UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14f-1
INFORMATION STATEMENT
Pursuant to Section 14(f) of the
Securities Exchange Act of 1934
and Rule 14f-1 under the Exchange Act
Date of Report April 30, 2007
TONGA CAPITAL CORPORATION
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(Exact name of registrant as specified in its chapter)
COLORADO 000-50619 84-1069035
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(State or other jurisdiction) (Commission File Number) (IRS Employer
Identification No)
2600 S. Shore Blvd, Suite 100, League City, TX 77573
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(Address of principal executive offices) (Postal Code)
Registrant's telephone number, including area code (281) 334-5161
INFORMATION STATEMENT PURSUANT TO SECTION 14 (F) OF THE SECURITIES EXCHANGE ACT
OF 1934 AND RULE 14(F)-1 THEREUNDER
We are furnishing this Information Statement to all of our shareholders of
record at the close of business on April 30, 2007 of our common stock, $0.01 par
value. This notice is required by Section 14(f) of the Securities Exchange Act
of 1934 (the "Exchange Act") and Rule 14f-1 of the Securities and Exchange
Commission ("SEC").
You are receiving this Information Statement in connection with the
appointment of persons designated by Jeffrey P. Ploen, Director, to seats on the
Board of Directors of the Company (the "Board") concurrent with a change of
control. Charles Phillips formerly controlled a total of 27,573,298 shares or
55% through his personal ownership and beneficially through control of Momentum
Employees and Consultant Trust and Momentum Directors Trust. Mr. Phillips has
sold privately or transferred from the Momentum Employees and Consultant Trust a
total of 13,400,000 shares to individuals, and has relinquished control of the
Momentum Employees and Consultant Trust and the Momentum Directors Trust which
control 6,350,000 shares collectively. His share position is now only 8,823,298
common shares or 17.45% of the outstanding shares. Mr. Phillips has also
resigned as an Officer and Director of the Company. The appointment is being
effected through an increase in the number of board members, appointed by Board
Action. Nevertheless, you are urged to read this Information Statement carefully
and in its entirety.
THIS INFORMATION STATEMENT IS PROVIDED TO YOU FOR INFORMATIONAL PURPOSES
ONLY. WE ARE NOT SOLICITING YOUR PROXY OR CONSENT IN CONNECTION WITH THE ITEMS
DESCRIBED HEREIN. NO VOTE OR OTHER ACTION BY OUR STOCKHOLDERS IS REQUIRED TO BE
TAKEN IN CONNECTION WITH THIS INFORMATION STATEMENT. THIS INFORMATION STATEMENT
IS NOT AN OFFER TO PURCHASE YOUR SHARES.
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VOTING SECURITIES
As of the date of this Information Statement, our authorized capital stock
consisted of 500,000,000 shares of Common Stock, $0.01 par value, of which,
50,552,256 shares are issued and outstanding as of April 30, 2007. Each share of
Common Stock entitles the holder of the share to one vote.
MANAGEMENT
Executive Officers and Directors
Set forth below are the names, ages, position(s) with Company and business
experience of our directors and executive officers.
NAME AGE POSITION
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Barent W. Cater 53 President & CEO
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Stuart C. Cater 50 CFO/Secretary/Treasurer
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Jim O'Neal 60 Chief Operations Officer
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Jeffrey P. Ploen 56 Director
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Nominees for new director positions
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Richard A. Robert 41 Director (Nominee)
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Barent W. Cater 53 Director and Chairman (Nominee)
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Richard C. Cilento 45 Director (Nominee)
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Jackson L. Wilson 59 Director (Nominee)
Directors hold office until the next annual meeting of our stockholders and
until their successors have been elected and qualify. Officers are elected by
the board of directors and their terms of office are, except to the extent
governed by an employment contract, at the discretion of the board of directors.
Set forth below under "Business Experience" is a description of the business
experience of our new executive officers and directors.
Business Experience
BARENT W. CATER - President and Chief Executive Officer, (Director and Chairman
Nominee), Age 53
Mr. Cater will serve as Chairman of the Board of Directors. Mr. Cater is a
retired Managing Partner with Accenture, which is now Accenture Ltd. (NYSE:
ACN), where he spent 24 years providing operational and technology consulting
services to some of the world's largest companies. During his career with
Accenture, he held numerous positions including most recently Founding General
Partner of Accenture Technology Ventures, were he was responsible for
Accenture's Supply Chain, B2B and Oil and Gas related venture investments. In
this capacity he evaluated investment opportunities, managed Accenture's
investments, participated on portfolio company boards, assisted in fund raising
activities and provided assistance to portfolio company management teams. Mr.
Cater was also Global Managing Partner Business Development, Managing Partner
Outsourcing Sales North America, Managing Partner Capital Markets. Mr. Cater
also served as CEO of an Accenture affiliated company "Epvalue" which provided
outsourced procurement services for US and European companies. He was also
Accenture's lead in the formation of Avanade, a joint venture company created
with Microsoft focused on providing technology solutions for businesses. Mr.
Cater holds a BS in Economics and an MBA in Finance from Texas A&M University.
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JEFFREY P. PLOEN - Director, Age 56
Mr. Ploen has served as a director of the Company since October 2006. He has
been a member of the investment banking industry for over 25 years specializing
in small or micro cap firms. He is a founding partner and is currently the CEO
and Chairman of the Board of Iofina Natural Gas plc. He served as the former
Chairman, President and CEO of Tonga Capital Corp. He was the former Chairman
and CEO of Paradigm Holdings, Inc. He is the former hedge fund manager of the
Olive Fund LLC. Jeff held positions with several small cap brokerage houses from
1972 through 1994 including Engler and Budd, Cohig and Associates, Neidiger,
Tucker and Brunner and Institutional Securities, Inc. For the past ten years
Jeff has been President of J. Paul Consulting Corp., a firm specializing in
financing for small and micro cap firms.
RICHARD C. CILENTO - (Director Nominee), Age 45
Mr. Cilento will serve as a director of the Company. Rich is the President,
Chief Executive Officer and Founder of FuelQuest, Inc. FuelQuest provides
on-demand supply chain management and tax automation software and services for
suppliers, distributors, fuel buyers, and traders in Global Downstream Energy.
Rich brought a broad scope of experience in technology, operations and business
development to his role as President and Chief Executive Officer of FuelQuest.
Rich is a co-founder of The Bollard Group, which provides investment-banking
services to petroleum distribution companies and other high-growth business
ventures. Prior to co-founding The Bollard Group, he held senior-management
positions with several technology firms, including Xerox Corp, where he served
as Vice President of Strategic Services. Prior to that, Rich was Vice President
of Corporate Services for XLConnect Solutions, where he served as the company's
lead technologist for advanced systems and managed the organization through its
Initial Public Offering and its eventual merger with Xerox, forming Xerox
Connect Solutions. Rich began his career at NASA, where he and his team were
responsible for redesigning NASA's Mission Control Center and implementing
NASA's Software Management Plan. He holds a BS degree in Aeronautical and
Astronomical Engineering from the University of Illinois, an MBA at the
University of Houston and serves on the advisory boards for several
internet-based companies.
RICHARD A. ROBERT - (Director Nominee), Age 41
Mr. Robert will serve as a director of the Company. He is a financial executive
with expertise in acquisitions, divestitures, economic analysis, capital
formation via debt and equity markets, and financial risk management. Through
the course of his career he has dealt extensively with wall street analysts,
investment bankers, and commercial bankers. He is currently the Executive
Vice-President and Chief Financial Officer of Nami Holding Company, LLC which is
a privately owned natural gas and oil production company focused on the
development and exploitation of mature long-lived natural gas and oil reserves
in the Appalachian basin. In addition, he is the current co-owner and co-founder
of Cova Hand-Selected Wines, Custom Living Properties, LP and Lifewear Products,
LP. He served as the Interim Chief Financial Officer of Massey Energy Company
("Massey") which is the fourth largest coal company in the United States. Mr.
Robert led the successful negotiations of $487 million in new financing for
Massey. Mr. Robert was the Vice President of Finance of Enbridge US, Inc.
("Enbridge") after Enbridge's acquisition of Midcoast Energy Resources, Inc
(`Midcoast"). Enbridge is a multibillion-dollar energy company based in Calgary,
Alberta. Mr. Robert served as the Chief Financial Officer and Treasurer of
Midcoast. Midcoast was a growth-oriented energy company engaged in the
transportation, gathering, processing, and marketing of natural gas and other
petroleum products. He was hired as the first employee of the company and helped
the company grow from infancy to approximately $1 billion in sales and 330
employees in Canada and the United States. He participated in the merger between
Midcoast and Enbridge that resulted in shareholder value equaling a 400% premium
to the company's initial public offering five years earlier. Midcoast raised
$128 million in four common equity offerings. Mr. Robert began his career with
Arthur Andersen, LLP as an energy auditor. He holds a BBA from Southwest Texas
State University with a Concentration in Accounting and graduated with a 4.0
GPA.
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JACKSON L. WILSON, JR. - (Director Nominee), Age 59
Mr. Wilson will serve as a director of the Company. From 1975 through August
2004, when he retired, Mr. Wilson served in various roles at Accenture Ltd.
including Managing Partner - Accenture Technology Ventures, Corporate
Development Officer and, most recently, Chief Executive Officer - Business
Process Outsourcing. Mr. Wilson has served as a director and Audit Committee
Chairman of i2 Technologies Inc. since April 2005, as a director of Seraph Group
since June 2005 and as a director of Garrison Enterprises since May 2007. Mr.
Wilson formerly served on several public company boards, including Accenture
LTD, Security First and SeeBeyond Technologies and numerous private company
boards.
STUART C. CATER, CPA - Chief Financial Officer, Age 50
Mr. Cater began his professional career in public accounting with both Ernst and
Young and Arthur Andersen. During this part of his career he provided Taxation
and Business Consulting services to his clients. Mr. Cater then moved into
private industry and has held management positions with both start-up and
publicly traded companies in the finance and information technology areas. Mr.
Cater holds a B.S. in Economics from S.U.N.Y. at Oneonta and an MBA in
Accounting from Texas A&M University. He is a member of the AICPA, Texas Society
of CPA's and the Houston Chapter of CPA's.
JIM O'NEAL - Chief Operations Officer, Age 60
Mr. O'Neal is a senior level executive with experience across a broad landscape
including logistics, transportation, energy, consulting, manufacturing and
aerospace. He has held positions with Dynegy, Chevron, Gulf Oil, and NASA. His
operational experience includes Director of Inland/Marine operations with Dynegy
where he managed transportation, terminals, marine operations, pipelines and
distribution of all gas liquids for the $2 billion energy company. He also was
Area/Division Manager for Warren Petroleum where his responsibilities included
managing terminal, marine and rail fleets for the distribution of product. Mr.
O'Neal holds a B.S. in Mechanical Engineering and an MBA in Finance from the
University of Arkansas and is a registered member of the Society of Naval
Architects and Marine Engineers.
Employment agreements have been executed between the Company and Barent W.
Cater, Jim O'Neal and Stuart C. Cater.
Mr. Barent W. Cater and Mr. Stuart C. Cater are brothers.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that our directors,
executive officers and persons who own more than 10% of our outstanding common
stock file initial reports of ownership and reports of changes in ownership in
the common stock with the SEC. Officers, directors and shareholders who own more
than 10% of the outstanding common stock of the Company are required by the SEC
to furnish us with copies of all Section 16(a) reports they file.
Corporate Governance
We are not a "listed company" under SEC rules and are, therefore, not
required to have an audit committee comprised of independent directors. Our
entire Board serves as our audit committee. No member of our Board is considered
"independent" pursuant to Section 10A(m)(3) of the Securities Act of 1934, as
amended. The Board has determined that its members are able to read and
understand fundamental financial statements and have substantial business
experience that results in their financial sophistication. Accordingly, the
Board believes that its members have the sufficient knowledge and experience
necessary to fulfill the duties and obligations of members of the audit
committee.
Additionally, our Board does not have a standing nominating committee.
Because we do not have such a committee, our full Board performs the functions
of this committee. In considering director nominees, at a minimum, our Board
will consider: (i) whether the director nominee provides the appropriate
experience and expertise in light of the other members currently serving on the
board and any other factors relating to the ability and willingness of a nominee
to serve on the board, (ii) the number of other boards and committees on which
the nominee serves, and (iii) the director nominee's business or other
relationships, if any, with us, including whether the director nominee would be
subject to a disqualifying factor in determining the nominee's "independence" as
defined by the listing standards of the relevant securities exchanges. As of the
date of this Information Statement, our Board has not adopted procedures for the
recommendation of nominees for the board of directors. Our Board will accept
nominations from our shareholders.
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Shareholder Communication with the Board
Shareholders may send communications to our Board by writing to: Tonga
Capital Corporation, 2600 South Shore Blvd., Suite 100, League City, TX 77573,
attention Board or any specified director. Any correspondence received at the
foregoing address to the attention of one or more directors is promptly
forwarded to such director or directors.
EXECUTIVE COMPENSATION
Executive Officer Compensation
The following table sets forth the compensation payable to our Chief
Executive Officer and other executive officers of the Company for services in
all capacities to the Company for the years ended December 31, 2006, 2005 and
2004, respectively.
SUMMARY COMPENSATION TABLE(1)
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ANNUAL COMPENSATION LONG TERM COMPENSATION
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AWARDS PAYOUTS
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OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
NAME & PRINCIPAL SALARY BONUS COMPENSA- STOCK OPTIONS/ PAYOUTS COMPENSA-
POSITION YEAR ($) ($) TION AWARDS ($) SARS (#) ($) TION
Charles T. Phillips, 2006 $60,000 $ -0- $ 80,000 $ -0- -0- $ -0- $ -0-
Ex-President & CEO (2,4,5) 2005 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
2004 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
Robert Degetyr, 2006 $ -0- $ -0- $ 4,900 $ -0- -0- $ -0- $ -0-
Chief Financial Officer (3) 2005 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
2004 $ -0- $ -0- $ -0- -0- -0- $ -0- $ -0-
(1) The value of prerequisites and other personal benefits, securities and
property for the Named Executive Officers that do not exceed the lesser of
$50,000 or 10% of the total of the annual salary and bonus is not reported
herein.
(2) Mr. Phillips served as the President and Chief Executive Officer from June
2006 through March 2007. This does not include the 24,475,000 shares of the
Company's restricted common stock that he received in the reverse
acquisition of Tonga and Momentum.
(3) Mr. Degeyter served as the Chief Financial Officer from June 2006 through
February 2007.
(4) Does not include 3,098,289 shares as of December 31, 2006 that are held by
the Momentum Employees and Consultants Trust and the Momentum Director's
Trust, of which Mr. Phillips served as a trustee.
(5) Consulting fees paid to Mr. Phillips.
Messrs. Barent W. Cater, Stuart C. Cater and Jim O'Neal, the current officers of
the Company, executed employment agreements with the Company in April of 2007,
which provide for each individual to receive an annual salary of $100,000.
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The Company has adopted a stock option plan. The options granted by the Company
under the stock option plan are as follows:
# of Underlying
Name Options/SARs Granted Term of Option
---- -------------------- --------------
Barent W. Cater, President & CEO 5,000,000 3 years
Stuart C. Cater, Chief Financial Officer 2,000,000 3 years
Jim O'Neal, Chief Operations Officer 2,000,000 3 years
Compensation of Directors
Our directors do not receive any compensation pursuant to any standard
arrangement for their services as directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of outstanding shares of the Company's common stock as of April 16,
2007 on a fully diluted basis, by (a) each person known by the Company to own
beneficially 5% or more of the outstanding shares of common stock, (b) the
Company's Directors, Chief Executive Officer and Executive Officers whose total
compensation exceeded $100,000 for the last fiscal year, and (c) all Directors
and Executive Officers of the Company as a group.
Name of Shares Total
Beneficial Owner Owned Ownership
---------------- ----- ---------
Charles T. Phillips (1) 8,823,298 17.45%
Donald W. Guggenheim 5,000,000 9.89%
Coastal Safety & Environmental Systems, LLC 8,100,000 16.02%
Richard C. Cilento 2,500,000 4.95%
Barent W. Cater (2) 2,250,000 4.45%
Momentum Employee and Consultant Trust (3) 5,750,000 11.37%
Momentum Director Trust (4) 600,000 1.19%
Shortline Equity Partners, Inc.(5) 2,860,000 5.66%
Ultimate Investments Corp. (5) 765,400 1.51%
Elevation Fund, LLC (5) 10,000 0.02%
J. Paul Consulting Corp (6) 3,000,000 5.93%
Elizabeth Evans 2,531,202 5.01%
Stuart C. Cater (7) 375,000 0.74%
Jim O'Neal (8) 375,000 0.74%
Richard A. Robert 100,000 0.20%
Officers & Directors as a group 8,600,000 17.01%
(1) Shares reduced by 1,500,000 shares as a result of Purchase Options held by
Barent W. Cater and Jeffrey Ploen
(2) Includes an Option to Purchase 750,000 shares from Charles T. Phillips and
1,000,000 shares from the Company. Mr. Cater also has the option to
purchase an additional 4,000,000 shares from the Company over the next
three years
(3) Richard C. Cilento is trustee of this Trust, but has no ownership therein
and specifically disclaims any ownership therein
(4) Mr. Cater is trustee of this Trust, but has no ownership therein, and
specifically disclaims any ownership therein
(5) Lance Baller beneficially owns Shortline Equity Partners, Inc. and Ultimate
Investments Corp. which combined, hold 3,625,400 shares, or 7.17% of the
outstanding shares and is Fund Manager for the Elevation Fund, LLC
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(6) Jeffrey Ploen, Director, beneficially owns J. Paul Consulting Corp and
together with his personal holdings, owns 3,000,000 shares or 5.93% of the
total outstanding shares. This amount includes a Purchase Option from
Charles T. Phillips for 750,000 shares
(7) Includes an Option to purchase 375,000 shares from the Company, immediately
and an Option to purchase an additional 1,625,000 shares over the next
three years
(8) Includes an Option to purchase 375,000 shares from the Company, immediately
and an Option to purchase an additional 1,625,000 shares over the next
three years
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TONGA CAPITAL CORPORATION
(Registrant)
By: /s/ Barent W. Cater
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Barent W. Cater
President & CEO
Date: April 30, 2007
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