SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)
(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-12
NEXTPATH TECHNOLOGIES, INC.
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(Name of the Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
[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:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computered
pursuant to Exchange Act Rule 0-11 (Set forth the amount of which the
filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] 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:
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4. Date Filed:
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NEXTPATH TECHNOLOGIES, INC.
5050 NORTH 40TH STREET, SUITE 340
PHOENIX, ARIZONA 85016
November 3, 2000
Dear Shareholder:
You are invited to attend the Annual Meeting of Shareholders of NextPath
Technologies, Inc. (the "Company"), to be held on Tuesday, December 5, 2000, at
the Marriott Hotel, 3233 N.W. Expressway, Oklahoma City, Oklahoma, at 10:00 a.m.
(Central Standard Time). A Notice of the Annual Meeting of Shareholders,
together with a Proxy Statement and a Proxy Card, accompany this letter.
Matters to be considered at the Annual Meeting of Shareholders are (i)
the election of four members to the Board of Directors of the Company, two of
whom will serve a one year term until the Annual Meeting of the Shareholders of
the Company to be held in the year 2001 and two of whom will serve a two year
term until the Annual Meeting of the Shareholders of the Company to be held in
the year 2002, and in any case until their successors are duly elected and shall
have qualified; (ii) a proposal to ratify the selection of Chisholm & Associates
as independent auditors of the Company for the fiscal year ending December 31,
2000; (iii) the approval of an Incentive Stock Option Plan; (v) the approval of
a Directors' Stock Option Plan, and (vi) any other matters which may properly
come before the Annual Meeting. Details of the matters to be considered at the
Annual Meeting of Shareholders appear in the Proxy Statement. Other than the
election of Directors, the proposal to ratify the selection of the Company's
independent auditors, the approval of an Incentive Stock Option Plan and the
approval of a Directors' Stock Option Plan, the Board of Directors of the
Company does not know at this time of any other matters to come before the
Annual Meeting.
We hope that you will be able to attend the Annual Meeting of
Shareholders so that we may have the opportunity to meet with you and to discuss
the affairs of the Company. HOWEVER, WHETHER OR NOT YOU PLAN TO ATTEND THE
ANNUAL MEETING OF SHAREHOLDERS, PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY TO
ENSURE THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING AND TO ENSURE THAT YOUR
SHARES ARE VOTED.
We look forward to seeing you at the Annual Meeting.
Sincerely,
James D. Wilson
President and Chief Executive Officer
NextPath Technologies, Inc.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of Shareholders (the
"Annual Meeting") of NextPath Technologies, Inc., a Nevada corporation
("NextPath" or the "Company"), will be held at the Marriott Hotel, 3233 NW
Expressway, Oklahoma City, Oklahoma on Tuesday, December 5, 2000, at 10:00 a.m.
(Central Standard Time), for the following purposes:
1. To elect four members to the Board of Directors of the Company, two
of whom will serve a one year term until the Annual Meeting of the
Shareholders of the Company to be held in the year 2001 and two of
whom will serve a two year term until the Annual Meeting of the
Shareholders of the Company to be held in the year 2002, and in any
case until their successors are duly elected and shall have
qualified;
2. To consider and vote upon a proposal to ratify the selection of
Chisholm & Associates as independent auditors of the Company for the
fiscal year ending December 31, 2000;
3. To approve an Incentive Stock Option Plan;
4. To approve a Directors' Stock Option Plan; and
5. To consider and transact such other business as may properly come
before the Annual Meeting.
Holders of record of the validly issued Common Stock of the Company at
the close of business on October 23, 2000 are entitled to notice of, and to vote
on, all matters to be considered at the Annual Meeting.
By Order of the Board of Directors,
NEXTPATH TECHNOLOGIES, INC.
Kary Lewis, Secretary
Dated: November 3, 2000
PROXY STATEMENT
GENERAL
This Proxy is solicited by the Board of Directors of the Company for use
at the Annual Meeting of Shareholders which will be held at the Marriott Hotel,
3233 NW Expressway, Oklahoma City, Oklahoma on Tuesday, December 5, 2000, at
10:00 a.m. (Central Standard Time).
VOTING MATTERS
The Company's authorized common equity securities consist of par value
$0.001 per share voting common stock ("Common Stock") and Class A non-voting
common stock with conversion rights to voting common stock ("Class A Common
Stock"). No Class A Common Stock is outstanding. The Company is authorized to
issue preferred stock, but had no preferred stock outstanding. Except as
otherwise described herein, all shares of Common Stock entitle the holders
thereof to the same rights and privileges. The holders of validly issued Common
Stock are entitled to one vote per share on all matters to be voted upon by the
Shareholders.
The representation in person or by proxy of a majority of the
outstanding shares of the Common Stock entitled to a vote at the Annual Meeting
is necessary to provide a quorum for the transaction of business at the Annual
Meeting. Shares can only be voted if the shareholder is present in person or is
represented by a properly signed proxy. Each shareholder's vote is very
important. Whether or not you plan to attend the Annual Meeting in person,
please sign and promptly return the enclosed proxy card. All signed and returned
proxies will be counted towards establishing a quorum for the meeting,
regardless of how the shares are voted.
Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate box on the
proxy card. If your proxy card is signed and returned without specifying
choices, your shares will be voted FOR the Board of Director's proposals, and as
the individuals named as proxy deem advisable on all other matters as may
properly come before the Annual Meeting.
For all matters to be voted upon at the Annual Meeting, the affirmative
vote of a majority of validly issued shares present in person or represented by
proxy, and entitled to vote on the matter, is necessary for approval.
Withholding authority to vote or an instruction to abstain from voting on a
proposal will be treated as shares present and entitled to vote and, for
purposes of determining the outcome of the vote, will have the same effect as a
vote against the proposal. A broker "non-vote" occurs when a nominee holding
shares for a beneficial holder does not have discretionary voting power and does
not receive voting instructions from the beneficial owner. Broker "non-votes"
will not be treated as shares present and entitled to vote on a voting matter
and will have no effect on the outcome of the vote.
Any shareholder giving the enclosed Proxy has the power to revoke the
Proxy prior to exercise either by voting by ballot at the Annual Meeting, by
executing a later-dated Proxy, or by delivering a signed written notice of the
revocation to the office of the Secretary of the Company before the meeting
begins. The Proxy will be voted at the meeting if the signer of the Proxy was a
shareholder of record on October 23, 2000 (the "Record Date").
On the Record Date, there were 45,294,800 shares of Common Stock
outstanding. The Company disputes the validity of approximately 18,000,000 of
those shares and they are the subject of an ongoing review by the Company in an
effort to determine whether or not they were validly issued and entitled to vote
at the Annual Meeting. The Company has filed lawsuits in some cases and may file
additional lawsuits. See "Legal Proceedings." Each validly issued outstanding
share of Common Stock is entitled to one vote. This Proxy Statement is first
being sent to the shareholders on or about November 3, 2000. A list of the
shareholders entitled to vote at the Annual Meeting will be available for
inspection at the meeting for purposes relating to the meeting.
SOLICITATION OF PROXIES
The Company has retained Corporate Investor Communications, Inc. as
proxy solicitor for a fee. Solicitation of Proxies may also be made through
officers and regular employees of the Company by telephone or in person with
some shareholders following the original solicitation period. No additional
compensation will be paid to those officers and regular employees for proxy
solicitation. Expenses and fees incurred in the solicitation of Proxies will be
borne by the Company, including the charges and expenses of brokerage firms and
others for forwarding solicitation material to beneficial owners of Common
Stock. The Company estimates that expenses and fees related to the solicitation
of Proxies will be approximately $7,500 - $10,000.
VOTING
You may vote on matters presented at the Annual Meeting in the following
ways:
By Proxy, by completing the proxy card and mailing it in the postage-
paid envelope provided, or
In Person, by attending the Annual Meeting on Tuesday, December 5, 2000,
at 10:00 a.m. (Central Standard Time) at the Marriott Hotel located at:
3233 NW Expressway
Oklahoma City, Oklahoma
MATTERS TO BE ACTED UPON
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Board of Directors recommends that the shareholders vote FOR each
nominee for Director as set forth below. Four Directors are to be elected at the
meeting, two of whom (Messrs. Lewis and Wilson) will serve a one year term until
the Annual Meeting of the Shareholders of the Company to be held in the year
2001 and two of whom (Messrs. Sweet and Uptain) will serve a two year term until
the Annual Meeting of the Shareholders of the Company to be held in the year
2002, and in any case until their successors are duly elected and shall have
qualified. Although the Company's Bylaws provide for up to nine Directors with
terms to be determined by the Board, only four Directors are being nominated
because it is the Board's belief that the five remaining seats should be filled
over a period of time with independent Directors. Therefore, proxies cannot be
voted for a greater number of persons than the number of nominees named. Only
one vote per share is permitted for each board seat standing for election. The
Company's Articles of Incorporation do not provide for cumulative voting.
Each nominee listed below is currently a Director. The following
information pertains to each nominee's (i) age as of September 1, 2000, (ii)
principal occupations for at least the past five years, and (iii) certain other
directorships:
Name Age Positions Currently Held
- ----------------- ----- ----------------------------------------------
Kenneth Uptain 46 Director, Chairman of the Board
Richard Lewis 46 Director
Kenneth Sweet 48 Director
James Wilson 55 Director, President, Chief Executive Officer
Mr. Uptain has been a Director since August 25, 2000 and the Chairman of
the Board since September 19, 2000. From June 1998 until January 21, 2000, he
was the Chairman, Chief Executive Officer, and owner of Essentia Water, Inc.,
which he sold to NextPath on that date. From August 1997 to June 1998, he was
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CEO of Global Water Technologies located in Seattle, Washington. Mr. Uptain is
recognized as a highly respected business entrepreneur with over twenty years of
business and management experience in a variety of endeavors. In 1994, he was a
founding shareholder of Resource Group International (RGI), now a three billion
dollar publicly traded Norwegian industrial investment company known as AkerRGI,
a company with current holdings that include the largest fishing and processing
fleet in the world, shipbuilding, oil and gas technology, material and handling
systems, consumer products (which included brands such as Brooks Shoes and Helly
Hanson Sportswear), and large residential real estate developments. As Chief
Executive Officer from 1994 to 1997, Mr. Uptain was in charge of the
International Real Estate Division for AkerRGI. He has also served as a director
for numerous companies, including Legend Properties, Inc., a NASDAQ listed real
estate company
Mr. Lewis has been a Director since August 23, 2000. He has eighteen
years of experience in accounting, financial reporting, business administration
and management, mechanical contracting and fabrication, sales and marketing, and
contract negotiations both domestically and internationally. Since August 1991,
he has served as President of Lewis Mechanical and Metalworks, Inc. He was
formerly employed as a CPA for Arthur Andersen and Co. and as Vice President of
Finance for D.B. Western, Inc. Mr. Lewis graduated from Brigham Young University
with a Bachelors of Science - Accounting degree in 1978 and a Master of
Accounting degree in 1979. He also serves as President of NextPath Environmental
Services, Inc. Mr. Lewis is the brother of Kary Lewis, the Company's interim
Chief Financial Officer, Secretary and Treasurer.
Mr. Sweet has been a Director since March 17, 2000. Mr. Sweet has over
nine years of executive director experience in management consulting, business
valuation, mergers and acquisitions, and financial advisory services. Since
1991, Mr. Sweet has been the Executive Director of Consulting Services and one
of the in-house counsel to International Profit Associates (IPA), an
international consulting firm. He has supervised and/or directed in excess of
21,000 client engagements to date. Prior to joining IPA, he was President of
Windbrook Securities, Inc., a broker/dealer, and The Compass Investment Group,
Inc., registered as a Commodity Trading Advisor (CTA). Mr. Sweet also worked
from 1981-1987 at E.F. Hutton & Company, Inc. as an Account Executive. He
received a B.S. in both Business Administration and Accounting from the
University of San Diego in 1974. He also received a Juris Doctorate degree from
Western State College of Law in December 1977.
Mr. Wilson became a Director and the Company's President and Chief
Executive Officer on September 8, 2000. From May 1994 to March 1998, Mr. Wilson
served as President and Chief Executive Officer of Martin Industries, Inc.
("Martin"), where he had been employed since 1982. Mr. Wilson served as Martin's
Controller and Chief Financial Officer before becoming the Chief Executive
Officer. During his tenure at Martin Industries, Mr. Wilson led the Company
in a successful public offering in 1995 and numerous acquisitions while
dramatically increasing Martin's share value. Prior to joining Martin, Mr.
Wilson spent eight years with Consolidated Aluminum Corporation, a company
recognized for it's rapid revenue growth during that period. Mr. Wilson is
a 1968 graduate of the University of North Alabama with a Bachelor of Science in
Accounting and Economics. He also attended MBA programs at Washington
University, St. Louis, Missouri and the University of Tennessee, Columbia,
Tennessee.
PROPOSAL NO. 2 - RATIFICATION OF SELECTION OF AUDITORS
The Audit Committee of the Board of Directors recommends that the shareholders
vote FOR ratification of the selection of the firm of Chisholm & Associates to
audit the consolidated financial statements of the Company and the financial
statements of certain of its subsidiaries for the fiscal year ending December
31, 2000.
PROPOSAL NOS. 3 AND 4
THE INCENTIVE STOCK OPTION PLAN AND
THE DIRECTORS' STOCK OPTION PLAN
The Board of Directors recommends you vote FOR the approval of the
Incentive Stock Option Plan and the Directors' Stock Option Plan.
3
INCENTIVE STOCK OPTION PLAN
- ---------------------------
General. The Board of Directors has unanimously adopted and recommends
that the shareholders approve the Incentive Stock Option Plan. The effective
date of this Plan will be the date on which this proposal is approved by the
shareholders. The maximum number of shares of Common Stock which may be issued
under the Plan is Two Million Five Hundred Thousand (2,500,000). Each Stock
Option may be exercised during a period of ten years from the date of the grant
of the Stock Option (the "Option Term"). No Stock Option is exercisable after
the expiration of its Option Term. The option price per share of Common Stock
deliverable upon the exercise of a Stock Option will be the Fair Market Value of
a share of Common Stock on the date the Stock Option is granted (the "Option
Price"). The Fair Market Value as of any date means the closing price on that
date, or on the next business day if that date is not a business day, of a share
of Common Stock as the price is reported on the OTCBB or other applicable
exchange or market on which the Common Stock is traded. The entire Option Price
with respect to the exercise of a Stock Option is payable in full at the time of
the exercise of the Stock Option unless provided otherwise in the Stock Option
Agreement. A copy of this Plan is attached to this Proxy Statement as Appendix
B-1.
Required Vote. Approval of the Incentive Stock Option Plan requires the
affirmative vote of the holders of a majority of shares of the Company's Common
Stock present in person or by proxy and entitled to vote at the Annual Meeting.
Abstentions and broker non-votes will be counted as present for purposes of
determining whether a quorum is present, and broker non-votes will not be
treated as entitled to vote on this matter at the Annual Meeting.
Plan Activity. As this is a newly proposed plan, the Plan had no
activity during 1999. As of the date of this Proxy Statement, no stock options
have been granted under the Plan.
Purpose. The purpose of the Incentive Stock Option Plan is to further
the long-term growth and earnings of the Company and its subsidiaries by
offering incentives to key employees who will largely be responsible for the
Company's growth. In the view of the Compensation Committee of the Board of
Directors, similar plans have been successful in achieving these objectives. In
light of the Company's recent expansion and strategy for continued growth, the
Board of Directors believes that this Plan is necessary to contribute to the
morale and motivation of the key employees of the Company and its subsidiaries
in the future.
Awards under this Plan will be made to key employees who have the
capability of making a substantial contribution to the success of the Company
and will be in the form of incentive stock options.
Tax Consequences. The Incentive Stock Option Plan is a qualified plan.
Therefore, the tax consequences to the employee will be as follows: (i) there
will be no taxable income to the employee at the time of the grant, (ii) there
will be no taxable income to the employee at the time the option is exercised;
however, the difference between the option price and the fair market value of
the option stock on the date the option is exercised is an adjustment item for
Alternative Minimum Tax purposes; and (iii) the employee will have a capital
gain when the employee disposes of the option stock after completion of the
holding period (i.e., after the option stock has been held until a date that is
both two years after the grant of the option and one year after the option is
exercised); otherwise, the disposition will result in ordinary income and will
be taxed as additional compensation to the employee.
The Company will not be entitled to a tax deduction on the grant or
exercise of an option under this Plan. If a disqualifying disposition occurs,
the Company may deduct as additional compensation to the employee an amount
equal to the amount the employee recognizes as additional compensation.
DIRECTORS' STOCK OPTION PLAN
- ----------------------------
General. The Board of Directors has unanimously adopted and recommends
that the shareholders approve the Directors' Stock Option Plan. The effective
date of this Plan will be the date on which this proposal is approved by the
shareholders. The maximum number of shares of Common Stock which may be issued
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under the Plan is One Million Five Hundred Thousand (1,500,000). Each Stock
Option may be exercised during a period of ten years from the date of the grant
of the Stock Option (the "Option Term"). No Stock Option is exercisable after
the expiration of its Option Term. The option price per share of Common Stock
deliverable upon the exercise of a Stock Option will be the Fair Market Value of
a share of Common Stock on the date the Stock Option is granted (the "Option
Price"). The Fair Market Value as of any date means the closing price on that
date, or on the next business day if that date is not a business day, of a share
of Common Stock as the price is reported on the OTCBB or other applicable
exchange or market on which the Common Stock is traded. The entire Option Price
with respect to the exercise of a Stock Option is payable in full at the time of
the exercise of the Stock Option unless provided otherwise in the Stock Option
Agreement. A copy of this Plan is attached to this Proxy Statement as Appendix
B-2.
Required Vote. Approval of the Directors' Stock Option Plan requires the
affirmative vote of the holders of a majority of shares of the Company's Common
Stock present in person or by proxy and entitled to vote at the Annual Meeting.
Abstentions and broker non-votes will be counted as present for purposes of
determining whether a quorum is present, and broker non-votes will not be
treated as entitled to vote on this matter at the Annual Meeting.
Plan Activity. As this is a newly proposed plan, the Plan had no
activity during 1999. As of the date of this Proxy Statement, no stock options
have been granted under the Plan.
Purpose. The purpose of the Directors' Stock Option Plan is to help
attract new independent Directors and to further the long-term growth and
earnings of the Company and its subsidiaries by offering incentives to members
of the Board of Directors who will play an important role in the Company's
growth. As Directors have previously not been compensated for their service on
the Board of Directors, the Directors' Stock Option Plan also rewards the
Directors for this service. In the view of the Compensation Committee of the
Board of Directors, similar plans have been successful in achieving these
objectives. In light of the Company's recent expansion and strategy for
continued growth, the Board of Directors believes that this Plan is necessary to
attract new independent Directors and will contribute to the morale and
motivation of the Company's Board of Directors.
Tax Consequences. The Directors' Stock Option Plan is a nonqualified
plan. Therefore, the tax consequences to the Director will be as follows: (i)
the option will be taxed as ordinary income on the date of the grant, if the
option has a readily ascertainable fair market value, and there will be no tax
consequences upon the exercise of the option; however, as it is difficult to
establish a readily ascertainable fair market value unless the options are
actively traded, which the Company does not believe will be the case, the option
will be taxed as ordinary income on the date the option is exercised; and (ii)
in either event there will be a capital gain treatment upon subsequent sale of
the stock if held for a least a year from the date of exercise.
The Company will be entitled to a compensation deduction in the year in
which the optionee is taxed and in the amount which the optionee is taxed,
subject to a reasonableness of compensation limitation under Section 162 of the
Code.
SUMMARY OF CERTAIN PLAN FEATURES
- --------------------------------
The following is a summary of certain features common to both the
Incentive Stock Option Plan and the Directors' Stock Option Plan (together, the
"Plans"). This summary is qualified in its entirety by reference to the Plans,
copies of which are attached to this Proxy Statement as Appendices B-1 and B-2,
respectively.
Administration. The Plans will be administered by the Board of
Directors. Only key employees (including those who are corporate officers and
directors) will be eligible for the Incentive Stock Option Plan. All Directors
will be eligible for the Directors' Stock Option Plan. The Board of Directors
will have the power to determine the persons to whom the Incentive Stock Option
Plan will apply, and the time or times at which awards will be granted, the type
of award to be granted and the number of shares to be subject to each award. The
Board of Directors will also have the power to interpret the Plans and to
prescribe rules, regulations and procedures in connection with the operation of
the Plans. All questions of interpretation and application of the Plans, or as
to awards granted under the Plans, are subject to the determination of the Board
of Directors, which will be conclusive and binding.
5
Awards. Awards granted under the Plans are evidenced by agreements
between the individual employee or Director and the Company. Incentive stock
options within the meaning of Section 422 of the Internal Revenue Code of 1986
(the "Code"), as well as options which do not meet the requirements of that
section, may be granted. All options will expire not more than 10 years after
the date of the grant. The exercise price for any option issued under the Plans
will be equal to the fair market value of the Company's Common Stock at the time
the option is granted. Payment of an option's exercise price may be made in cash
or by check or by a combination of the foregoing. Options are not transferable
other than by will or by the laws of descent and distribution. Options may be
exercised only by the optionee or his or her successor.
Amendments. The Board of Directors may, without further action by the
shareholders of the Company, amend the Plans or condition or modify grants of
stock options under the Plans in response to changes in securities or other laws
or rules, regulations or regulatory interpretations thereof applicable to the
Plans or to comply with stock exchange rules or requirements.
The Board of Directors may at any time and from time to time terminate,
modify or amend the Plans in any respect, except that without shareholder
approval, the Board of Directors may not (i) increase the maximum number of
shares of Common Stock which may be issued under the Plans (other than increases
pursuant to an Adjustment, as defined within the Plans), (ii) extend the period
during which any stock option may be granted or exercised, or (iii) extend the
term of the Plans.
Taxation. The Company will be entitled to a deduction for Federal tax
purposes at the same time and in the same amount as the participant is
considered to have realized ordinary income with respect to any option. When a
participant disposes of Common Stock acquired through the exercise of a
non-qualified option, any amount received in excess of the fair market value of
the shares on the date of exercise will be subject to taxation as long-term or
short-term capital gains, depending on the holding period of the shares. If the
amount received is less than the fair market value of the shares, the difference
will be treated as a capital loss for tax purposes. When a participant
ultimately sells Common Stock acquired through exercise of an incentive stock
option, he or she will recognize long-term capital gain or loss on the
difference between the amount received upon disposition and the option price of
the shares on the date of exercise provided that the requisite holding periods
are satisfied.
PROPOSAL NO. 5 - OTHER BUSINESS
The Board of Directors does not know of any other business to be
presented at the Annual Meeting of Shareholders. If any other matters come
before the Annual Meeting, however, it is intended that the persons named in the
enclosed form of Proxy will vote the Proxy in accordance with their best
judgment.
DIRECTORS MEETINGS AND COMMITTEE MEETINGS
Directors Meetings
The Board of Directors held two telephonic meetings and thirteen Special
Meetings by written consent during the fiscal year ended December 31, 1999. None
of the nominees for Directors were Directors in 1999.
Committee Meetings
The Company has standing audit, nominating and compensation committees
of the Board of Directors.
The Audit Committee currently consists of Kenneth Sweet and Kenneth
Uptain. It recommends, subject to approval by the Board of Directors and the
shareholders, the Company's independent accountants, meets with the Company's
independent accountants and accounting personnel and reviews the scope and
results of the audits, assesses the quality of the Company's financial reporting
process, otherwise monitors the Company's compliance with laws and regulations
6
relating to financial reporting requirements, assesses the adequacy and
effectiveness of internal controls, and takes such other action as set forth in
the Charter for the Audit Committee. The current charter for the Audit Committee
was adopted on August 23, 2000 and is attached to this Proxy Statement as
Appendix A. As the Audit Committee was formed in 2000, it held no meetings in
1999.
The Nominating Committee currently consists of Kenneth Uptain and James
Wilson. It nominates a slate of Directors to be recommended to the shareholders
at the annual meeting of shareholders. It also locates, interviews, and
nominates individuals to fill vacancies on the Board of Directors and nominates
the Chairman of the Board. Shareholders are welcome to recommend nominees to the
Nominating Committee for any Director position which is currently vacant or that
will stand for election. Information regarding the nominee's qualifications
should accompany any recommendation. Recommendations should be submitted at
least 120 days prior to the expiration of a Director's term, or within 10 days
following the announcement of any vacancy. Shareholder recommendations may be
submitted to NextPath Technologies, Inc., Shareholder Relations, 5050 North 40th
Street, Suite 340, Phoenix, Arizona 85016. As the Nominating Committee was
formed in 2000, it held no meetings in 1999.
The Compensation Committee, which currently consists of Kenneth Sweet
and Kenneth Uptain, determines, develops and recommends to the Board of
Directors appropriate compensation arrangements for the Company's President,
Chief Executive Officer, and other executive officers, including the
administration of the Company's stock option plans, and determines, develops and
recommends to the Board of Directors appropriate compensation for the members of
the Board of Directors. As the Compensation Committee was formed in 2000, it
held no meetings in 1999.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Compensation of Directors
The Company reimburses Directors for out-of-pocket expenses incurred in
attending Board meetings. In the future, we anticipate paying reasonable and
customary fees, including granting stock options, to our Directors who are not
officers for their services as Directors and for attendance, in person or by
telephone, at each meeting of the Board of Directors, but not for committee
meetings. Officers who are also Directors will not be paid any Director fees.
Summary Compensation Table
The following summarizes, for the fiscal years indicated, the principal
components of compensation for our Chief Executive Officer and our only other
executive officer in 1999.
Long Term Compensation
-----------------------------
Annual Compensation Awards Payouts
--------------------------- -----------------------------
Securities
Other Under All
Annual Restricted lying LTIP Other
Compen Stock Options/ Payouts Compen
Name and Principal Position Year Salary Bonus -sation Award(s) SARs (1) -sation
- --------------------------- ---- ------ ----- ------- ---------- --------- ------- -------
James Ladd 1999 - - - - - -
Former Chairman/
President(2)
Frederic F. Wolfer, Jr. 1999 150,000 - - 100,000 - - -
Former Vice President(3)
- -----------------------
(1) Long Term Incentive Plan.
(2) Mr. Ladd resigned on March 17, 2000.
(3) Mr. Wolfer, our former Vice President, was employed on November 1, 1999
and remains an employee of NextPath Environmental Services, Inc.
7
Options/SAR Grant In Last Fiscal Year
Our executive officers were not granted any options or SARs during 1999.
Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Values
Our executive officers were not granted any options or SARs (Stock
Appreciation Rights) during 1999.
Employment Agreements; Change-In-Control Arrangements
We did not have an employment agreement with Mr. Ladd.
On September 8, 2000, we entered into an employment agreement with James
Wilson, our President and Chief Executive Officer, which expires in September
2003. Under his employment agreement, Mr. Wilson is entitled to participate in
all the employee benefit programs of the Company in effect from time to time, to
reimbursement of business expenses, and to vacation and sick leave. He also
received a signing bonus of 25,000 shares of restricted common stock and is
eligible to receive an annual cash bonus of up to 100% of his base salary
($145,000). The Company is in the process of negotiating a Change in Control
Agreement with Mr.
Wilson.
The employment agreement of Mr. Wolfer expires in October 2004. Under
his employment agreement, Mr. Wolfer is entitled to participate in all the
employee benefit programs of the Company in effect from time to time, to
reimbursement of business expenses, and to vacation and sick leave.
Restricted Stock Plans
As part of the consideration we paid for LaserWireless, Inc., on October
18, 1999, we placed 500,000 shares of restricted common stock in a Restricted
Stock Plan for the benefit of the employees of LaserWireless, Inc. An employee
will become vested with respect to the shares of common stock represented by his
or her Restricted Stock Award Agreement on the fifth anniversary of the date of
the grant, provided he or she continuously serves as an employee of
LaserWireless, Inc. or another of our subsidiaries at all times beginning with
the date of the grant and ending on the fifth anniversary of the grant.
Stock Option Plans
As part of the consideration we paid for Essentia Water, Inc. on January
21, 2000, we placed 134,518 shares of restricted common stock in Essentia's
Stock Option Plan for the benefit of the employees of Essentia other than Mr.
Uptain. The options vest 20% per year over a period of five years from an
employee's date of employment.
We recognize the need to implement Company stock option plans so that we
may attract and retain the high quality employees, consultants and directors
necessary to build our infrastructure and to provide ongoing incentives to our
employees by enabling them to participate in our success. For that reason, the
Incentive Stock Option Plan and the Directors' Stock Option Plan are being
submitted to the shareholders. As of the date of this Proxy Statement, no stock
options have been granted under the Incentive Stock Option Plan and the
Directors' Stock Option Plan.
401(k) Plan
We anticipate that we will adopt an employee investment plan under
Section 401(k) of the Code.
Certain Relationships and Related Transactions
Since January 1, 1999, the following transactions involving an amount in
excess of $60,000 occurred between the Company or its subsidiaries and the named
Director:
8
Mr. Sweet is an Executive Director Consulting Services of International
Profit Associates, Inc. headquartered in Buffalo Grove, Illinois, a suburb of
Chicago ("IPA"). Mr. Woodward, a Director and our former Chief Financial
Officer, was also an employee of IPA. We entered into a Management Consulting
Agreement with IPA by which employees of IPA provide management services to us
on an as needed basis. That agreement has expired. Since January 1, 1999, we
have paid IPA $1,466,727 and have issued IPA 300,000 shares of restricted common
stock for consulting services. On February 15, 2000, IPA loaned the Company
$1,000,000. Principal and accrued interest on the loan was due on May 15, 2000.
The terms of the promissory note provided that if the Company was unable to
repay the promissory note on or before May 15, 2000, IPA was entitled to 250,000
shares of the Company's restricted common stock in complete satisfaction of the
loan, which would be automatically deemed paid as of that date. The Company was
unable to repay the promissory note when due; therefore, IPA is entitled to
receive 250,000 shares of the Company's restricted common stock.
On January 21, 2000, we issued Moneta Holdings, LLC, a Washington
limited liability company owned by Mr. Uptain ("Moneta"), $7,654,294 worth of
restricted common stock with piggy-back registration rights (565,127 shares) for
Essentia Water, Inc. ("Essentia"). As part of the transaction, we also paid
Moneta $400,000 plus accrued interest as repayment of loans it had made to
Essentia. Upon closing, Mr. Uptain and Essentia also entered into a Consulting
Agreement whereby Mr. Uptain, as Chief Executive Officer, received $56,666
($7,083 per month) prior to its termination on August 31, 2000.
On August 4, 2000, we paid $1,675,000, assumed $2,400,000 in debt and
assumed $2,200,000 in equipment leases to acquire the Industrial Division of
Lewis Mechanical and Metalworks, Inc. ("Lewis Mechanical"), a wholly owned
subsidiary of the Lewis Construction Corporation, of which Mr. Lewis owns 34 %.
In addition, we are obligated to issue 2,439,025 shares of our restricted common
stock, valued at closing at $5,000,000, to Lewis Mechanical based on the further
performance of our subsidiary, NextPath Environmental Services, Inc. ("NESI")
over the next two years. In addition, we purchased oil remediation equipment and
a non-exclusive worldwide license to an oil remediation system from Tetra
Separation Systems, LLC, an affiliate of Lewis Mechanical owned 10% by Mr.
Lewis. Mr. Lewis serves as President of NESI under a two year employment
agreement.
Indebtedness of Management
To our knowledge, none of our Directors and executive officers and no
nominee for election as a Director has been indebted to us or our subsidiaries
in excess of $60,000 at any time since January 1, 1999.
Compensation Committee Report
General. The Compensation Committee of the Board of Directors is
responsible for administering the compensation of senior executives of the
Company. The Compensation Committee was established on April 1, 2000. Its
current members are Kenneth Sweet and Kenneth Uptain. During 1999, the only
executive officer receiving compensation was Mr. Wolfer, whose employment
agreement was negotiated by our former Chairman and Chief Executive Officer,
James Ladd. Mr. Wilson and Mr. Woodward signed Employment Agreements with the
Company in September 2000. Mr. Woodward, the Company's former Chief Financial
Officer, resigned October 26, 2000. On October 26, 2000, Kary Lewis was elected
the Company's interim Chief Financial Officer.
The Company's executive compensation programs are designed to align the
interests of senior management with those of the Company's shareholders. There
are three key components of executive compensation: base salary, pay for
performance (bonus plan), and long term performance incentive. It is the intent
of these programs to attract, motivate and retain senior executives. It is the
philosophy of the Compensation Committee to allocate an appropriate portion of
cash compensation to variable performance-based compensation in order to reward
executives for high achievement.
Base Salary. The salaries for senior executives are based upon a
combination of factors including past individual performance and experience,
competitive salary levels, and an individual's potential for making significant
contributions to future Company performance.
Bonus Plan. Mr. Wilson and possibly other key personnel of the Company
will participate in an executive management bonus plan (the "Bonus Plan"). The
9
Bonus Plan will provide for annual bonus awards based upon individual
performance and actual operating results compared to planned operating results.
Bonus payments are subject to modification at the discretion of the Compensation
Committee. Other than Mr. Wolfer's signing bonus in the form of restricted
stock, no bonuses were paid in 1999.
Stock Options and Restricted Stock. Stock options and restricted stock
are an important component of senior executive compensation. We recognize the
need to implement a stock option plan so that we may attract and retain the high
quality employees, consultants and directors necessary to build our
infrastructure and to provide ongoing incentives to our employees by enabling
them to participate in our success. Therefore, we are proposing and submitting
to our shareholders an Incentive Stock Option Plan and a Directors' Stock Option
Plan as part of this proxy solicitation.
Chief Executive Officer. The compensation policies described above will
apply as well to the compensation of the CEO. The Compensation Committee is
directly responsible for determining the CEO's salary level and for all awards
and grants to the CEO under incentive components of the compensation program.
The overall compensation package of the CEO is designed to recognize the fact
that the CEO bears primary responsibility for increasing the value of our
shareholders' investments. Accordingly, a substantial portion of the CEO's
compensation will be incentive-based, providing greater compensation as the
direct and indirect financial measures of shareholder value increase. The CEO's
compensation will thus be structured and administered to motivate and reward the
successful exercise of these qualities.
Conclusion. Through the programs described above, a significant portion
of the Company's executive compensation will be linked directly to corporate
performance and stock price appreciation. The Compensation Committee believes
that compensation policies and programs will be competitive and will effectively
align executive compensation with the Company's goal of maximizing the return to
shareholders.
/s/ Kenneth Sweet and Kenneth Uptain
PRICE RANGE OF OUR COMMON STOCK
Market Information
The following table sets forth the high and low closing prices per share
of our common stock for each full quarterly period during the two most recent
fiscal years as reported by the OTC Bulletin Board:
High Low
---- ---
Year Ended December 31, 1998
First Quarter ............................ $ N/A $ N/A
Second Quarter ........................... .50 .38
Third Quarter ............................ .44 .38
Fourth Quarter ........................... .63 .38
Year Ended December 31, 1999
First Quarter ............................ $1.00 $ .44
Second Quarter ........................... 2.38 .88
Third Quarter ............................ 7.00 1.93
Fourth Quarter............................ 25.00 7.00
Year Ended December 31, 2000
First Quarter ............................ $25.06 $12.50
Second Quarter ........................... 16.63 2.00
Third Quarter............................. 2.63 .88
Bid prices for the OTC Bulletin Board reflect inter-dealer prices, do
not include retail mark-ups, mark-downs and commissions, and do not necessarily
reflect actual transactions.
10
Performance Graph
The following table and graph compare the cumulative total return on
$100 invested beginning July 23, 1999 (the first date of material public trading
on the OTCBB) through June 30, 2000 at the end of each respective quarter based
upon the closing price on the OTCBB for the Common Stock. The return of the
indices is calculated assuming reinvestment of dividends during the period
presented. The Company has not paid any dividends. The stock price performance
shown on the graph is not necessarily indicative of future performance. We have
presented the Nasdaq Composite Index (NASDAQ), Amex Computer Technology Index
(XCI) and Amex Interactive Internet Index (IIX) in comparison to NextPath's
(NPTK) performance. The table presents the value of $100 invested of July 23,
1999 and its respective value based upon the closing price on the indicated
dates. The chart is a line graph of the table values.
NextPath is divided into four operating groups as follows: Precision
Technologies Group, Internet and E-Commerce Group, Environmental Technologies
Group, and Health Products Group. Industry or Sector indices are presented
primarily for comparison of NextPath's Internet and E-Commerce group and are not
intended to reflect NextPath's composite operations or its other operating
groups. Industry or Sector indices were either not available or did not
accurately compare to operations for NextPath's other operating groups. As of
the Record Date, the closing price of our Common Stock on the OTCBB was $.50.
Value of $100 Invested as of July 23, 1999
------------------------------------------
07/23/1999 09/30/1999 12/31/1999 03/31/2000 06/30/2000
NPTK $100.00 $181.67 $493.33 $361.67 $70.00
NASDAQ $100.00 $102.00 $171.20 $169.84 $147.31
XCI $100.00 $105.11 $139.01 $165.70 $151.96
IIX $100.00 $109.52 $194.32 $210.63 $167.87
11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the Record Date, there were 45,294,800 shares of Common Stock
outstanding. The Company disputes the validity of approximately 18,000,000 of
those shares and they are the subject of an ongoing review by the Company in an
effort to determine whether or not they were validly issued and entitled to vote
at the Annual Meeting. The following table provides information concerning the
ownership of our Common Stock as of the Record Date by (i) each director and
nominee for director; (ii) each of our named executive officers; (iii) all of
our executive officers and directors as a group; and (iv) all those known by us
to be beneficial owners of more than 5% of our Common Stock.
Unless otherwise indicated, each person named in the table has sole
voting power and investment power, or shares voting investment power with his or
her spouse, for all shares listed as owned by that person. The number of shares
of common stock outstanding for each listed person includes any shares the
individual has the right to acquire within 60 days of this Proxy Statement. For
purposes of calculating each person's or group's percentage ownership, stock
options exercisable within 60 days, if any, are included for that person or
group, but not for the stock ownership of any other person or group.
Name and Address of Shares Benefically Owned Percentage Owned
Beneficial Owner
- ------------------- ------------------------ ----------------
Directors and Executive Officers
Richard Lewis (1) 21,000 *
15134 West Hunziker
Pocatello, Idaho 83202
Kenneth E. Sweet (2) 56,907 *
1250 Barclay Boulevard
Buffalo Grove, Illinois 60089
Kenneth Uptain (3) 590,124 1%
23711 Meridian Avenue South
Bothell, Washington 98021
James Wilson 25,000 *
15100 Central Avenue S.E.
Albuquerque, NM 87192
Robert Woodward 20,000 *
15100 Central Avenue S.E.
Albuquerque, NM 87192
Kary Lewis (4) - *
15134 West Hunziker
Pocatello, Idaeo 83202
All executive officers and 713,031 2%
directors as a group
(6 persons)
5% Shareholders
W.O.W. Consulting Group 6,467,877 14.3%
(Steve Martin)(5)
18352 Dallas Parkway,
#136-440
Dallas, TX 75287
- --------------------------
* Less than one percent.
(1) As consideration paid by NextPath Environmental Services, Inc. ("NESI")
to Lewis Mechanical and Metalworks, Inc. ("Lewis Mechanical") when NESI
acquired the assets of the Industrial Division of Lewis Mechanical,
Lewis Mechanical is eligible to earn up to 2,439,025 shares of the
Company's Common Stock over a two year period based upon the terms and
conditions of a stock earn-out. Mr. Lewis owns 34% of the stock of the
Lewis Construction Corporation, which is the parent of Lewis Mechanical.
12
(2) Mr. Sweet has the contractual right to acquire an additional 109,453
shares of the shares currently held by International Profit Associates,
with whom he has an agreement.
(3) Mr. Uptain is the sole equity owner of Moneta Holdings LLC, the holder
of 565,127 of these shares.
(4) Kary Lewis is interim CFO, Secretary and Treasurer of the Company. He is
the brother of Richard Lewis. As consideration paid by NextPath
Environmental Services, Inc. ("NESI") to Lewis Mechanical and
Metalworks, Inc. ("Lewis Mechanical") when NESI acquired the assets
of the Industrial Division of Lewis Mechanical, Lewis Mechanical is
eligible to earn up to 2,439,025 shares of the Company's Common Stock
over a two year period based upon the terms and conditions of a stock
earn-out. Mr. Lewis owns 11% of the stock of the Lewis Construction
Corporation, which is the parent of Lewis Mechanical.
(5) Pursuant to a Schedule 13D filed by Mr. Martin. The Company disputes
that Mr. Martin is entitled to ownership of these shares and has
initiated legal action seeking a judicial determination as to Mr.
Martin's entitlement to these shares.
DIRECTOR, OFFICER AND TEN PERCENT SHAREHOLDER SECURITIES REPORTS
We understand, and have so advised our officers and directors, that the
Federal securities laws require them, as well as persons who own more than ten
percent of our stock, to file with the SEC initial reports of ownership and
reports of changes in ownership of our stock owned by them. None of the nominees
for Directors was an officer, director or owner of more than ten percent of our
stock in 1999. Therefore, no nominee was required to file reports in 1999.
INDEPENDENT PUBLIC ACCOUNTANTS
In General
Chisholm & Associates, CPA has been selected by the Audit Committee as
the auditors to audit the consolidated financial statements of the Company and
the financial statements of certain of its subsidiaries for the fiscal year
ending December 31, 2000.
Crouch, Bierwolf & Chisholm, Certified Public Accountants ("Crouch,
Bierwolf & Chisholm") was the Company's auditor for the fiscal years ended
December 31, 1999, 1998 and 1997. Todd Chisholm left his partnership with
Crouch, Bierwolf & Chisholm to form his own accounting and tax firm, Chisholm &
Associates, CPA. Chisholm & Associates, CPA is located at 28 North Fairway Drive
(P.O. Box 540216), North Salt Lake City, UT 84054. As Mr. Chisholm was the audit
partner at Crouch, Bierwolf & Chisholm responsible for NextPath's financial
statements, the Audit Committee selected Mr. Chisholm's new firm to continue to
serve as NextPath's auditor.
Crouch, Bierwolf & Chisholm was dismissed on February 8, 2000 so that we
could engage the services of Gray & Northcutt Inc. The decision to change
accountants was recommended and approved by our Board of Directors. Crouch,
Bierwolf & Chisholm stated in its report on the financial statements of NextPath
for the 1997 and 1998 fiscal years that they were prepared assuming that
NextPath will continue as a going concern and the report contained the firm's
opinion that the Company's recurring operating losses and lack of working
capital raised substantial doubt about its ability to continue as a going
concern.
During our 1997 and 1998 fiscal years, there had not been any
disagreements with Crouch, Bierwolf & Chisholm on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure. We provided Crouch, Bierwolf & Chisholm with a copy of the Current
Report on Form 8-K prior to its filing with the SEC and requested that Crouch,
Bierwolf & Chisholm furnish us with a letter addressed to the SEC stating
whether it agreed with the statements made in the Current Report on Form 8-K
and, if not, stating the respects in which it did not agree. The letter of
Crouch, Bierwolf & Chisholm is attached as an exhibit to the Current Report on
Form 8-K filed with the SEC February 14, 2000.
Weinberg & Company, P.A., Certified Public Accountants, whose address is
6100 Glades Road, Suite 314, Boca Raton, Florida 33434, the independent
accountant which was previously engaged as the principal accountant to audit the
13
financial statements of Epilogue Corporation, with whom we merged on November
12, 1999, was dismissed on February 8, 2000 so that NextPath, as the surviving
corporation in the merger, could engage the services of Gray & Northcutt Inc.
Weinberg & Company audited the balance sheet of Epilogue Corporation (a
development stage company) as of June 7, 1999 and the related statements of
operations, changes in shareholder's equity and cash flows for the period from
June 4, 1999 (inception) to June 7, 1999. The decision to change accountants was
recommended and approved by our Board of Directors.
There were not any disagreements with Weinberg & Company on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure. We provided Weinberg & Company with a copy of the
Current Report on Form 8-K prior to its filing with the SEC and requested that
Weinberg & Company furnish us with a letter addressed to the SEC stating whether
it agreed with the statements made in the Current Report on Form 8-K and, if
not, stating the respects in which it did not agree. The letter of Weinberg &
Company is attached as an exhibit to the Current Report on Form 8-K filed with
the SEC on February 14, 2000.
On February 8, 2000, Gray & Northcutt, located in Oklahoma City,
Oklahoma, was engaged by us to audit the consolidated balance sheets of NextPath
and its wholly-owned subsidiaries. Other than concerning its engagement, we
had not consulted with Gray & Northcutt Inc. prior to February 8, 2000. On
March 23, 2000, Gray & Northcutt, Inc. resigned from the audit engagement of
NextPath effective that date. Gray & Northcutt, Inc. agreed to complete its
audits of our subsidiaries, Laser Wireless, Inc., Willow Systems, Inc. and
Sagebrush Technology, Inc. In its resignation letter, Gray & Northcutt, Inc.
stated as follows: "In the course of performing our work, we have concluded that
NextPath lacks the internal controls necessary for the development of reliable
financial statements. Further, information has come to our attention that leads
us to conclude that we should not rely upon the representations of NextPath's
management in place during the period covered by this audit."
We provided Gray & Northcutt, Inc. with a copy of the Current Report on
Form 8-K prior to its filing with the SEC and requested that Gray & Northcutt,
Inc. furnish us with a letter addressed to the SEC stating whether it agreed
with the statements made in the Current Report on Form 8-K and, if not, stating
the respects in which it did not agree. The letter of Gray & Northcutt, Inc. is
attached as an exhibit to the Current Report on Form 8-K dated April 3, 2000.
Remedial Action
We did not disagree with the statements of Gray & Northcutt, Inc. In
response to these statements, the following remedial actions were taken: (i) we
employed Robert Woodward as Chief Financial Officer; (ii) we moved our former
Hillsborough, North Carolina headquarters to Tulsa, Oklahoma, thereafter to
Albuquerque and thereafter to our current headquarters in Phoenix, Arizona;
(iii) we retained the services of an accountant to organize our financial books
and records; (iv) we adopted the financial management plan proposed by Mr.
Woodward; (v) we adopted an Audit Committee Charter;; (vi) we accepted the
resignations of James Ladd, our former President, CEO and Chairman, and of
Douglas McClain, a former director; (vii) we engaged Crouch, Bierwolf &
Chisholm, our former auditors, to complete the audit of the Company begun by
Gray & Northcutt, Inc. so that the Form 10-K/A for the fiscal year ended
December 31, 1999, the 10-Q's for the periods ended March 31, June 30 and
September 30 2000, the 10-K for the fiscal year ending December 31, 2000, and
all required Form 8-K's could be filed in a timely fashion; (viii) we retained
the services of Gray & Northcutt, Inc. to prepare consolidated financial
statements of the Company and its subsidiaries; (ix) we retained the management
consulting services of International Profit Associates, (x) we expanded the
Board of Directors to nine seats and six new directors were elected to fill
vacancies on the Board of Directors; and (xi) we employed James D. Wilson as
President and Chief Executive Officer.
LEGAL PROCEEDINGS
NextPath and its former President, James R. Ladd, are two of the named
defendants in the case of Tim McMurray vs. James R. Ladd, Robert Wehle et al.,
District Court of Dallas County, Texas (No. 00-00170) filed January 10, 2000.
The action alleges tortious interference with existing and/or potential business
relations, civil conspiracy, and negligence and also seeks injunctive relief. We
believe that this action is wholly without merit and intend to vigorously defend
it.
14
On January 11, 2000, NextPath Technologies, Inc. received a copy of the
SEC's December 20, 1999 Order Directing Private Investigation In the Matter of
NextPath Technologies, Inc. (the "Order"). The Order is a confidential document
directing a non-public investigation. While the Order is not available to the
public, it appears to focus on the increase in the trading price of our common
stock during the last six months of 1999. During the course of its
investigation, the SEC has issued subpoenas to the Company and other persons and
has taken a number of depositions. We believe that we have fully cooperated with
the SEC in its investigation and we will continue to fully cooperate.
NextPath is a named defendant in the case of Blueigloo, Inc. and Smart
Mart, Inc. vs. NextPath Technologies, Inc., James Ladd et al., Case No.
99-6940-D in the District Court, 95th Judicial District, Dallas County, Texas.
The action alleges tortious interference with business. We believe this action
is wholly without merit and we intend to vigorously defend it.
NextPath is the plaintiff in the case of NextPath Technologies, Inc.
vs. Benjamin A. Dunn, Case No. CIV-00-0905-W in the United States District
Court, Western District of Oklahoma. This action is for breach of contract.
NextPath is the plaintiff in the case of NextPath Technologies, Inc. v.
Steven W. Martin, d/b/a W.O.W. Consulting Group, Case No. CJ-2000-7898 in the
District Court of Oklahoma County, State of Oklahoma, filed October 27, 2000.
This is an action for declaratory judgment brought by NextPath for the purpose
of determining the duties and obligations of NextPath with regard to a
Consulting Agreement NextPath entered into with the defendant, for breach of
contract, and for rescission and cancellation of promissory notes of NextPath
held by the defendant. NextPath alleges that without authorization of NextPath's
Board of Directors, the defendant has been wrongfully issued 9,300,000 shares of
the unregistered and restricted common stock of NextPath having a market value
at the date of issue of $84,293,750.00, as a retainer, for work alleged to have
been performed and to be performed on behalf of NextPath under the Consulting
Agreement. NextPath also alleges that if the defendant did any work on behalf of
NextPath, which NextPath denies, it was not worth the value of the stock issued
to the defendant. NextPath also alleges that any and all promissory notes of
NextPath held by the defendant are null and void and unenforceable and should be
rescinded and cancelled.
NextPath is the plaintiff in the case of NextPath Technologies, Inc. v.
James R. Ladd and Douglas A. McClain, Sr., Case No. CJ-2000-7917 in the District
Court of Oklahoma County, State of Oklahoma, filed October 30, 2000. This is an
action for breach of fiduciary duty and seeks actual and punitive damages.
NextPath alleges that from January, 1998 to March, 2000, while Mr. Ladd was
NextPath's Chairman of the Board and Chief Executive Officer, he engaged in a
regular course of conduct in direct derogation of his fiduciary duties owed to
NextPath. NextPath also alleges that from November, 1999 to March, 2000, while
Mr. McClain was a director of NextPath, he engaged in a regular course of
conduct in direct derogation of his fiduciary duties owed to NextPath.
SHAREHOLDER PROPOSALS
Proposals of shareholders to be presented at the 2001 Annual Meeting of
Shareholders must be received by the Secretary of the Company by April 15, 2001
to be considered for inclusion in the Company's Proxy Statement and form of
proxy relating to the meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
know of any business to come before the Annual Meeting other than the matters
described in the notice. If other business is properly presented for
consideration at the Annual Meeting, the enclosed Proxy authorizes the persons
named therein to vote the shares in their discretion.
Copies of the 1999 Annual Report of the Company on Form 10 K/A dated May
17, 2000 are being mailed to shareholders of record together with this Proxy
Statement, Proxy Card and Notice of Annual Meeting of Shareholders. Additional
copies may be obtained from Corporate Investor Communications, Inc., 111
Commerce Road, Carlstadt, NJ 07072-2586, Phone (201) 896-1900.
15
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K/A DATED MAY 17, 2000
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, AS FILED WITH THE SECURITIES AND
EXHANGE COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO SHAREHOLDERS
BENEFICIALLY OR OF RECORD AT THE CLOSE OF BUSINESS ON OCTOBER 23, 2000 ON
REQUEST TO CORPORATE INVESTOR COMMUNICATIONS, INC., 111 COMMERCE ROAD,
CARLSTADT, NJ, 07072-2586 (201) 896-1900. IT IS ALSO AVAILABLE ON THE SEC'S
EDGAR DATABASE AT WWW.SEC.GOV.
16
NEXTPATH TECHNOLOGIES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
DECEMBER 5, 2000 AT 10:00 A.M.
MARRIOTT HOTEL
3233 NW Expressway
Oklahoma City, Oklahoma
FOR HOLDERS OF VOTING COMMON SHARES
The undersigned hereby appoints Kenneth Sweet and Kenneth Uptain, or either of
them, attorneys and proxies, each with full power of substitution to vote, in
the absence of the other, all Common Shares of NEXTPATH TECHNOLOGIES, INC. held
by the undersigned and entitled to vote at the Annual Meeting of Shareholders to
be held on December 5, 2000 and at any adjournment or adjournments thereof, in
the transaction of such business as may properly come before the meeting, and
particularly the proposals stated below, all in accordance with and as more
fully described in the accompanying Proxy Statement.
It is understood that this proxy may be revoked at any time insofar as it has
not been exercised and that the shares may be voted in person if the undersigned
attends the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE FOLLOWING PROPOSALS:
1. Elect four directors, two of whom (Messrs. Lewis and Wilson) will
serve a one year term until the Annual Meeting of the Shareholders of
the Company to be held in the year 2001 and two of whom (Messrs.
Sweet and Uptain) will serve a two year term until the Annual Meeting
of the Shareholders of the Company to be held in the year 2002, and
in any case until their successors are duly elected and shall have
qualified.
Nominees:
--------
RICHARD LEWIS [_] FOR [_] WITHHOLD AUTHORITY
KENNETH SWEET [_] FOR [_] WITHHOLD AUTHORITY
KENNETH UPTAIN [_] FOR [_] WITHHOLD AUTHORITY
JAMES WILSON [_] FOR [_] WITHHOLD AUTHORITY
2. Ratification of the selection of Chisholm & Associates as independent
auditors for the Company for the year ending December 31, 2000.
[_] FOR [_] AGAINST [_] ABSTAIN
3. Approve the Incentive Stock Option Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
4. Approve the Directors' Incentive Stock Option Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
THE VOTING COMMON SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY
THE UNDERSIGNED SHAREHOLDER ON THE REVERSE OF THIS PROXY CARD, OR IF NO
DIRECTION IS GIVEN, THEY WILL BE VOTED FOR EACH OF THE ABOVE PROPOSALS. IN THEIR
DISCRETION, THE PROXYHOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE MEETING.
---------------------------------------------
Signature
---------------------------------------------
Signature if held jointly
Please vote, sign, date and
return this proxy card promptly,
using the enclosed envelope.
Dated: ____________________________, 2000
IMPORTANT:
Please sign this Proxy exactly as your name or names appear hereon. If shares
are held jointly, signatures should include both names. Executors,
administrators, trustees, guardians and others signing in a representative
capacity should please give their full titles.