SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
netGuru, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------------
(4) Date Filed:
---------------------------------------------------------------------
NETGURU, INC.
22700 SAVI RANCH PARKWAY
YORBA LINDA, CALIFORNIA 92887
October 15, 2001
To Our Stockholders:
You are cordially invited to attend the 2001 Annual Meeting of
Stockholders of netGuru, Inc., which will be held at 10:00 a.m. on November 15,
2001, at our executive offices located at 22700 Savi Ranch Parkway, Yorba Linda,
California 92887. All holders of our outstanding common stock as of September
28, 2001 are entitled to vote at the Annual Meeting.
Enclosed is a copy of the Notice of Annual Meeting of Stockholders,
proxy statement and proxy card. A current report on our business operations will
be presented at the meeting, and stockholders will have an opportunity to ask
questions.
We hope you will be able to attend the Annual Meeting. Whether or not
you expect to attend, it is important that you complete, sign, date and return
the proxy card in the enclosed envelope in order to make certain that your
shares will be represented at the Annual Meeting.
Sincerely,
/s/ Amrit K. Das
Chief Executive Officer
NETGURU, INC.
22700 SAVI RANCH PARKWAY
YORBA LINDA, CALIFORNIA 92887
--------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 15, 2001
--------------
NOTICE IS HEREBY GIVEN that the 2001 annual meeting of stockholders of
netGuru, Inc. will be held at 10:00 a.m. local time, on November 15, 2001, at
our executive offices located at 22700 Savi Ranch Parkway, Yorba Linda,
California 92887 for the following purposes:
1. To elect seven directors to our Board of Directors;
2. To ratify the appointment of KPMG LLP, independent auditors,
to audit our consolidated financial statements for the fiscal
year beginning April 1, 2001; and
3. To transact such other business as may properly come before
the annual meeting or any adjournment or adjournments thereof.
Our Board of Directors has fixed the close of business on September 28,
2001, as the record date for the determination of stockholders entitled to
notice of and to vote at the annual meeting. Only holders of our common stock at
the close of business on the record date are entitled to vote at the meeting. A
list of stockholders entitled to vote at the meeting will be available for
inspection at our executive offices. Stockholders attending the meeting whose
shares are held in the name of a broker or other nominee should bring with them
a proxy or letter from that firm confirming their ownership of shares.
For Proposal 1, the election of the members of our board of directors,
the seven nominees receiving the highest vote totals will be elected.
By Order of the Board of Directors
/s/ Amrit K. Das
Chief Executive Officer
Yorba Linda, California
October 15, 2001
YOUR VOTE IS IMPORTANT
----------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, EVEN IF YOU DO
PLAN TO ATTEND, PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
RETURN ENVELOPE FURNISHED FOR THAT PURPOSE AS PROMPTLY AS POSSIBLE. IF YOU LATER
DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER
DESCRIBED IN THE ATTACHED PROXY STATEMENT.
NETGURU, INC.
22700 SAVI RANCH PARKWAY
YORBA LINDA, CALIFORNIA 92887
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 15, 2001
--------------
VOTING AND PROXY
This proxy statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of netGuru, Inc., a Delaware
corporation, or netGuru, for use at the 2001 annual meeting of stockholders to
be held at 10:00 a.m., local time, on November 15, 2001, at our executive
offices located at 22700 Savi Ranch Parkway, Yorba Linda, California 92887, and
at any adjournments or postponements of the meeting. When the enclosed proxy is
properly executed and returned, the shares it represents will be voted in
accordance with any directions noted thereon. If no specification is indicated,
the shares will be voted "FOR" the election as directors of the seven nominees
listed on the proxy. Any stockholder giving a proxy has the power to revoke it
at any time before it is exercised at the meeting by providing written notice of
revocation to the Secretary of netGuru, by issuing a subsequent proxy or by
voting at the annual meeting in person.
At the close of business on September 28, 2001, the record date for
determining stockholders entitled to notice of and to vote at the annual
meeting, we had issued and outstanding 16,920,848 shares of common stock, $.01
par value per share held by 131 holders of record. Each share of common stock
entitles the holder of that share to one vote on any matter coming before the
annual meeting. Only stockholders of record at the close of business on
September 28, 2001 are entitled to notice of and to vote at the annual meeting
or at any adjournments thereof.
Under Delaware law and our bylaws, a majority of the shares entitled to
vote, represented in person or by proxy, will constitute a quorum at a meeting
of stockholders. Generally, if a quorum is present, the affirmative vote of a
majority of the shares represented and voting on any matter will constitute the
act of the stockholders provided the number of shares voting in favor of any
proposal equals at least a majority of the quorum. Although abstentions and
"broker non-votes" are not counted either "for" or "against" any proposals, if
the number of abstentions or "broker non-votes" results in the votes "for" a
proposal not equaling at least a majority of the quorum required for the
meeting, the proposal will not be approved. This will be the case even though
the number of votes "for" a proposal exceeds the votes "against" a proposal.
Abstentions will have no effect on Proposal 1, the election of directors,
because directors are elected by a plurality vote.
We will pay the expenses of soliciting proxies for the annual meeting,
including the cost of preparing, assembling and mailing the proxy solicitation
materials. Proxies may be solicited personally, or by mail or by telephone, by
our directors, officers and regular employees who will not be additionally
compensated for these services. We anticipate that this proxy statement and
accompanying proxy card will be mailed on or about October 15, 2001 to all
stockholders entitled to vote at the annual meeting.
The matters to be considered and acted upon at the annual meeting are
referred to in the preceding notice and are more fully discussed below.
PROPOSAL 1
ELECTION OF DIRECTORS
Directors are elected annually and hold office until the next annual
meeting of stockholders or until their respective successors are elected and
qualify. It is intended that the proxies solicited by the Board of Directors
will be voted for election of the seven nominees listed in this proxy statement
unless a contrary instruction is made on the proxy. If for any reason, one or
more of these nominees is unavailable as a candidate for director, an event
which we do not anticipate, the person named in the accompanying proxy will vote
for another candidate or candidates nominated by the Board of Directors. All of
the nominees for director are, currently directors of netGuru.
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information regarding our directors (who are
all nominees for re-election) and executive officers.
NAME AGE POSITION
---- --- --------
Amrit K. Das 55 Chief Executive Officer and Chairman of the Board of Directors
Jyoti Chatterjee 45 President, Chief Financial Officer, Chief Operating Officer and
Director
Clara Young 46 Secretary, Vice President and Chief Administrative Officer
Santanu Das 28 Corporate Vice President, President, Engineering, Collaboration
and Animation Software, and Director
Stephen Owen 42 Corporate Vice President, President of European Operations and
Director
Charles Sleichter III 55 Vice President, Marketing Communications and Marketing
Strategies
Bruce E. Cummings 52 Director
Garret W. Vreeland 42 Director
John J. Pepin 60 Director
AMRIT K. DAS is the founder of netGuru and has served as our Chief
Executive Officer and Chairman of the Board of Directors since our inception in
1981. Mr. Das also served as our President since its inception until March 15,
1999. Mr. Das holds a B.S. in Civil/Structural Engineering from Calcutta
University, India and an M.S. in Structural Engineering from the University of
South Carolina.
JYOTI CHATTERJEE has served as our President since March 1999, as our
Chief Operating Officer and as a director since April 1990 and as our Chief
Financial Officer since March 2001. From April 1990 to March 1999, Mr.
Chatterjee served as our Executive Vice President. From 1985 to 1990, Mr.
Chatterjee served as our Chief Consulting Engineer. Mr. Chatterjee holds a B.S.
in Structural Engineering from the Indian Institute of Technology and an M.S. in
Structural Engineering from the University of Pennsylvania.
CLARA YOUNG has served as our Vice President and Chief Administrative
Officer since January 2001 and as Secretary since March 2001. Ms. Young served
as our Vice President, Administration since December 1987. Prior to that Ms.
Young served as program analyst with The Technical Group, Inc. from December
1982 to December 1987. Ms. Young holds a B.S. in Computer Science from
California State University, Fullerton.
-2-
SANTANU DAS has served as our Corporate Vice President and President,
Engineering, Collaboration and Animation Software since January 2001 and as a
director since September 1996. Mr. Das served as our Manager of New Technology
from May 1997 until June 1999. Prior to that, Mr. Das served as a Senior
Engineering Analyst for our company from 1991 to April 1997. Mr. Das holds a
B.S. in Structural Engineering from the University of Southern California and an
M.S. in Structural Engineering from the Massachusetts Institute of Technology.
Santanu Das is the son of our Chief Executive Officer, Amrit Das.
STEPHEN OWEN has served as our Corporate Vice President and Director
since September 2001 and President of European Operations since October 1999. He
served as Senior Vice President from October 1999 to September 2001. Prior to
that, he served as our Director of European Operations from 1987 to 1999. Mr.
Owen holds a B.S. in Civil Engineering from the University College Swansea,
United Kingdom.
CHARLES SLEICHTER III has served as our Vice President, Marketing
Communications and Marketing Strategies since January 2000. Prior to joining us,
Mr. Sleichter served, as an independent contractor, as Chief Operating Officer,
Senior Executive-Creative & Marketing Strategy for VPC Communications from
August 1999 to December 1999. From September 1997 to July 1999, Mr. Sleichter
served as Director of Business Development for J.B. Research/Relaxor. From 1996
to 1997, he served as an adjunct professor in the Department of Communications,
Film and Television of California State University, Fullerton. Mr. Sleichter
holds a B.A. in Communications and an M.A. in Mass Communications, Electronic
Media from California State University, Fullerton.
BRUCE E. CUMMINGS has served as one of our directors since 1996. Mr.
Cummings is the Principal of Bruce Cummings Associates, management and
marketing consultants. Prior to that, Mr. Cummings served as the President and
Chief Executive Officer of Portrait Display Labs, Inc., a manufacturer of
special purpose computer monitors that he co-founded, from 1992 to June 1997.
Mr. Cummings is currently a member of the Advisory Board for Europe Direct, the
European Direct Marketing Conference. Mr. Cummings holds a B.S. in Marketing
from California State University at Long Beach.
GARRET VREELAND has served as one of our directors since December 2000.
Mr. Vreeland is the Vice President of U.S. Advertising Sales at Terra Lycos, a
global Internet network. He has been with Terra Lycos since June 1998. From
November 1995 to June 1998, Mr. Vreeland was in advertising sales at Time, Inc.
Mr. Vreeland holds a B.S. in Marketing from University of Vermont.
JOHN PEPIN has served as one of our directors since September 2001. Dr.
Pepin is the Dean of the Fogelman College of Business and Economics, University
of Memphis. He has been serving as the Dean since December 1, 1999. Prior to
becoming Dean, he served the University as a Professor of Marketing, teaching
numerous marketing and marketing management courses. He has business experience
in automobile leasing, real estate, and agri-business, plus numerous consulting
and expert witness engagements. Dr. Pepin holds a B.B.A. and M.B.A. from the
University of Memphis, and a Ph.D. in Business Administration from the
University of Mississippi.
All directors hold office until the next annual stockholders' meeting
or until their respective successors are elected or until their earlier death,
resignation or removal. Our officers are appointed by, and serve at the
discretion of, our Board of Directors.
-3-
MEETINGS OF OUR BOARD OF DIRECTORS AND COMMITTEES
Our Board of Directors held no meetings during the fiscal year ended
March 31, 2001, and took action by unanimous written consent on three occasions.
Our Board of Directors has established an Audit Committee, a
Compensation Committee and a Stock Option Committee. Our Board of Directors does
not have a nominating committee. Our entire Board of Directors selects the
nominees for the Board of Directors.
Our Audit Committee makes recommendations to our Board of Directors
regarding the appointment of our independent auditors, reviews the results and
scope of the audit and other services provided by our independent auditors,
reviews our consolidated financial statements for each interim period, and
reviews and evaluates our internal audit and control functions. Our Audit
Committee currently consists of Bruce Cummings, Garret Vreeland and John Pepin.
Our Audit Committee held no meetings during the fiscal year ended March 31,
2001.
In September 2001, our Board of Directors approved and adopted an audit
committee charter, which is attached to this proxy statement as APPENDIX A.
Our Compensation Committee makes recommendations to our Board of
Directors concerning salaries and incentive compensation for our employees and
consultants. The Compensation Committee currently consists of Amrit Das and
Bruce Cummings. Our Compensation Committee held no meetings during the fiscal
year ended March 31, 2001.
Our Stock Option Committee selects the persons to receive options under
our stock option plans and establishes the number of shares, exercise price,
vesting period and other terms of the options granted under these plans. Our
Stock Option Committee consists of Amrit Das and Bruce Cummings. Although our
Stock Option Committee did not take any action during the fiscal year ended
March 31, 2001, our Board of Directors took action relating to our stock option
plans by written consent on one occasion.
PRINCIPAL ACCOUNTING FIRM FEES
The following table sets forth the aggregate fees billed or expected to
be billed to us for services rendered to us during the fiscal year ended March
31, 2001 by our independent auditors, KPMG LLP:
Audit Fees $ 182,000 (a)
Financial Information Systems Design and $ 0
Implementation Fees
All Other Fees $ 84,000 (b)
---------
--------------------------
(a) Includes fees for the audit of our annual consolidated financial statements
for the year ended March 31, 2001, and the reviews of the condensed
consolidated financial statements included in our quarterly reports on
Forms 10-QSB for the year ended March 31, 2001.
(b) The audit committee has considered whether the provision of these services
is compatible with maintaining the auditors' independence.
DIRECTORS' COMPENSATION
Our directors do not currently receive any cash compensation for their
service on our Board of Directors or any committee thereof, but directors may be
reimbursed for certain expenses in connection with attendance at Board of
Directors and committee meetings. We may also periodically award options to our
directors under our existing stock option plan and otherwise.
-4-
During the fiscal year ended March 31, 2001, we granted options to our
directors as follows: 30,000 to each of Amrit Das, Jyoti Chatterjee and Santanu
Das, 12,000 to Stephen Owen and 10,000 to Garret Vreeland.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, or
the Exchange Act, requires our executive officers and directors, and persons who
beneficially own more than 10% of a registered class of our equity securities to
file with the SEC, initial reports of ownership and reports of changes in
ownership of our equity securities and to furnish us with copies of all Section
16(a) forms that they file.
Based solely on a review of copies of the reports furnished to us
during the fiscal year ended March 31, 2001 and thereafter, or any written
representations received by us from a director, officer or beneficial owner of
more than 10% of our equity securities that no other reports were required, we
believe that, during the 2001 fiscal year, all Section 16(a) filing requirements
applicable to these reporting persons were complied with, except that (i)
Stephen Owen failed to file on a timely basis, a Form 3 upon his appointment as
an executive officer in October 1999, a Form 4 to report certain transactions in
which he engaged involving our securities in November and December 1999, and a
Form 4 to report the grant of options to purchase common stock in December 2000;
(ii) Garret Vreeland failed to file on a timely basis, a Form 3 upon his
election as a director in December 2000; and (iii) each of Amrit K. Das, Jyoti
Chatterjee, Clara Young and Santanu Das failed to file on a timely basis, a Form
4 to report the grant of options to purchase common stock in December 2000. Such
reports have since been filed.
BOARD AUDIT COMMITTEE REPORT
The audit committee of the Board of Directors of netGuru, Inc.
discussed with netGuru's independent auditors all matters required to be
discussed by generally accepted auditing standards, including those described in
Statement on Auditing Standards No. 61, as amended, "Communication with Audit
Committees." Prior to the inclusion and filing with the Securities and Exchange
Commission of the audited consolidated financial statements in netGuru's Annual
Report on Form 10-KSB for the fiscal year ended March 31, 2001, the audit
committee did not discuss with management or review netGuru's audited
consolidated financial statements. The audit committee obtained from the
independent auditors a formal written statement describing all relationships
between the auditors and netGuru that might bear on the auditors' independence
consistent with Independence Standards Board Standard No. 1, "Independent
Discussions with Audit Committees," and discussed with the auditors any
relationships that might impact their objectivity and independence and satisfied
itself as to the auditors' independence. Prior to the filing of the Form 10-KSB
with the Securities and Exchange Commission, the audit committee made no
recommendation to the Board of Directors as to whether the audited consolidated
financial statements should have been included in the Form 10-KSB. However,
subsequent to the filing of the Form 10-KSB, the audit committee reviewed the
consolidated financial statements and ratified their inclusion in the Form
10-KSB. The audit committee also recommended reappointment, subject to
stockholder approval, of the independent auditors, and the Board of Directors
concurred in such recommendation.
AUDIT COMMITTEE:
Bruce E. Cummings
John J. Pepin
Garret W. Vreeland
-5-
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation paid
to our Chief Executive Officer and to each of our other executive officers who,
during the fiscal year ended March 31, 2001, received an annual salary and bonus
of more than $100,000 for services rendered to us in all capacities.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------ -----------
OTHER SECURITIES
NAME AND FISCAL ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) COMPENSATION($)(1) OPTIONS (#) COMPENSATION($)
------------------ ---- ---------- ------------------ ----------- ---------------
Amrit K. Das 2001 324,000 73,183 30,000 26,068(2)
Chief Executive Officer and 2000 322,400 -- -- 28,055(2)
Chairman of the Board 1999 260,000 -- 120,000 16,506(2)
Jyoti Chatterjee 2001 210,600 36,573 30,000 10,500(3)
President, Chief Financial 2000 209,160 -- -- 1,116(3)
Officer and Chief Operating 1999 156,000 -- 100,000 9,360(3)
Officer
Clara Young 2001 121,500 16,203 9,000 7,290(3)
Vice President, Chief 2000 121,100 -- -- 8,111(3)
Administrative Officer 1999 104,000 -- 25,500 6,040(3)
Stephen Owen (4) 2001 107,481 13,344(5) 12,000 30,144(6)
Corporate Vice President, 2000 111,002 14,475(5) -- 36,619(6)
President, European Operations
Santanu Das (7) 2001 124,616 -- 30,000 12,627(8)
Corporate Vice President,
President, Engineering,
Collaboration and Animation
Software
--------------------
(1) The costs of certain benefits are not included because they did not exceed,
in the case of each of the executive officers named in the above table, the
lesser of $50,000 or 10% of the total annual salary and bonus as reported
above.
(2) Represents 401(k) contributions as well as premiums paid by us pursuant to
a split-dollar life insurance policy established for the benefit of Amrit
Das in the amount of $15,568 in 2001, $16,855 in 2000 and $7,006 in 1999.
(3) Represents 401(k) contributions made by us on behalf of the executive
officer.
(4) Information related to fiscal 1999 is omitted since Stephen Owen did not
meet the criteria to be included in this table during that year.
(5) Represents car allowance.
(6) Represents contributions to pension plan.
(7) Information related to fiscal 1999 and 2000 is omitted since Santanu Das
did not meet the criteria to be included in this table during those years.
(8) Represents 401(k) contributions as well as premiums paid by us pursuant to
a life insurance policy established for the benefit of Santanu Das in the
amount of $5,150 in 2001.
-6-
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table provides information regarding options granted in
the fiscal year ended March 31, 2001 to the executive officers named in the
summary compensation table. We have never granted any stock appreciation rights.
NUMBER OF PERCENTAGE OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(1) FISCAL YEAR(2) PER SHARE DATE
---- ----------- --------------- --------- --------
Amrit Das 30,000 5.6% $3.38 12/7/10
Jyoti Chatterjee 30,000 5.6% $3.38 12/7/10
Clara Young 9,000 1.7% $3.38 12/7/10
Stephen Owen 12,000 2.2% $3.38 12/7/10
Santanu Das 30,000 5.6% $3.38 12/7/10
--------------------
(1) Options vest in equal installments annually over three years commencing
one year from grant date.
(2) Based on options to purchase 534,000 shares granted to our employees
during the fiscal year ended March 31, 2001.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table provides information regarding stock options
exercised during the fiscal year ended March 31, 2001 by the executive officers
named in the summary compensation table, as well as the number of exercisable
and unexercisable in-the-money stock options and their values at fiscal year
end. An option is in-the-money if the fair market value for the underlying
securities exceeds the exercise price of the option.
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
MARCH 31, 2001 MARCH 31, 2001(1)
ACQUIRED ON VALUE --------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
Amrit Das 0 0 130,000 70,000 $390,000 $210,000
Jyoti Chatterjee 0 0 192,667 63,333 $578,000 $190,000
Clara Young 0 0 68,667 17,333 $206,000 $ 52,000
Stephen Owen 0 0 66,667 25,333 $200,000 $ 76,000
Santanu Das 0 0 150,000 50,000 $450,000 $150,000
---------------------
(1) Based on the last reported sale price of underlying securities ($3.00) on
March 30, 2001 (the last trading day during our fiscal year) as reported by
Nasdaq, minus the exercise price of the options.
EMPLOYMENT AGREEMENTS
In May 1996, we entered into five-year employment agreements with each
of Amrit Das, Jyoti Chatterjee and Clara Young. In June 2001, we entered into
new five-year agreements with each of these individuals and in addition entered
into a five-year employment agreement with Santanu Das. The new agreements
provide that Mr. Amrit Das, Mr. Chatterjee, Ms. Young and Mr. Santanu Das will
receive minimum base annual salaries of $312,000, $202,800, $117,000 and
$120,000, respectively. Each employment agreement also provides for the grant of
an annual bonus with such bonuses, if any, to be determined by the Compensation
Committee of the Board of Directors.
-7-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is certain information as of September 28, 2001
regarding the beneficial ownership of our common stock by:
o all directors and nominees for director;
o each of our executive officers named in the summary
compensation table in this proxy statement;
o all directors, nominees for director and executive officers as
a group; and
o each person known by us to own 5% or more of our voting
securities.
To our knowledge, other than as set forth in the following table, there
are no other stockholders owning 5% or more of our voting securities.
Beneficial ownership is determined in accordance with the rules of the
SEC. Except as indicated by footnote, and subject to community property laws,
where applicable, the persons named in the table below have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them. Shares of common stock subject to options currently
exercisable, or exercisable within 60 days after September 28, 2001, are deemed
to be outstanding in calculating the percentage ownership of a person or group
but are not deemed to be outstanding as to any other person or group.
AMOUNT AND NATURE PERCENT OF
NAME OF BENEFICIAL OR IDENTITY OF GROUP OF BENEFICIAL OWNERSHIP COMMON STOCK
--------------------------------------- ----------------------- ------------
Amrit K. Das(1) 2,689,518 15.8%
Jyoti Chatterjee(2) 457,957 2.7%
Bruce E. Cummings(3) 20,000 *
Santanu Das(4) 2,704,900 15.9%
Stephen Owen(5) 150,191 *
Garret Vreeland 0 -
John Pepin 121,200 *
Clara Young(6) 104,039 *
Charles Sleichter III(7) 14,000 *
Sormistha Das 1,862,924 11.0%
Peter R. Kellogg 3,776,500 22.4%
All director nominees and executive 6,140,605 35.1%
officers as a group (9 persons)(8)
--------------------
* Less than 1%.
(1) Includes 2,509,518 shares of common stock held by the A. and P. Das Living
Trust, 50,000 shares held by the Purabi Das Foundation for which Mr. Das is
the trustee and 130,000 shares of common stock underlying options, which
are exercisable as of September 28, 2001 or within 60 days after such date.
Does not include 1,862,924 shares of common stock held by Mr. Das'
daughter, Sormistha Das, or 2,704,900 shares of common stock beneficially
held by Mr. Das' son, Santanu Das. Mr. Das disclaims beneficial ownership
of the shares of common stock held by Sormistha Das and Santanu Das.
-8-
(2) Includes 192,667 shares of common stock underlying options, which are
exercisable as of September 28, 2001 or within 60 days after such date.
(3) Includes 20,000 shares of common stock underlying options, which are
exercisable as of September 28, 2001 or within 60 days after such date.
(4) Includes 150,000 shares of common stock underlying options, which are
exercisable as of September 28, 2001 or within 60 days after such date. Mr.
Das is the son of Amrit Das, our Chief Executive Officer.
(5) Includes 66,667 shares of common stock underlying options, which are
exercisable as of September 28, 2001 or within 60 days after such date.
Also includes 38,202 shares of common stock separately owned by Mr. Owen's
spouse.
(6) Includes 68,667 shares of common stock underlying options, which are
exercisable as of September 28, 2001 or within 60 days after such date.
(7) Represents 14,000 shares of common stock underlying options, which are
exercisable as of September 28, 2001 or within 60 days after such date.
(8) Includes 642,001 shares of common stock underlying options, which are
exercisable as of September 28, 2001 or within 60 days after such date.
-9-
PROPOSAL 2
INDEPENDENT AUDITORS
Our Board of Directors has appointed KPMG LLP, independent auditors, to
audit and comment on our consolidated financial statements for the fiscal year
beginning April 1, 2001, and to conduct whatever audit functions are deemed
necessary pursuant thereto. KPMG LLP audited our 2001 consolidated financial
statements included in the 2001 annual report to stockholders.
It is anticipated that a representative of KPMG LLP will be present at
the annual meeting and will be given the opportunity to make a statement, if
desired, and to respond to appropriate questions, if any, concerning their
engagement.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We provide digital media production services to Ruby Pictures, Inc.
Ruby Pictures is a movie production house owned and operated by the Purabi Das
Foundation, Inc., a charitable organization founded by Amrit Das, our Chairman
and CEO. We recognized $324,000 in revenue for the fiscal year ended March 31,
2000 related to these services and had a receivable balance due from Ruby
Pictures of $284,000 at March 31, 2000. In fiscal 2001, we entered into an
agreement with Ruby Pictures to purchase the rights to a digital film produced
by Ruby Pictures for $500,000, net of any unreimbursed costs incurred by us in
the production of this film. The outstanding receivable balance due from Ruby
Pictures was offset against the purchase price, and a net payment was made in
April 2001. We plan to use this film as a promotional tool for our digital media
and animation services business segment and also plan to generate direct
revenues through distribution of this film.
OTHER MATTERS
Our Board of Directors knows of no other matters to be brought before
the annual meeting. However, if other matters should come before the annual
meeting, it is the intention of the person named in the proxy to vote such proxy
in accordance with his judgment on such matters.
ANNUAL REPORT ON FORM 10-KSB
A copy of our annual report to the SEC on Form 10-KSB is available
without charge to stockholders and may be obtained by writing to Investor
Relations Department, netGuru, Inc., 22700 Savi Ranch Parkway, Yorba Linda,
California 92887.
STOCKHOLDER PROPOSALS
Pursuant to Regulation 14a-8 of the SEC, proposals by stockholders
which are intended for inclusion in our proxy statement and proxy and to be
presented at our next annual meeting must be received by us by July 11, 2002, in
order to be considered for inclusion our proxy materials. Such proposals shall
be addressed to our Secretary and may be included in next year's proxy materials
if they comply with certain rules and regulations of the SEC governing
stockholder proposals. For all other proposals by stockholders to be timely, a
stockholder's notice must be delivered to, or mailed and received at, our
principal executive offices not later than September 22, 2002. If a stockholder
fails to so notify us of any such proposal prior to such date, our management
will be allowed to use its discretionary voting authority with respect to
proxies held by management when the proposal is raised at the annual meeting
(without any discussion of the matter in our proxy statement).
-10-
STOCKHOLDERS ARE URGED TO COMPLETE, SIGN AND RETURN PROMPTLY THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
/s/ Amrit K. Das
Chief Executive Officer
Yorba Linda, California
October 15, 2001
-11-
APPENDIX A
AUDIT COMMITTEE CHARTER
1. Members. The Board of Directors shall appoint an Audit Committee of
at least three members, consisting entirely of "independent" directors of the
Board, and shall designate one member as chairperson. For purposes hereof,
"independent" shall mean a director who meets the NASD's definition of
"independent." Each member of the Company's audit committee must be financially
literate and one member of the audit committee shall have accounting or related
financial management expertise, both as provided in the NASD rules.
2. Purposes, Duties, and Responsibilities. The Audit Committee shall
represent the Board of Directors in discharging its responsibility relating to
the accounting, reporting, and financial practices of the Company and its
subsidiaries, and shall have general responsibility for surveillance of internal
controls and accounting and audit activities of the Company and its
subsidiaries. Specifically, the Audit Committee shall:
(a) Recommend to the Board of Directors, and evaluate, the
firm of independent certified public accountants to be appointed as
auditors of the Company, which firm shall be ultimately accountable to
the Board of Directors through the Audit Committee.
(b) Review with the independent auditors their audit
procedures, including the scope, fees and timing of the audit, and the
results of the annual audit examination and any accompanying management
letters.
(c) Review the written statement from the outside auditor of
the Company concerning any relationships between the auditor and the
Company or any other relationships that may adversely affect the
independence of the auditor and assess the independence of the outside
auditor as required under Independent Standard Boards Standard No. 1.
(d) Review and discuss with management and the independent
auditors the Company's annual audited consolidated financial
statements, including an analysis of the auditors' judgment as to the
quality of the Company's accounting principles.
(e) Review with management and the independent auditors the
results of any significant matters identified as a result of the
independent auditors' interim review procedures prior to the filing of
each Form 10-QSB or as soon thereafter as possible.
(f) Review the adequacy of the Company's internal controls.
(g) Review significant changes in the accounting policies of
the Company and accounting and financial reporting rule change that may
have a significant impact on the Company's financial reports.
(h) Review material pending legal proceedings involving the
Company and other contingent liabilities.
(i) Review the adequacy of the Audit Committee Charter on an
annual basis.
3. Meetings. The Audit Committee shall meet as often as may be deemed
necessary or appropriate in its judgment, generally four times each year, either
in person or telephonically. The Audit Committee shall meet in executive session
with the independent auditors at least annually. The Audit Committee shall
report to the full Board of Directors with respect to its meetings. The majority
of the members of the Audit Committee shall constitute a quorum.
-12-
NETGURU, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of netGuru, Inc. ("Company") hereby constitutes
and appoints Amrit K. Das, with the power to appoint his substitution, as
attorney and proxy, to appear, attend and vote all of the shares of common stock
of the Company standing in the name of the undersigned on the record date at the
2001 Annual Meeting of Stockholders of the Company to be held at the Company's
offices located at 22700 Savi Ranch Parkway, Yorba Linda, California 92887, on
November 15, 2001, at 10:00 a.m. local time, and at any adjournments thereof,
upon the following:
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
Please Detach and Mail in the Envelope Provided
--------------------------------------------------------------------------------
[X] Please mark your
votes as in this
example
FOR all nominees WITHHOLD
listed at right, except AUTHORITY
as marked to the to vote for all nominees
contrary below listed at right
1. To elect +--+ +--+ NOMINEES:
seven | | | | Amrit K. Das
directors as +--+ +--+ Jyoti Chatterjee
follows: Bruce E. Cummings
Santanu Das
(INSTRUCTION: To withhold authority to vote for any Stephen Owen
individual nominee, strike a line through the Garret W. Vreeland
nominee's name in the list provided at right.) John J. Pepin
2. To consider and vote upon a proposal to ratify FOR AGAINST ABSTAIN
the appointment of KPMG LLP, independent +--+ +--+ +--+
auditors, to audit the consolidated financial | | | | | |
statements of the Company for the fiscal year +--+ +--+ +--+
beginning April 1, 2001.
3. To vote in his discretion on such other business as may properly come before
the meeting, or any adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE PROPOSALS INDICATED AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXY
HOLDER ON ANY OTHER BUSINESS. ALL OTHER PROXIES HERETOFORE GIVEN BY THE
UNDERSIGNED IN CONNECTION WITH THE ACTIONS PROPOSED ON THE REVERSE ARE HEREBY
EXPRESSLY REVOKED. THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED BY
WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY, BY ISSUANCE OF A SUBSEQUENT
PROXY OR BY VOTING AT THE ANNUAL MEETING IN PERSON.
PLEASE CHECK IF YOU ARE PLANNING +--+
TO ATTEND THE ANNUAL MEETING | |
+--+
DATED:
------------------------------ ---------------------- ------------
(Signature of Stockholder(s)) (Print Name(s) Here)
NOTE: Please mark, date, sign and return this proxy promptly in the enclosed
envelope. When shares are held by joint tenants, both should sign. When
signing as attorney, as executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.