subsidiary NVT since August 15, 1999. Mr. McEvilly has numerous
certificates in Computer Science and has an extensive background in network
and data. From 1989-1991, Mr. McEvilly served as the Software
Configuration Manager for Intellicall's Vending Department where he oversaw
all service installation and support and configuration management for call
routing and billing. In 1991, he became the Director of Software for ATMC.
In 1993 Mr. McEvilly joined Security Telecom as Director of Information
Services to develop the LEMS (Law Enforcement Management Systems) product
and was responsible for product development, video imaging and digital
solutions for the Corrections Industry. In 1997, when Security Telcom was
purchased by Evercom, Inc., Mr. McEvilly was responsible for all corporate
infrastructure, WAN connectivity, data management, application and
development management for back office systems, integrating technologies
across 14 acquisitions and management of 150 local areas of LEMS. Several
of the companies to which Mr. McEvilly is an affiliate may also compete
with the Company now, or in the future, in the Internet telephony business.
Mr. McEvilly holds 100,000 shares of Common Stock and no options to acquire
additional shares.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding compensation paid
to our Chief Executive Officer and those other individuals who serve as
executive officers at the end of fiscal 1999 who earned in excess of
$100,000 as compensation for services rendered on our behalf.
Annual Compensation Long Term Compensation Awards
--------------------------------------------------------------
Name Restricted All
And Stock Options/ Other
Principal Salary Bonus Award(s) SARs Compensation
Position Year(1) ($) ($) ($) (#) ($)(2)
- -------- ------ ------- ----- ------- ---- --------
Jeffrey W. Rothell, 1999 $78,000 $ 0 $50,000 -0- $1,200
President and Chief 1998 $ 0 $ 0 -0- -0- $ 0
Executive Officer 1997 $ 0 $ 0 -0- -0- $ 0
Garth Cook, 1999 $78,000 $ 0 $50,000 -0- $1,200
Chief Financial 1998 $ 0 $ 0 -0- -0- $ 0
Officer 1997 $ 0 $ 0 -0- -0- $ 0
________________________
(1) Messrs. Rothell and Cook commenced their employment in August 1999.
Pursuant to their employment agreements each received 600,000 shares
of Common Stock valued at $1.00 per share. Initially, they received
100,000 shares valued at $.50 with the remainder vesting over the next
year through January 1, 2001.
(2) The Company pays Messrs. Rothell and Cook's health insurance of
approximately $100 per month.
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(3) No other Company executive officer will earn in excess of $100,000,
considering all forms of compensation, in the upcoming fiscal year
ending December 31, 2000.
STOCK OPTIONS
OPTIONS GRANTED
The following table sets forth the options that have been granted to
those persons listed in the Summary Compensation Table as of December 31, 1999.
Option/SAR Grants
-----------------
Individual Grants
- --------------------------------------------------------------------------
(a) (b) (c) (d) (e)
% of Total
Options/ Options/SARs Exercise
SARs Granted to or Base
Granted Employees Price Expiration
Name (#) in Fiscal Year ($/Share) Date
---- ------- -------------- -------- ----
Jeffrey W. Rothell 0 0% $0 0
Garth Cook 0 0% $0 0
______________________________
COMPENSATION OF DIRECTORS
The Company had no arrangements pursuant to which any director of the
Company was compensated during the year ended December 31, 1999, for
services as a Director. All Directors are reimbursed for reasonable
expenses incurred in connection with their attendance at Board meetings.
Members of the Board of Directors have been granted options and have
received shares of our Common Stock as described elsewhere.
EMPLOYMENT CONTRACTS
In August 1999, the Company entered into one (1) year employment
agreements with Mr. Jeffrey Rothell, our President and Chief Executive
Officer and Mr. Garth Cook, our Chief Financial Officer and Treasurer.
Each individual receives $78,000 per year in salary. In addition, each
received 100,000 shares of Common Stock upon signing of their agreements
and will each receive an additional 350,000 shares of Common Stock on
January 1, 2000 with three (3) quarterly bonuses of 50,000 shares in March
2000, June 2000 and January 2001. The Company also pays each individual's
health insurance.
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STOCK OPTIONS
DIRECTOR OPTIONS
In January 1999, our Board of Directors issued to Mr. Bedri 600,000
options to purchase our Common Stock exercisable at $1.00 per share. All
currently outstanding options are exercisable for five years. At that
time, two former Directors also each received 600,000 options to purchase
Common Stock exercisable at $1.00 per share.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to the
beneficial ownership of our outstanding Common Stock as of March 24, 2000 by:
* each person who is the beneficial owner of more than 5% of our
common stock;
* each of our Directors;
* each of our named Executive Officers in the summary compensation
table;
* all of our named Executive Officers and Directors as a group.
Amount and Nature of
Name and Address of Shareholder Beneficial Ownership(1) Percent of Class
- ------------------------------- -------------------- ----------------
William Bedri(2) 1,400,000 6.00%
13747 Montfort Dr., Suite 250
Dallas, Texas 75240
Jeffrey Rothell(3) 600,000 4.50%
13747 Montfort Dr., Suite 250
Dallas, Texas 75240
Garth Cook(4) 600,000 4.50%
13747 Montfort Dr., Suite 250
Dallas, Texas 75240
Maya Crothers(5) 120,000 0.90%
13747 Montfort Dr., Suite 250
Dallas, Texas 75240
12
Dave McEvilly 100,000 0.70%
13747 Montfort Dr., Suite 250
Dallas, Texas 75240
Ron Howard 900,000 6.70%
13747 Montfort Dr., Suite 250
Dallas, Texas 75240
William D. Yotty(6) 3,810,000 23.9%
13747 Montfort Dr., Suite 250
Dallas, Texas 75240
Jim Chambas(7) 1,700,000 8.20%
13747 Montfort Dr., Suite 250
Dallas, TX 75240
All Officers and Directors as a 2,600,000 14.90%
group (3 persons)
________________________
(1) Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of
1934. Unless otherwise stated below, each such person has sole voting
and investment power with respect to all such shares. Under Rule 13d-
3(d), shares not outstanding which are subject to options, warrants,
rights or conversion privileges exercisable within 60 days are deemed
outstanding for the purpose of calculating the number and percentage
owned by such person, but are not deemed outstanding for the purpose
of calculating the percentage owned by each other person listed.
(2) Mr. Bedri is the beneficial owner of options to purchase 600,000
shares of Common Stock.
(3) Mr. Rothell may be deemed the beneficial owner of 600,000 shares of
Common Stock although pursuant to his employment agreement he receives
his shares over the next year and a half.
(4) Mr. Cook may be deemed the beneficial owner of 600,000 shares of
Common Stock although pursuant to his employment agreement he receives
his shares over the next year and a half.
(5) Ms. Crothers may be deemed the beneficial owner of 120,000 shares of
Common Stock.
(6) Mr. Yotty, a former Director, is the beneficial owner of options to
purchase 600,000 shares of Common Stock.
(7) Mr. Chambas, a former Director, is the beneficial owner of options to
purchase 600,000 shares of Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We believe that all of the transactions set forth below were made on
an arms-length basis. All future transactions between us and our Officers,
Directors, Principal Stockholders and affiliates will be approved by a
majority of the Board of Directors, including a majority of outside
Directors, and will continue to be on terms no less favorable to us than
could be obtained from unaffiliated.
In August 1998, we entered into a Merger and Plan of Reorganization
with NVT, Inc. wherein we issued 3,000,000 shares of our Common Stock to
Messrs. Bedri, Chambas, Yotty
13
and other shareholders of NVT, Inc. After the merger, these individuals
became Officers and Directors of the Company and collectively own 2,555,000
shares of Common Stock.
In October 1998, we purchased two (2) long distance customer bases
from Quantum Communications, Inc. a company owned by Mr. William Yotty, one
of our former Directors, for $110,000 and $60,000, respectively. Because
of the geographical location of the customer bases compared to our network,
we sold these bases to Nationwide Hospitality, Inc. ("Nationwide") in
December 1999 for a total of $175,000 for the forgiveness of a note to Jim
Chambas, a former Director, for $175,000. The Company still owes the
former Director $96,000. The note is non-interest bearing and the original
proceeds were used to fund the working capital of the Company. Nationwide
is owned by our former Director Jim Chambas and as such, may be deemed to
be an affiliate. Due to the related nature of this transaction, it may not
be deemed to be as favorable as might be obtained in a non-related transaction.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
To the Company's knowledge, during the fiscal period ended December 31,
1999, the Company's Officers and Directors complied with all applicable
Section 16(a) filing requirements. This statement is based solely on a
review of the copies of such reports furnished to the Company by its
Officers and Directors and their written representations that such reports
accurately reflect all reportable transactions.
INDEPENDENT AUDITORS
Deloitte & Touche, LLP currently serves the Company as independent
auditors. Representatives of Deloitte & Touche, LLP will be present at
the Annual Meeting, will have an opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate questions
from Shareholders.
In December 1999, we engaged the accounting service of Deloitte &
Touche, LLP as our auditors for the fiscal year ending December 1999.
Previously, Schvanevedt & Company were the Company's auditors and provided
accounting services until their dismissal in December 1999. Schvanevedt &
Company's report on the financial statements for the last year did not
contain an adverse opinion or disclaimer of opinion, nor were they modified
as to uncertainty, audit scope, or accounting principles except that their
previous reports contained their opinion as to the uncertainty as to our
viability as a going concern. The decision to change auditors was
unanimously approved by the Company's the Board of Directors in December
1999. There were no disagreements with Schvanevedt & Company on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which if not resolved to Schvanevedt &
Company's satisfaction, would have caused it to make reference to the
subject matter of the disagreement in connection with their reports.
14
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was
not aware of any other matter to be presented at the Meeting other than as
set forth herein. However, if any other matters are properly brought
before the Meeting, the shares represented by valid proxies will be voted
with respect to such matters in accordance with the judgment of persons
voting them.
ANNUAL REPORTS
The Company's 1999 Annual Report is enclosed. The Company will
provide without charge to any shareholder of record as of April 24, 2000
who requests in writing, a copy of the Company's 1999 Annual Report or the
1999 Annual Report on Form 10-K (without exhibits), including financial
statements and financial statement schedules, filed with the Securities and
Exchange Commission. Any such request should be directed to NetVoice
Technologies Corporation, 13747 Montfort Drive, Suite 250, Dallas, Texas
75240, ATTENTION: GARTH COOK.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any shareholder who wishes to present a proposal for action at the
2001 Annual Meeting and who wishes to have it set forth in the
corresponding proxy statement and identified in the corresponding form of
proxy prepared by management must notify the Company no later than January 19,
2001 in such form as required under the rules and regulations promulgated by
the Commission.
BY ORDER OF THE BOARDS OF DIRECTORS,
April 27, 2000
THE BOARD OF DIRECTORS HOPES THAT SHAREHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT
RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR
COOPERATION WILL BE APPRECIATED.
15
APPENDIX A
NETVOICE TECHNOLOGIES CORPORATION
---------------------------------
2000 STOCK PLAN
---------------
SECTION 1. General Purpose of Plan; Definitions.
------------------------------------
The name of this plan is the NetVoice Technologies Corporation
2000 Stock Plan (the "Plan"). The purpose of the Plan is to enable NetVoice
Technologies Corporation (the "Company") and its Subsidiaries to retain and
attract executives, employees (whether full or part-time), consultants and
non-employee directors who contribute to the Company's success by their
ability, ingenuity and industry, and to enable such individuals to
participate in the long-term success and growth of the Company by giving
them a proprietary interest in the Company.
For purposes of the Plan, the following terms shall be defined as
set forth below:
a "BOARD" means the Board of Directors of the Company.
b. "CAUSE" means (i) a felony conviction of the
participant or the failure of the participant to
contest prosecution for a felony, (ii) the
participant's willful misconduct or dishonesty in
connection with his employment, (iii) the participant's
breach of any proprietary information agreement,
covenant not to compete, employment contract or similar
agreement with the Company, or (iv) the participant's
continued failure to perform his duties after written
notice of such failure
c. "CHANGE IN CONTROL" means: (i) the consummation of a
merger or consolidation of the Company with or into
another entity or any other corporate reorganization,
if more than fifty percent of the combined voting power
of the continuing or surviving entity's securities
outstanding immediately after such merger,
consolidation or other reorganization is owned by
persons who are not shareholders of the Company
immediately prior to such merger, consolidation or
reorganization or (ii) the sale, transfer or other
disposition of all or substantially all of the
Company's assets. A transaction shall not constitute
a Change in Control if its sole purpose is to create a
holding company that will be owned in substantially the
same proportions by persons who held the Company's
securities immediately before such transaction.
d. "CODE" means the Internal Revenue Code of 1986, as amended.
e. "COMMITTEE" means the Committee referred to in Section
2 of the Plan. If at any time no Committee shall be in
office, then the
functions of the Committee specified in the Plan shall
be exercised by the Board.
f. "COMPANY" means NetVoice Technologies Corporation, a
corporation organized under the laws of the State of
Nevada (or any successor corporation).
g. "CONSULTANT" means a person or entity who performs bona
fide services for the Company, a Parent Corporation or
a Subsidiary as a consultant, adviser or other
independent contractor excluding employees and Non-
Employee Directors.
h. "DISABILITY" means permanent and total disability
within the meaning of Section 22(e)(3) of the Code as
determined by the Committee in its absolute discretion.
i. "DISINTERESTED PERSON" shall have the meaning set forth
in Rule 16b-3 as promulgated by the Securities and
Exchange Commission under the Securities Exchange Act
of 1934, or any successor definition adopted by the
Commission.
j. "FAIR MARKET VALUE" means the value of the Stock on a
given date as determined by the Committee in accordance
with the Treasury Department regulations applicable to
"incentive stock options" within the meaning of Section
422 of the Code.
k. "INCENTIVE STOCK OPTION" means any Stock Option
intended to be and designated as an "Incentive Stock
Option" within the meaning of Section 422 of the Code.
l. "NONQUALIFIED STOCK OPTION" means any Stock Option that
is not an Incentive Stock Option, and is intended to be
and is designated as a "Nonqualified Stock Option."
m. "NON-EMPLOYEE DIRECTOR" means any member of the Board
who is not an employee of the Company, any Parent
Corporation or Subsidiary.
n. "PARENT CORPORATION" means any corporation (other than
the Company) in an unbroken chain of corporations
ending with the Company if, at the time of the granting
of the Stock Option, each of the corporations (other
than the Company) owns stock possessing 50% or more of
the total combined voting power of all classes of stock
in one of the other corporations in the chain.
2
o. "REPORTING COMPANY" shall mean a company which has any
class of equity security (other than an exempt
security) registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.
p. "STOCK" means the Common Stock of the Company and any
other securities of the Company which may hereafter
become subject to Stock Options pursuant to Section 8.
q. "STOCK APPRECIATION RIGHT" means the right pursuant to
an award granted under Section 6 below to surrender to
the Company all or a portion of a Stock Option in
exchange for an amount equal to the difference between
(i) the Fair Market Value, as of the date such Stock
Option or such portion thereof is surrendered, of the
shares of Stock covered by such Stock Option or such
portion thereof, and (ii) the aggregate exercise price
of such Stock Option or such portion thereof.
r. "STOCK OPTION" or "OPTION" means any option to purchase
shares of Stock granted pursuant to Section 5 below.
s. "SUBSIDIARY" means any corporation (other than the
Company) in an unbroken chain of corporations beginning
with the Company if, at the time of the granting of the
Stock Option, each of the corporations (other than the
last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting
power of all classes of stock in one of the other
corporations in the chain.
SECTION 2. Administration.
--------------
The Plan shall be administered by the Board of Directors or by a
Committee of not less than two directors, who shall be appointed by the
Board of Directors of the Company and who shall serve at the pleasure of
the Board. At all times after the Company becomes a Reporting Company, all
members of the Committee or Board of Directors (if no Committee has been
appointed) must be Disinterested Persons.
The Committee shall have the power and authority to grant Stock
Options to eligible persons, pursuant to the terms of the Plan.
In particular, the Committee shall have the authority:
(i) to select the officers, other employees, Non-
Employee Directors and Consultants of the Company
to whom Stock Options may from time to time be
granted hereunder;
3
(ii) to determine whether and to what extent Incentive
Stock Options and Nonqualified Stock Options, or
a combination of the foregoing, are to be granted
hereunder;
(iii) to determine the number of shares to be covered
by each such award granted hereunder;
(iv) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any
award granted hereunder (including, but not
limited to, any restriction on any Stock Option
and/or the shares of Stock relating thereto) and
to amend such terms and conditions (including,
but not limited to, any amendment which
accelerates the vesting of any award); and
(v) subject to the provisions of the Plan to
determine whether, to what extent, and under what
circumstances, Stock Options may be exercised
following termination of employment.
The Committee shall have the authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the Plan as
it shall, from time to time, deem advisable; to interpret the terms and
provisions of the Plan and any award issued under the Plan (and any
agreements relating thereto); and to otherwise supervise the administration
of the Plan. The Committee may delegate its authority to the President
and/or the Chief Executive Officer of the Company for the purpose of
selecting employees who are not officers or directors of the Company for
purposes of clause (i) above.
All decisions made by the Committee pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company
and Plan participants.
SECTION 3. Stock Subject to Plan.
---------------------
The total number of shares of Stock reserved and available for
distribution under the Plan shall be 2,000,000 shares, subject to increase
or decrease as provided in Section 8. Such shares may consist, in whole or
in part, of authorized and unissued shares and treasury shares, including
shares which may become treasury shares as a result of purchases of
outstanding shares which may be made from time to time by the Company. If
any shares that have been optioned under this Plan cease to be subject to
Options, are forfeited or such award otherwise terminates without Stock
being issued or in the event that shares issued under the Plan are acquired
by the Company pursuant to a right of repurchase or right of first refusal,
such shares shall be available for distribution in connection with future
awards under the Plan.
4
SECTION 4. Eligibility.
-----------
Officers, employees, Non-Employee Directors and Consultants of
the Company or its Subsidiaries who are responsible for or contribute to
the management, growth and/or profitability of the business of the Company
and its Subsidiaries are eligible to be granted Stock Option awards under
the Plan; provided that only officers (who are employees) and other
employees shall be eligible to receive Incentive Stock Options. The
optionees and participants under the Plan shall be selected from time to
time by the Committee, in its sole discretion, from among those eligible,
and the Committee shall determine, in its sole discretion, the number of
shares covered by each award.
SECTION 5. Stock Options.
-------------
Any Stock Option granted under the Plan shall be in such form as
the Committee may from time to time approve.
The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Nonqualified Stock Options. No Stock
Options shall be granted under the Plan on or after the tenth anniversary
of the effective date of the Plan.
The Committee shall have the authority to grant any optionee
Incentive Stock Options, Nonqualified Stock Options, or both types of
options. To the extent that any option does not qualify as an Incentive
Stock Option, it shall constitute a separate Nonqualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of
this Plan relating to Incentive Stock Options shall be interpreted, amended
or altered, nor shall any discretion or authority granted under the Plan be
so exercised, so as to disqualify either the Plan or any Incentive Stock
Option under Section 422 of the Code. The preceding sentence shall not
preclude any modification or amendment to an outstanding Incentive Stock
Option, whether or not such modification or amendment results in
disqualification of such Option as an Incentive Stock Option; provided the
optionee consents in writing to the modification or amendment.
Stock Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee
shall deem desirable.
(a) OPTION PRICE. The option price per share of Stock
purchasable under a Stock Option shall be determined by the Committee at
the time of grant and may not be less than 85% of the Fair Market Value of
the Stock on the date of the grant of the Option. In no event shall the
option price per share of Stock purchasable under an Incentive Stock Option
be less than 100% of the Fair Market Value of the Stock on the date of the
grant of the option. If a participant owns or is deemed to own (by reason
of the attribution rules applicable under Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock of the
Company or any Parent Corporation or Subsidiary, the option price shall be
no less than 110% of the Fair Market Value of the Stock on the date the
option is granted.
5
(b) OPTION TERM. The term of each Stock Option shall be
fixed by the Committee, but no Incentive Stock Option shall be exercisable
more than ten years after the date the option is granted. If an employee
owns or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) more than 10% of the combined voting power of all
classes of stock of the Company or any Parent Corporation or Subsidiary and
an Incentive Stock Option is granted to such employee, the term of such
option shall be no more than five years from the date of grant.
(c) EXERCISABILITY. Stock Options shall be exercisable at
such time or times as determined by the Committee at or after grant. If
the Committee provides, in its discretion, that any option is exercisable
only in installments, the Committee may waive such installment exercise
provisions at any time. Installment exercise restrictions may be based
upon the lapse of time, the attainment of specified performance goals, or
a combination of each. If the participant is not an officer, director or
Consultant of the Company, the Options shall become exercisable at least as
rapidly as 20% per year over the five year period commencing on the date of
grant.
(d) METHOD OF EXERCISE. Stock Options may be exercised in
whole or in part at any time during the option period by giving written
notice of exercise to the Company specifying the number of shares to be
purchased. Such notice shall be accompanied by payment in full of the
purchase price, either by certified or bank check, or by any other form of
legal consideration deemed sufficient by the Committee and consistent with
the Plan's purpose and applicable law. If permitted in each case by the
Committee, in its sole discretion, payment in full or in part may also be
made in the form of unrestricted Stock already owned by the optionee (based
on the Fair Market Value of the Stock on the date the option is exercised,
as determined by the Committee); provided, however, that, in the case of an
Incentive Stock Option, the right to make a payment in the form of already
owned shares may be authorized only at the time the option is granted. If
the terms of an option so permit, or the Committee agrees, in its sole
discretion, an optionee may elect to pay all or part of the option exercise
price by having the Company withhold from the shares of Stock that would
otherwise be issued upon exercise that number of shares of Stock having a
Fair Market Value equal to the aggregate option exercise price for the
shares with respect to which such election is made. No shares of Stock
shall be issued until full payment therefor has been made. An optionee
shall generally have the rights to dividends and other rights of a
shareholder with respect to shares subject to the option when the optionee
has given written notice of exercise, has paid in full for such shares,
and, if requested, has given the representation described in paragraph (a)
of Section 10.
(e) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall
be transferable by the optionee otherwise than by will or by the laws of
descent and distribution, and all Stock Options shall be exercisable,
during the optionee's lifetime, only by the optionee.
No Option or interest therein may be transferred, assigned,
pledged or hypothecated by a participant during the participant's lifetime,
whether by operation of law or otherwise, or made subject to execution,
attachment or similar process.
6
(f) TERMINATION UPON DEATH. If an optionee's employment by
the Company and any Subsidiary or Parent Corporation terminates by reason
of death, the Stock Option may thereafter be immediately exercised, to the
extent then exercisable (or on such accelerated basis as the Committee
shall determine at or after grant), by the legal representative of the
estate or by the legatee of the optionee under the will of the optionee or
by the heirs of the optionee under the laws of descent and distribution,
for a period of one year (or such shorter period (not less than six months)
as the Committee shall specify at grant) from the date of such death or
until the expiration of the stated term of the option, whichever period is
shorter.
(g) TERMINATION BY REASON OF DISABILITY. If an optionee's
employment by the Company and any Subsidiary or Parent Corporation
terminates by reason of Disability, any Stock Option held by such optionee
may thereafter be exercised, to the extent it was exercisable at the time
of termination due to Disability (or on such accelerated basis as the
Committee shall determine at or after grant), but may not be exercised
after one year (or such shorter period (not less than six months) as the
Committee shall specify at grant) from the date of such termination of
employment or the expiration of the stated term of the option, whichever
period is the shorter.
(h) OTHER TERMINATION OF EMPLOYMENT. If an optionee's
employment by the Company, any Subsidiary or Parent Corporation terminates
for any reason other than death or Disability, any Stock Option held by
such optionee may thereafter be exercised to the extent it was exercisable
at such termination, but may not be exercised after 30 days after the date
of such termination of employment (or such longer (not to exceed three
months for Incentive Stock Options) period as the Committee shall determine
at or after grant) or the expiration of the stated term of the option,
whichever period is the shorter; provided, however, that if the optionee's
employment is terminated for Cause, all rights under the Stock Option shall
terminate and expire upon such termination unless the Committee elects to
extend the exercise period (at any time at or after grant), provided that
for Incentive Stock Options such extensions shall not go beyond the stated
termination date of the Option or three months after the date of
termination of employment, whichever is earlier.
(i) CONDITION TO EXERCISE. Notwithstanding any other
provision of the Plan, all Options shall be subject to the condition that
if at any time the Committee shall determine in its discretion that the
listing, registration or qualification of any Option or Stock subject to
any Option upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body or the
disclosure of material information about the Company, is necessary or
desirable as a condition of, or in connection with, any Option or the
issuance or purchase of Stock subject thereto, the Option may not be
exercised in whole or in part unless such listing, registration,
qualification, consent, approval or disclosure shall have been effected or
obtained free of any condition not acceptable to the Committee. If because
of the foregoing restrictions an Option cannot be exercised during any part
of the 30-day period provided for under subparagraph (h) above after a
termination of employment (other than as a result of death or Disability
and other than for Cause), the period during which any Option held by the
terminated employee may be exercised shall be extended by the amount of
time during such 30-day period that the Option could not be exercised as a
result of the restriction set forth above in this subparagraph;
7
provided that in no event will Incentive Stock Options be exercisable after
the stated termination date of the Option or three months after the date of
termination of employment, whichever is earlier.
(j) NON-EMPLOYEE OPTIONS. The Company shall have the right
to grant Nonqualified Stock Options to Non-Employee Directors or
Consultants. in which event references to termination of employment in the
Plan shall refer to the termination of engagement of a Consultant or the
resignation, death, disability, removal, refusal to serve or failure to
re-elect a Non-Employee Director.
(k) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. The aggregate
Fair Market Value (determined as of the date the Option is granted) of the
Common Stock with respect to which Incentive Stock Options (under this Plan
and any other plan of the Company, any Subsidiary or Parent Corporation)
are exercisable for the first time by an optionee during any calendar year
shall not exceed $100,000.
(l) RESTRICTIONS ON TRANSFER OF SHARES. Any shares issued
upon exercise of an Option may be made subject to such special forfeiture
conditions, rights of repurchase, rights of first refusal and other
transfer restrictions as the Committee may determine and which are set
forth in the Stock Option Agreement. In the case of a participant who is
not an officer, director or Consultant of the Company, (i) any right to
repurchase at the original exercise price must lapse at least as rapidly as
20% per year over a five year period commencing on the date the Option is
granted, (ii) any repurchase right may be exercised only for cash or for
cancellation of indebtedness incurred in purchasing the shares issued upon
exercise of the Option, and (iii) any such right may only be exercised
within 90 days after the later of the termination of the participant's
service or the date the Option is exercised.
(m) CHANGE IN CONTROL. If the Company is subject to a
Change in Control as a result of its sale, transfer or other disposition of
all or substantially all of its assets, the Company may, upon at least 15
days prior written notice to participants, elect to cancel all outstanding
Options upon consummation of the sale, transfer or other disposition. If
the Company is subject to a Change in Control involving a merger or
consolidation, outstanding Options shall be subject to the agreement of
merger or consolidation as provided in Section 8 and, if such agreement
does not provide for the continuation of outstanding Options by the Company
(if it is a surviving corporation), the assumption of the Plan and
outstanding Options by the surviving corporation or its parent or the
substitution by the surviving corporation or its parent of options with
substantially the same terms, then all outstanding Options will terminate
upon consummation of merger or consolidation. In the event of the
termination of all outstanding Option in connection with a Change in
Control, all outstanding Options shall be exercisable in full (without
regard to any installment exercise provisions) for a period of at least 15
days prior to such termination, but in no event will any Option be
exercisable after its stated term or after the period of time provided for
following a termination of employment or service.
8
SECTION 6. Transfer; Leave of Absence. etc.
-------------------------------
For purposes of the Plan, the following events shall not be
deemed a termination of employment:
(a) a transfer of an employee from the Company to a Parent
Corporation or Subsidiary, or from a Parent Corporation or Subsidiary to
the Company, or from one Subsidiary to another;
(b) a leave of absence, approved in writing by the
Committee, for military service or sickness, or for any other purpose
approved by the Company if the period of such leave does not exceed ninety
(90) days (or such longer period as the Committee may approve, in its sole
discretion; provided that the period of leave for Incentive Stock Options
cannot exceed 90 days unless the optionee's right to return to work is
guaranteed by law or agreement); provided that, in the case of any leave of
absence, the employee returns to work on the day after the last day of such
leave unless he is terminated earlier by the Company.
SECTION 7. Amendments and Termination.
--------------------------
The Board may (a) amend, alter or discontinue the Plan, (b)
modify, amend, extend or assume outstanding Options or accept the
cancellation of outstanding Options (whether granted by the Company or
another issuer) in return for the grant of new Options for the same or a
different number of shares and at the same or a different exercise price
but no amendment, modification, extension, assumption, cancellation or
discontinuation shall be made (except those specifically permitted under
other provisions of this Plan) (i) which would impair the rights of an
optionee or participant under a Stock Option theretofore granted or which
would cause an optionee's or participant's existing Incentive Stock Option
to no longer qualify as an Incentive Stock Option, without the optionee's
or participant's consent, or (ii) which, without the approval of the
shareholders of the Company, would cause the Plan to no longer comply with
(A) the rules promulgated by the Securities and Exchange Commission under
authority granted in Section 16 of the Securities Exchange Act of 1934, as
amended, if the Company is then a Reporting Company, (B) Section 422 of the
Code or (C) any other statutory or regulatory requirements.
SECTION 8. Changes in the Company's Capital Structure.
------------------------------------------
The existence of outstanding Options shall not affect in any way
the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or any other
changes in the Company's capital structure or its business or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred
or prior preference stock ahead of or affecting the Common Stock or the
rights thereof, or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.
9
If the Company effects a stock split or reverse stock split,
declares a dividend on its Common Stock payable in securities of the
Company, otherwise effects a reclassification or recapitalization whereby
the holders of its Common Stock receive other securities in exchange for or
as a distribution on the Common Stock without the payment of any
consideration therefor, or effects a merger where the Company is the
surviving corporation and which provides for the continuation of
outstanding Options, then (a) the number, class and per share price of
shares of stock subject to outstanding Options hereunder shall be
appropriately adjusted in such manner as to entitle the optionee to receive
upon exercise of an Option, for the same aggregate cash consideration, the
same total number and class or classes of shares as he would have received
had he exercised his Option in full immediately prior to the applicable
date for the event requiring the adjustment; and (b) the number and class
of shares then reserved for issuance under the Plan shall be adjusted by
substituting for the total number and class of shares of stock then
reserved for ("Prior Shares") the number and class of shares of stock that
would have been received by the holder of record of the Prior Shares as the
result of the event requiring the adjustment.
If the Company merges or consolidates with another corporation,
whether or not the Company is a surviving corporation, outstanding Options
shall be subject to the agreement of merger or consolidation which without
the participant's consent may provide for: (i) the continuation of
outstanding Options by the Company ( if it is the surviving corporation),
(ii) the assumption of the Plan and outstanding Options by the surviving
corporation or its parent, (iii) the substitution by the surviving
corporation or its parent of options with substantially the same terms for
the outstanding Options or (iv) if a Change of Control is involved, the
termination of outstanding Options in accordance with paragraph (m) of
Section 5. If the agreement of merger or consolidation provides for the
assumption of the Plan and outstanding Options by the surviving corporation
or its parent, the assuming corporation shall be entitled to the benefit of
and shall be assigned any right of repurchase, right of first refusal,
market standoff or other restriction or agreement with respect to the stock
issued or issuable upon exercise of Options.
Except as specifically provided in this Section, (i) a
participant shall have no rights by reason of the payment of any dividend
or any other increase or decrease in the number of shares of stock of any
class, and (ii) any issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class shall
not affect, and no adjustment by reason thereof shall be made with respect
to, the number or exercise price of shares subject to any Option.
SECTION 9. Indemnification of the Board.
----------------------------
The Company will, to the fullest extent permitted by law,
indemnify, defend and hold harmless any person who at any time is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding (whether civil, criminal, administrative or
investigative) in any way relating to or arising out of this Plan or any
Option or Options granted hereunder by reason of the fact that such person
is or was at any time a director of the Company or a member of the
Committee against judgments, fines, penalties, settlements and reasonable
expenses (including attorneys' fees) actually incurred by such person in
connection with such action, suit or proceeding. This right of
indemnification shall inure to the benefit of the heirs, executors and
10
administrators of each such person and is in addition to all other rights
to which such person may be entitled by virtue of the Bylaws of the Company
or as a matter of law, contract or otherwise.
SECTION 10. General Provisions.
------------------
(a) The Committee may require each person receiving and
exercising a Stock Option under the Plan to sign an investment letter at
the time of receipt of the Stock Option and upon each exercise, which
investment letter will be in the form approved by the Committee from time
to time. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock delivered under the Plan
shall be subject to such stock transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Stock is then listed, and any applicable Federal or state
securities laws, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such
restrictions.
(b) Subject to paragraph (d) below, recipients of Options
under the Plan are not required to make any payment or provide
consideration in connection with the grant of an Option.
(c) Nothing contained in this Plan shall prevent the Board
of Directors from adopting other or additional compensation arrangements,
subject to shareholder approval (if such approval is required); and such
arrangements may be either generally applicable or applicable only in
specific cases. The adoption of the Plan shall not confer upon any
employee of the Company or any Subsidiary any right to continued employment
with the Company or a Subsidiary, as the case may be, nor shall it
interfere in any way with the right of the Company or a Subsidiary to
terminate the employment of any of its employees at any time.
(d) Each participant shall, no later than the date as of
which any part of the value of an award or exercise first becomes
includible as compensation in the gross income of the participant for
Federal state or local income tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld
with respect to the award or exercise. The obligations of the Company
under the Plan shall be conditional on such payment or arrangements and the
Company and any Parent Corporation or Subsidiary shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
of any kind otherwise due to the participant. With respect to any award or
purchase under the Plan, if the written terms of such award so permit, a
participant may elect by written notice to the Company to satisfy part or
all of the withholding tax requirements associated with the award or
purchase by (i) authorizing the Company to retain from the number of shares
of Stock that would otherwise be deliverable to the participant, or (ii)
delivering to the Company from shares of Stock already owned by the
participant, that number of shares having an aggregate Fair Market Value
equal to part or all of the tax payable by the
11
participant under this Section 10(d). Any such election shall be in
accordance with, and subject to, applicable tax and securities laws,
regulations and rulings.
(e) The Committee may require in connection with the grant
of a Stock Option that the participant agree that in connection with an
underwritten registration of the offering of any securities of the Company
under the Securities Act of 1933, as amended, that the participant will not
directly or indirectly sell, make any short sale of, loan, hypothecate,
pledge, offer, grant or sell any option or other contract for the purchase
of, purchase any option or other contract for the sale of, or otherwise
dispose of or transfer, or agree to engage in any of the foregoing
transactions with respect to any shares of Common Stock or other securities
of the Company during such period (not to exceed 180 days) following the
effective date of the registration statement of the Company filed under Act
as may be requested by the Company or the representative of the
underwriters. The provision may further permit the Company to impose stock
transfer orders and require the participant to escrow his shares in
connection with such public offering at the request of the Company or
representative of the underwriters and may require the participant to sign
an underwriter's form of lock-up agreement.
(f) The Company may hold in escrow any shares issued upon
exercise of an Option as long as such shares are subject to any repurchase
option, right of first refusal, market standoff or other restriction on
their sale or transfer.
(g) Each year, the Company shall furnish to holders of
Options and participants who have received stock upon exercise of Options,
its balance sheet and income statement (which need not be audited);
provided that the Company need not provide its balance sheet or income
statement to any person whose duties with the Company assure them of access
to equivalent information.
(h) This Plan and all determinations made and actions taken
pursuant hereto shall be governed by the internal laws of the State of
Nevada without giving effect to the principles of conflict of laws.
SECTION 13. Effective Date of Plan.
----------------------
The Plan shall be effective on January 20, 2000 (the date of
approval by the Board of Directors), but must be approved within one year
after the effective date by a vote of the holders of a majority of the
votes attributable to the capital stock of the Company present and entitled
to vote at an Annual or Special Meeting of the Company's shareholders or by
written consent of the holders of a majority of the votes attributable to
all outstanding capital stock of the Company. The Plan shall expire
(unless terminated earlier) ten years after the effective date. Awards may
be granted under the Plan prior to shareholder approval, provided such
awards are made subject to shareholder approval being obtained prior to the
first anniversary of the effective date, and all such awards are rescinded
if shareholder approval is not obtained prior to the first anniversary of
the effective date.
PROXY PROXY
- ----- -----
NETVOICE TECHNOLOGIES CORPORATION
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF THE SHAREHOLDERS TO BE HELD
MAY 19, 2000
The undersigned hereby constitutes and appoints Mr. Jeffrey Rothell and Mr.
Garth Cook, and each of them, the true and lawful attorneys and proxies
of the undersigned, with full power of substitution and appointment, for
and in the name, place and stead of the undersigned, to act for and vote
all of the undersigned's shares of the $.001 par value common stock of
NetVoice Technologies Corporation, a Nevada corporation at the Annual
Meeting of Shareholders to be held at The Westin Galleria, 3rd Floor,
Ballroom III, 13340 Dallas Parkway, Dallas, Texas 75240, at 9:00 a.m.,
on May 19, 2000, and any and all adjournments thereof, for the following
purposes:
Proposal 1: To approve the three nominees
to the Board of Directors:
FOR AGAINST ABSTAIN
Jeffrey Rothell [ ] [ ] [ ]
William Bedri [ ] [ ] [ ]
Garth Cook [ ] [ ] [ ]
Proposal 2: To approve the NetVoice
Technologies Corporation
2000 Stock Plan [ ] [ ] [ ]
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
The undersigned hereby revokes any proxies as to said shares heretofore
given by the undersigned, and ratifies and confirms all that said
attorneys and proxies may lawfully do by virtue hereof.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN
ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATION ABOVE. THIS PROXY
CONFERS DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR
DETERMINED AT THE TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL MEETING
OF SHAREHOLDERS TO THE UNDERSIGNED.
The undersigned hereby acknowledges
receipt of the Notice of the Annual
Meeting of Shareholders and Proxy
Statement furnished therewith.
Dated: _____________, 2000
__________________________________________
__________________________________________
Signature(s) of Shareholder(s)
Signature(s) should agree with the name(s)
hereon. Executors, administrators,
trustees, guardians and attorneys should
indicate when signing. Attorneys should
submit powers of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF NETVOICE
TECHNOLOGIES CORPORATION. PLEASE SIGN AND RETURN THIS PROXY TO NETVOICE
TECHNOLOGIES CORPORATION, 13747 MONTFORT DRIVE, SUITE 250, DALLAS, TEXAS
75240. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON IF YOU ATTEND THE MEETING.
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY FORM PROMPTLY USING THE
ENCLOSED ENVELOPE.