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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
THINKPATH.COM INC.
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(Name of Registrant as specified in its charter)
(Name of Person(s) Filing Proxy Statement), if other than Registrant
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
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: ______ (A)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any 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:
THINKPATH.COM INC.
55 University Avenue, Suite 505
Toronto, Ontario M5J 2H7
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NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 6, 2001
TO THE SHAREHOLDERS OF THINKPATH.COM INC.:
NOTICE IS HEREBY GIVEN, that the Annual Meeting (the "Meeting") of
shareholders of Thinkpath.com Inc. (the "Company") will be held at 10:00 A.M. on
June 6, 2001 at the Company's executive offices located at 55 University Avenue,
Suite 505, Toronto, Ontario M5J 2H7, for the following purposes:
1. To elect the Board of Directors of the Company for the ensuing year;
2. To ratify the appointment of Schwartz, Levitsky, Feldman, llp, as the
Company's independent chartered accountants for the ensuing year;
3. To ratify the adoption of the Company's 2001 Stock Option Plan, a copy
being attached hereto as Exhibit A;
4. To vote upon the proposal to change the corporate name of the Company
from Thinkpath.com Inc. to Thinkpath Inc., the text of such resolution
being attached hereto as Exhibit B;
5. To vote upon the proposal to amend the Company's Articles of
Organization to increase the authorized number of the shares of the
Company's common stock from 15,000,000 to 30,000,000 shares, the text
of such resolution being attached hereto as Exhibit B;
6. To vote upon the ratification of the issuance of more than 2,712,979
shares of the Company's common stock, if necessary, upon: (i) the
conversion of the Company's Series C 7% Convertible Preferred Stock;
and (ii) the exercise of warrants, which represents an issuance of more
than 20% of the issued and outstanding shares of the Company's common
stock as of April 24, 2001, the closing date of the Company's April
2001 private placement offering, and therefore requires shareholder
approval under Rule 4460 of the National Association of Securities
Dealers, Inc.;
7. To vote upon the ratification of the issuance of more than 2,760,979
shares of the Company's common stock, if necessary, upon the issuance
of shares of the Company's common stock and/or warrants pursuant to a
contemplated equity line of credit, which shares and/or warrants will
be issued at a discount of up to 20% to the then prevailing market
price of the Company's common stock, which represents an issuance of
more than 20% of the issued and outstanding shares of the Company's
common stock as of May 11, 2001, and therefore requires shareholder
approval under Rule 4460 of the National Association of Securities
Dealers, Inc.; and
8. To transact such other business as may properly come before the Meeting
and any continuations and adjournments thereof.
Shareholders of record at the close of business on May 11, 2001 are
entitled to notice of and to vote at the Meeting.
In order to ensure a quorum, it is important that the shareholders
representing a majority of the total number of shares issued and outstanding and
entitled to vote be present in person or represented by their proxies.
Therefore, whether you expect to attend the Meeting in person or not, please
sign, fill out, date and return the enclosed proxy in the self-addressed,
postage-paid envelope also enclosed. If a shareholder attends the Meeting and
prefers to vote in person, such shareholder can revoke such shareholder's proxy.
In addition, please note that abstentions are included in the
determination of the number of shares present and voting, for purposes of
determining the presence or absence of a quorum for the transaction of business.
Abstentions are not counted as voted either for or against a proposal.
By Order of the Board of Directors, May 21, 2001
/s/ Declan A. French
Chairman of the Board of Directors
THINKPATH.COM INC.
55 University Avenue, Suite 505
Toronto, Ontario M5J 2H7
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 6, 2001
This Proxy Statement is being furnished in connection with the
solicitation by the Board of Directors of Thinkpath.com Inc. (the "Company"),
for use at the Annual Meeting (the "Meeting") of shareholders of the Company to
be held on June 6, 2001 at 10:00 A.M. at the Company's executive offices located
at 55 University Avenue, Suite 505, Toronto, Ontario M5J 2H7 and at any
continuation and adjournment thereof. Anyone giving a proxy may revoke it at any
time before it is exercised by giving the Chairman of the Board of Directors of
the Company written notice of the revocation, by submitting a proxy bearing a
later date, or by attending the Meeting and voting. This statement, the
accompanying Notice of Meeting and form of Proxy have been first sent to the
shareholders on or about May 23, 2001.
In addition, please note that abstentions are included in the
determination of the number of shares present and voting, for purposes of
determining the presence or absence of a quorum for the transaction of business.
Abstentions are not counted as voted either for or against a proposal.
All properly executed, unrevoked proxies on the enclosed form, which
are received in time will be voted in accordance with the shareholder's
directions, and unless contrary directions are given, will be voted for the
proposals described below.
Please note that all references to dollar amounts in this Proxy, unless
otherwise indicated, are to United States dollars.
OWNERSHIP OF SECURITIES
Only shareholders of record at the close of business on May 11, 2001,
the date fixed by the Board of Directors in accordance with the Company's
By-Laws (the "Record Date"), are entitled to vote at the Meeting. As of the
Record Date there were 13,804,895 issued and outstanding shares of the
Company's common stock.
Each outstanding share of common stock is entitled to 1 vote on all
matters properly coming before the Meeting. A majority of the shares of the
outstanding common stock is necessary to constitute a quorum for the Meeting.
1
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of the Record Date, the names and
beneficial ownership of the Company's common stock beneficially owned, directly
or indirectly, by: (i) each person who is a director or executive officer of the
Company; (ii) all directors and executive officers of the Company as a group;
and (iii) all holders of 5% or more of the outstanding shares of the common
stock of the Company:
Names and Address of Beneficial Amount and Nature of Percentage of Shares
Owner (1) Beneficial Ownership (2) Outstanding
- ------------------------------- --------------------------- --------------------
Declan A. French 2,322,459(3) 16.7%
Laurie Bradley 0 0
Tony French 70,133(4) *
Kelly Hankinson 55,167(5) *
John R. Wilson 132,247(6) *
John Dunne 41,424(7) *
Arthur S. Marcus 30,500(8) *
Ronan McGrath 25,000(9) *
Joel Schoenfeld 25,000(10) *
Roger W. Walters 1,395,398(11) 10%
KSH Strategic Investment
Fund, L.P. 1,844,673(12) 12.8%
All directors and officers
as a group (9 persons)
(3) - (10) 2,701,930 19.3%
* Less than 1%.
(1) Except as set forth above, the address of each individual is 55 University
Avenue, Suite 505, Toronto, Ontario M5J 2H7.
(2) Based upon information furnished to the Company by the directors and
executive officers or obtained from the Company's stock transfer books. The
Company is informed that these persons hold the sole voting and dispositive
power with respect to the common stock except as noted herein. For purposes
of computing "beneficial ownership" and the percentage of outstanding common
stock held by each person or group of persons named above as of the Record
Date, any security which such person or group of persons has the right to
acquire within 60 days after such date is deemed to be outstanding for the
purpose of computing beneficial ownership and the percentage ownership of
such person or persons, but is not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person.
2
(3) Includes 510,563 shares of common stock owned by Christine French, the wife
of Declan A. French and 101,333 shares of common stock issuable upon the
exercise of options issued to Declan A. French that are currently
exercisable or exercisable within the next 60 days. Also includes 1,200,000
shares of common stock issued to Declan A. French as a bonus pursuant to
his employment agreement.
(4) Includes 1,133 shares of common stock issuable upon the exercise of options
that are currently exercisable or exercisable within the next 60 days.
(5) Includes 1,133 shares of common stock issuable upon the exercise of options
that are currently exercisable or exercisable within the next 60 days.
(6) Includes 1,333 shares of common stock issuable upon the exercise of options
that are currently exercisable or exercisable within the next 60 days.
(7) Consists of 13,091 shares of common stock owned by John Dunne's spouse and
includes 28,333 shares of common stock issuable upon the exercise of
options issued to John Dunne that are currently exercisable or exercisable
within the next 60 days.
(8) Includes 27,500 shares of common stock issuable upon the exercise of
options that are currently exercisable or exercisable within the next 60
days. Excludes 30,362 shares of common stock issued in the name of Gersten,
Savage & Kaplowitz, LLP, the Company's United States legal counsel, of
which Mr. Marcus is a partner.
(9) Consists of 25,000 shares of common stock issuable upon the exercise of
options that are currently exercisable or exercisable within the next 60
days.
(10) Consists of 25,000 shares of common stock issuable upon the exercise of
options that are currently exercisable or exercisable within the next 60
days.
(11) Includes 100,000 shares of common stock issuable upon the exercise of
options that are currently exercisable or exercisable within the next 60
days.
(12) Includes 315,000 shares of common stock issuable upon options that are
currently exercisable or exercisable within the next 60 days and 250,000
shares of common stock issuable upon the exercise of warrants that are
currently exercisable or exercisable within the next 60 days.
3
DESCRIPTION OF SECURITIES
The Company's total authorized capital stock consists of 15,000,000
shares of common stock, no par value per share, and 1,000,000 shares of
preferred stock, no par value per share. The following descriptions contain all
material terms and features of the Company's securities and are qualified in all
respects by reference to the Company's Articles of Organization and Bylaws.
Common Stock
The Company is authorized to issue up to 15,000,000 shares of common
stock, no par value per share, of which as of the Record Date, 13,804,895 shares
of common stock were outstanding, not including the shares of common stock to be
isssued upon the conversion of the outstanding shares of Series C 7% Convertible
Preferred Stock and the exercise of all outstanding warrants and options. All
outstanding shares of common stock are, and all shares of common stock to be
outstanding upon the conversion of the outstanding shares of Series C 7%
Convertible Preferred Stock and the exercise of outstanding warrants and options
will be, validly authorized and issued, fully paid, and non-assessable, subject
to the shareholders' approval of the amendment to the Articles of Organization
increasing the authorized shares of common stock.
The holders of common stock are entitled to 1 vote for each share
held of record on all matters submitted to a vote of shareholders. Holders of
common stock are entitled to receive ratably dividends as may be declared by the
Company's Board of Directors out of funds legally available therefor. In the
event of a liquidation, dissolution or winding up of the Company, holders of the
common stock are entitled to share ratably in all assets remaining, if any,
after payment of liabilities. Holders of common stock have no preemptive rights
and have no rights to convert their shares of common stock into any other
securities.
Pursuant to the Business Corporation Act, Ontario, a shareholder of an
Ontario Corporation has the right to have the corporation pay the shareholder
the fair market value for such shareholder's shares of the corporation in the
event such shareholder dissents to certain actions taken by the corporation,
such as amalgamation or the sale of all or substantially all of the assets of
the corporation and such shareholder follows the procedures set forth in the
Business Corporation Act, Ontario.
Preferred Stock
The Company's Articles of Organization authorize the issuance of up to
1,000,000 shares of preferred stock with designations, rights and preferences
determined from time to time by its Board of Directors. Accordingly, the
Company's Board of Directors is empowered, without shareholder approval, to
issue preferred shares with dividend, liquidation, conversion, or other rights
that could adversely affect the rights of the holders of the common stock.
Series A 8% Convertible Preferred Stock
There were 17,500 shares of Series A 8% Convertible Preferred Stock
authorized and issued, none of which remain outstanding.
Series B 8% Convertible Preferred Stock
There were 1,500 shares of Series B 8% Convertible Preferred Stock
authorized and issued, none of which remain outstanding.
4
Series C 7% Convertible Preferred Stock
There are 1,105 shares of Series C 7% Convertible Preferred Stock
outstanding, which shares were issued pursuant to a share purchase agreement
dated April 18, 2001 (the "Series C Agreement"). Each share of Series C 7%
Convertible Preferred Stock has a stated value of $1,000 per share. The shares
of Series C 7% Convertible Preferred Stock are convertible into shares of the
Company's common stock at the option of the holders the Series C 7% Convertible
Preferred Stock, at any time after issuance until such shares of Series C 7%
Convertible Preferred Stock are mandatorily converted or redeemed by the
Company, under certain conditions.
Pursuant to the Series C Agreement, the Company is required to register
200% of the shares of common stock issuable upon the conversion of the 1,105
shares of Series C 7% Preferred Stock. In addition, upon the effective date of
such registration statement, the Company has the option to issue to the holders
of the 1,105 shares of Series C 7% Preferred Stock an aggregate of 500 shares of
Series C 7% Preferred Stock in consideration for an additional $500,000, under
certain conditions.
The holders of the shares of Series C 7% Convertible Preferred Stock
are entitled to receive preferential dividends in cash, on a quarterly basis
commencing on June 30, 2001, out of any of the Company's funds legally available
at the time of declaration of dividends before any other dividend distribution
will be paid or declared and set apart for payment on any shares of the
Company's common stock, or other class of stock presently authorized, at the
rate of 7% simple interest per annum on the stated value per share plus any
accrued but unpaid dividends, when as and if declared. The Company has the
option to pay such dividends in shares of the Company's common stock to be paid
(based on an assumed value of $1,000 per share of Series C 7% Convertible
Preferred Stock) in full shares only, with a cash payment equal to any
fractional shares.
The number of shares of the Company's common stock into which the
Series C 7% Convertible Preferred Stock shall be convertible into equals that
number of shares of common stock as is calculated by (i) the sum of (A) the
stated value per share and (B) at the holder's election, accrued and unpaid
dividends on such shares, divided by (ii) the "Conversion Price". The
"Conversion Price" shall be the lesser of (x) 87.5% of the average of the 5
lowest daily volume weighted average prices (as reported by Bloomberg Financial
L.P. at 4:02 ET on the NASDAQ SmallCap Market or the then applicable market) of
the Company's common stock during the period of 60 consecutive trading days
immediately prior the date of the conversion notice; or (y) 90% of the average
of the daily volume weighted average prices (as reported by Bloomberg Financial
L.P. at 4:02 ET on the NASDAQ SmallCap Market or the then applicable market)
during the period of the 5 trading days prior to the applicable closing date
($.4798 with respect to the 1,105 shares of Series C 7% Preferred Stock issued
and outstanding). The Conversion Price is subject to certain floor and time
limitations.
At any time prior to October 24, 2001, the Company may, in its sole
discretion, redeem in whole or in part, the then issued and outstanding shares
of Series C 7% Convertible Preferred Stock at a price equal to $1,150 per share,
plus all accrued and unpaid dividends, and after October 24, 2001, at a price
equal to $1,200 per share, plus all accrued and unpaid dividends.
5
Common Stock Purchase Warrants
There are outstanding warrants to purchase an aggregate of 3,258,473
shares of the Company's common stock. 631,750 of the warrants issued are
exercisable at any time and in any amount until December 30, 2004 at a purchase
price of $3.24 per share, 250,000 of the warrants issued are exercisable at any
time and in any amount until April 16, 2005 at a purchase price of $3.71 per
share, 500,000 of the warrants issued are exercisable at any time and in any
amount until March 6, 2001 at a purchase price of $3.25 per share, 272,001 of
the warrants issued are exercisable at any time and in any amount until August
22, 2005 at a purchase price of $3.516 per share, 89,864 of the warrants issued
are exercisable at any time and in any amount until August 22, 2005 at a
purchase price of $3.165 per share, 80,004 of the warrants issued are
exercisable at any time and in any amount until August 22, 2005 at a purchase
price of $2.742, 98,163 of the warrants issued are exercisable at any time and
in any amount until August 22, 2005 at a purchase price of $2.463 per share,
423,207 of the warrants issued are exercisable at any time and in any amount
until August 22, 2005 at a purchase price of $1.00 per share, 250,000 of the
warrants issued are exercisable at any time and in any amount until January 20,
2006 at $1.50 per share, and 663,484 of the warrants issued are exercisable at
any time and in any amount until April 18, 2006 at a purchase price of $.5445
per share. The Company may call any unexercised portion of 963,239 of the
2,293,777 warrants and require their exercise as follows if the Company's common
stock, as reported on the Nasdaq SmallCap Market, closes above the bid price
indicated for any 10 consecutive business days: (i) 1/3 of such unexercised
warrants at $6.00 per share, (ii) 1/3 of such unexercised warrants at $7.50 per
share; and (iii) 1/3 of such unexercised warrants at $9.00 per share.
Warrantholders are not entitled, by virtue of being warrantholders, to
receive dividends or to vote at or receive notice of any meeting of shareholders
or to exercise any other rights whatsoever as the Company's shareholders. In
order to receive 1 share of the Company's common stock a warrantholder must
surrender 1 warrant, accompanied by payment of the aggregate exercise price of
the warrants to be exercised, which payment may be made, at the warrantholder's
election, in cash or by delivery of a cashiers or certified check or any
combination of the foregoing. Upon receipt of duly executed warrants and payment
of the exercise price, the Company shall issue and cause to be delivered to
warrantholders, certificates representing the number of shares of common stock
so purchased.
THIS PROXY STATEMENT CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WHICH INVOLVE
RISKS AND UNCERTAINTITIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE ANTICIPATED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN
FACTORS, INCLUDING THOSE SET FORTH BELOW AND ELSEWHERE IN THIS PROXY STATEMENT.
6
PROPOSAL 1
TO ELECT THE BOARD OF DIRECTORS OF THE COMPANY FOR THE ENSUING YEAR.
7 directors are to be elected at the Meeting to hold office until the
next annual meeting of shareholders or until their successors have been duly
elected and qualified. The election of directors requires the affirmative vote
of at least the majority of shares of common stock present or represented at an
annual meeting at which a quorum is present or represented.
The By-Laws of the Company provide that the authorized number of
directors shall be as set by the Board of Directors but shall not be less than
1. Strasbourger Pearson Tulcin Wolff Incorporated, the managing underwriter for
the Company's June 8, 1999 initial public offering, shall have the right, at its
option, to designate 1 director or observer to the Company's Board of Directors
until June 1, 2002, which director shall be reasonably acceptable to the
Company's Board of Directors. In addition, with respect to the Company's August
2000 private placement offering, the Company is required to nominate a director
designee of KSH Investment Group, Inc, the placement agent, who is reasonably
acceptable to the Company's Board of Directors. The Company has paid directors
fees for service on the Board of Directors by the issuance of options under the
1998 Stock Option Plan and the 2000 Stock Option Plan.
Shareholder Vote Required
The election of the directors will require the affirmative vote of the
majority of the shares present in person or represented by proxy at the Meeting
and entitled to vote on the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION TO THE BOARD OF DIRECTORS
OF THE COMPANY EACH OF THE FOLLOWING DIRECTOR NOMINEES:
Position Held
Name Age Position with the Company Since
Declan A. French 55 Chairman of the Board of 1994
Directors and Chief Executive
Officer
Kelly Hankinson 31 Chief Financial Officer, 1999
Secretary, Treasurer and
Director
John Dunne 56 Director 1998
Arthur S. Marcus 35 Director 2000
Ronan McGrath 52 Director 2000
Joel Schoenfeld 50 Director 2001
Robert Escobio 46 Director Nominee N/A
7
Set forth below is a biographical description of each of the Company's
director nominees based on information supplied by each of them:
Declan A. French has served as the Company's Chairman of the Board of
Directors and Chief Executive Officer since the Company's inception in February
1994. Prior to founding the Company, Mr. French was President and Chief
Executive Officer of TEC Partners Ltd., an information technology recruiting
firm in Toronto, Canada. Mr. French has a diploma in Psychology and Philosophy
from the University of St. Thomas in Rome, Italy.
Kelly Hankinson has served as the Company's Chief Financial Officer
since May 1999, on the Company's Board of Directors since June 2000 and as the
Company's Secretary and Treasurer since March 2001. Ms. Hankinson served as the
Company's Vice President, Finance and Administration and Group Controller from
February 1994 to May 1999. Ms. Hankinson has a Masters Degree and a Bachelors
Degree from York University.
John Dunne has served on the Company's Board of Directors since June
1998. Mr. Dunne has been Chairman and Chief Executive Officer of the Great
Atlantic & Pacific Company of Canada, Ltd. since August 1997, where he also
served as President and Chief Operating Officer from September 1996 until August
1997. From November 1995 until September 1996, Mr. Dunne was Chairman and Chief
Executive Officer of Food Basics Ltd. Prior to that, he had served as Vice
Chairman and Chief Merchandising Officer of Great Atlantic & Pacific Company of
Canada, Ltd.
Arthur S. Marcus has served on the Company's Board of Directors since
April 2000. Mr. Marcus is a partner at the New York law firm of Gersten, Savage
& Kaplowitz, LLP, the Company's United States securities counsel. Mr. Marcus
joined Gersten, Savage & Kaplowitz, LLP in 1991 and became a partner in 1996.
Mr. Marcus specializes in the practice of United States Securities Law and has
been involved in approximately 50 initial public offerings and numerous mergers
and acquisitions. Mr. Marcus received a Juris Doctorate from Benjamin N. Cardozo
School of Law in 1989.
Ronan McGrath has served on the Company's Board of Directors since
June 2000. Mr. McGrath has served as the Chief Information Technology Officer of
Rogers Communications Inc. and the President of Rogers Shares Services Inc.,
since their inceptions in 1996. Mr. McGrath was the Chief Information Technology
Officer of Canadian National Railways from 1992 to 1996 and was a Senior Manager
of Arthur Andersen from 1977 to 1979. Mr. McGrath was awarded the Canadian Chief
Information Technology Officer of the Year Award in 1995. Mr. McGrath currently
serves on Compaq Computer's Board of Advisers and is a member of the Board of
Directors of The Information Technology Association of Canada.
Joel Schoenfeld has served on the Company's Board of Directors since
April 2001. Mr. Shoenfeld has served as an Executive Vice President and General
Counsel of BMG Entertainment (BMG), the entertainment division of Bertelsmann
AG, since 1989, with responsibility for all legal and business affairs of BMG
worldwide. In his capacity as Executive Vice President and General Counsel, Mr.
Shoenfeld is responsible for negotiating and analyzing new and existing business
ventures and territorial expansion on a global level; international intellectual
policy issues; international antitrust and competition legal matters; and
privacy and database protection compliance. Mr. Schoenfeld has focused on policy
matters impacting the entertainment business, and particularly e-commerce. In
recognition of this, he was appointed 1 of 12 Commissioners on the Industry
Advisory Commission to the World Intellectual Property Organization. Mr.
Schoenfeld is a member of the Executive Board and Central Board of Directors of
the IFPI, the international trade federation for the worldwide music business.
He was elected Chairman of the IFPI Council in 1999, a position he still holds.
Mr. Schoenfeld served as General Counsel and Executive Vice President at the
RIAA (the trade association of U.S. record producing companies), where he worked
for 12 years prior to joining BMG, and then served on RIAA's Board of Directors
for the next 10 years.
8
Robert Escobio, director nominee, is currently the President and
Chief Executive Officer of Capital Investment Services, Inc., an investment
brokerage firm based in Florida. In these roles, Mr. Escobio is responsible for
all aspects of a "broker/dealer" including financial, compliance, sales and
operational procedures. Mr. Escobio is also a Portfolio Manager for many
prominent individuals and works with various international institutions,
brokers, and dealers. Prior to being employed by Capital Investment Services,
Inc, Mr. Escobio was the Executive Vice President and International Director for
Brill Securities Inc. where he managed portfolios for numerous high net-worth
customers and performed institutional trading. Mr. Escobio also had numerous
managerial roles in companies such as Cardinal Capital Management, Smith Barney,
Prudential Securities, and Dean Witter. Mr. Escobio holds an MBA and a BSBA in
Finance and Management.
Committees of the Board of Directors
In July 1998, the Company's Board of Directors formalized the creation
of a Compensation Committee, which is currently comprised of John Dunne, Arthur
S. Marcus and Ronan McGrath. The Compensation Committee has: (i) full power and
authority to interpret the provisions of, and supervise the administration of,
the Company's 1998 Stock Option Plan and 2000 Stock Option Plan, as well as any
stock option plans adopted in the future; and (ii) the authority to review all
compensation matters relating to the Company. The Compensation Committee has not
yet formulated compensation policies for senior management and executive
officers. However, it is anticipated that the Compensation Committee will
develop a company-wide program covering all employees and that the goals of such
program will be to attract, maintain, and motivate the Company's employees. It
is further anticipated that one of the aspects of the program will be to link an
employee's compensation to his or her performance, and that the grant of stock
options or other awards related to the price of the shares of the Company's
common stock will be used in order to make an employee's compensation consistent
with shareholders' gains.
It is expected that salaries will be set competitively relative to the
information technology and engineering services and consulting industry and that
individual experience and performance will be considered in setting such
salaries.
In July 1998, the Company's Board of Directors also formalized the
creation of an Audit Committee, which currently consists of Kelly Hankinson,
Joel Schoenfeld and John Dunne. The Audit Committee is charged with reviewing
the following matters and advising and consulting with the Company's entire
Board of Directors with respect to: (i) the preparation of the Company's annual
financial statements in collaboration with the Company's chartered accountants;
(ii) annual review of the Company's financial statements and annual reports; and
(iii) all contracts between the Company and the Company's officers, directors
and other of the Company's affiliates. The Audit Committee, like most
independent committees of public companies, does not have explicit authority to
veto any actions of the Company's entire Board of Directors relating to the
foregoing or other matters; however, the Company's senior management,
recognizing their own fiduciary duty to the Company and the Company's
shareholders, is committed not to take any action contrary to the recommendation
of the Audit Committee in any matter within the scope of its review.
The Company has established an Executive committee, comprised of
certain of the Company's executive officers and key employees, which allows for
the exchange of information on industry trends and promotes "best practices"
among the Company's business units. Currently, the Executive Committee consists
of Declan A. French, Laurie Bradley, Tony French, Mike Reid, Kelly Hankinson,
Denise Dunne-Fushi, Sandra Hokansson and Robert Trick.
During the year ended December 31, 2000, the Company's Board of
Directors met 7 times on the following dates: January 26, 2000, January 28,
2000, March 22, 2000, April 24, 2000, June 12, 2000, August 11, 2000, and
November 17, 2000, at which all of the directors were present; and acted by
written consent in lieu of a meeting 6 times on the following dates: February 4,
2000, February 5, 2000, March 23, 2000, April 27, 2000, May 5, 2000 and May 17,
2000. During the year ended December 31, 2000, the Compensation Committee met on
March 22, 2000 and May 9, 2000, the Audit Committee met on March 22, 2000 and
the Executive Committee met on a monthly basis.
9
Indemnification of Officers and Directors
The Company's By-laws provide that the Company shall indemnify, to the
fullest extent permitted by Canadian law, the Company's directors and officers
(and former officers and directors). Such indemnification includes all costs and
expenses and charges reasonably incurred in connection with the defense of any
civil, criminal or administrative action or proceeding to which such person is
made a party by reason of being or having been the Company's officer or director
if such person was substantially successful on the merits in his or her defense
of the action and he or she acted honestly and in good faith with a view to the
Company's best interests, and if a criminal or administrative action that is
enforced by a monetary penalty, such person had reasonable grounds to believe
his or her conduct was lawful.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted, the Company's directors, officers and
controlling persons pursuant to the foregoing provisions, or otherwise, the
Company has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act of 1933, as amended, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses, incurred or paid by one of the Company's
directors, officers or controlling persons in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person, the Company will, unless in the opinion of its counsel that the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933, as amended, and will
be governed by the final adjudication of such issue.
Executive Compensation
The following table sets forth certain information regarding
compensation paid by the Company during each of the last 3 fiscal years to the
Company's Chief Executive Officer and to each of the Company's executive
officers who earned in excess of $100,000 during the year ended December 31,
2000:
Summary Compensation Table
Name and Restricted Other
Principal Annual Stock Com-
Position Year Salary Bonus Awards Options/SARs Pensation
-------- ---- ------ ----- ------- ------------ ---------
Declan A. French, 2000 $100,000 -0- -0- 29,000 1,200,000(1)
Chief Executive Officer 1999 106,342 -0- -0- 104,000 -0-
and Chairman of the 1998 106,342 -0- -0- -0- -0-
Board
John A. Irwin, 2000 100,000 -0- -0- 4,000 $80,000(2)
Former 1999 102,000 -0- -0- 4,000 94,149(2)
President-Systemsearch 1998 130,580 -0- -0- -0- 35,888(2)
Consulting Services Inc.
John R. Wilson, 2000 80,000 -0- -0- 4,000 $80,000(3)
President-International 1999 81,600 -0- -0- 24,000 76,915(3)
Career Specialists Ltd. 1998 90,000 -0- -0- -0- 77,282(3)
Roger W. Walters, 2000 200,000 -0- -0- 104,000 -0-
Former Executive Vice 1999 200,000(4) -0- -0- 4,000 -0-
President - US 1998 -0- -0- -0- -0- -0-
Operations,
President-Cad Cam, Inc.
Thomas E. Shoup, 2000 175,000(5) -0- -0- 4,000 -0-
Former President and 1999 43,759(6) -0- -0- 4,000 -0-
Chief Operating Officer 1998 -0- -0- -0- -0- -0-
10
(1) This reflects 1,200,000 shares of common stock issued to Mr. French in lieu
of cash bonuses payable for the fiscal years of 1999 and 2000 pursuant to
his employment agreement with the Company.
(2) This reflects commissions paid pursuant to Mr. Irwin's employment agreement
with the Company.
(3) This reflects commissions paid pursuant to Mr. Wilson's employment agreement
with the Company.
(4) This reflects the salary paid to Mr. Walters as of September 16, 1999, the
date of the Company's acquisition of Cad Cam, Inc.
(5) This reflects the salary paid to Mr. Shoup through December 22, 2000, the
effective date of Mr. Shoup's resignation as an officer of the Company.
(6) This reflects the salary paid to Mr. Shoup as of September 16, 1999, the
date of the Company's acquisition of Cad Cam, Inc.
Employment Agreements
The Company has entered into an employment agreement with Declan A.
French whereby he will serve as the Company's Chairman of the Board and Chief
Executive Officer for a period of 2 years commencing on June 1, 1999. Mr.
French shall be paid a base salary of $98,000 and a bonus equal to (i) 2% of the
Company's gross profit, plus (ii) for each fiscal year, 1% of the increase in
revenue from the prior fiscal year. Mr. French's right to receive the latter
portion of the bonus continues for 1 year beyond the termination of the
employment agreement. In February 2001, the Company issued 1,200,000 shares of
its common stock as payment in full for the bonuses due to Mr. French for the
fiscal years of 1999 and 2000 pursuant to the terms of his employment agreement
with the Company.
On May 19, 1998, in connection with the acquisition of International
Career Specialists Ltd., the Company entered into an employment agreement with
John A. Irwin whereby he served as President of International Career Specialists
Ltd. The employment agreement was for a term of 3 years commencing on January 1,
1998, the effective date of the acquisition of International Career Specialists
Ltd. Mr. Irwin received a salary of $130,000 plus a quarterly bonus of 2% of all
permanent placement service revenue and 2% of the gross profit all contract
services revenue. Mr. Irwin's contract was not renewed and he is no longer in
the employ of the Company.
In February 1998, in connection with the acquisition of Systemsearch
Consulting Services Inc., the Company entered into a 3-year employment agreement
with John R. Wilson whereby he served as President of Systemsearch Consulting
Services Inc. at a salary of $120,000 per year. The agreement was effective as
of January 2, 1997. Mr. Wilson received a commission of 10% of the permanent
placement revenue of Systemsearch Consulting Services Inc. Additionally, he
received $0.65 for every hour of contract services provided by information
technology professionals placed by Systemsearch Consulting Services Inc.,
provided that the gross margin on such hour exceeded $6.50. Pursuant to the
agreement, Mr. Wilson had control of the day-to-day management of Systemsearch
Consulting Services Inc. Mr. Wilson's contract was not renewed, however, Mr.
Wilson continues to be employed by the Company on a month-to-month basis. Mr.
Wilson currently receives an annual salary of $67,000 per year plus 10% of
personal gross profit and 10% of monthly office gross profit in excess of
$47,000.
On September 16, 1999, in connection with the acquisition of Cad Cam,
Inc., Roger W. Walters was elected to the Company's Board of Directors. On March
14, 2001, Mr. Walters resigned from the Board of Directors effective March 30,
2001.
On January 1, 2000, in connection with the acquisition of Object Arts
Inc., the Company entered into an employment agreement with Marilyn Sinclair
whereby she was to serve as the Company's Vice President and as President of
Object Arts Inc. The employment agreement was for a term of 3 years commencing
on January 1, 2000 with an annual salary of $82,000 per year. The agreement was
terminated on March 9, 2001, the effective date of Ms. Sinclair's resignation
from the Company. Ms. Sinclair resigned from the Board of Directors effective
April 4, 2001.
On April 25, 2000, in connection with the acquisition of Micro Tech
Professionals, Inc., the Company entered into an employment agreement with
Denise Dunne-Fushi, pursuant to which she served as the Company's Vice-President
and as President of Micro Tech Professionals, Inc. The employment agreement was
for a term of 1 year commencing on April 25, 2000, the effective date of the
acquisition, with an annual salary of $125,000 per year and a bonus of $25,000.
The Company and Mrs. Dunne-Fushi are currently in the process of negotiating the
terms of the renewal of her employment agreement. Mrs. Dunne-Fushi continues to
serve as the Company's Vice President and as President of Micro Tech
Professionals, Inc. on a month-to-month basis under the same terms as described
above.
11
On November 1, 2000, in connection with the business combination with
TidalBeach Inc., the Company entered into an employment agreement with Michael
Reid pursuant to which Mr. Reid will serve as the Company's Chief Information
Officer and as the President of TidalBeach Inc. The employment agreement is for
a term of 2 years commencing on November 1, 2000, with an annual salary of
$123,000.
On January 29, 2001, the Company entered into an employment agreement
with Laurie Bradley whereby she will serve as the Company's President. Ms.
Bradley shall be paid an annual salary of $130,000 per year and a performance
bonus. The employment agreement is for an indeterminate period of time.
On March 1, 2001, the Company entered into an employment agreement with
Tony French whereby he will serve as the Company's Executive Vice President. Mr.
French shall be paid an annual salary of $100,000 per year and a performance
bonus. The employment agreement is for an indeterminate period of time. In the
event Mr. French is terminated for any reason, including but not limited to, the
acquisition of the Company, Mr. French shall be entitled to a severance payment
equal to 1 years salary. Mr. French is the son of Declan A. French.
On March 1, 2001, the Company entered into an employment agreement with
Kelly Hankinson whereby she will serve as the Company's Chief Financial Officer,
Secretary and Treasurer. Ms. Hankinson shall be paid an annual salary of
$100,000 per year. The employment agreement is for an indeterminate period of
time. In the event Ms. Hankinson is terminated for any reason, including but not
limited to, the acquisition of the Company, Ms. Hankinson shall be entitled to a
severance payment equal to 1 years salary.
No other officer has an employment agreement with the Company.
12
Compensation of Directors
There are no standard arrangements for the payment of any fees to
directors of the Company for acting in such capacity. Directors of the Company
have been issued warrants and/or options for services rendered in their capacity
as directors. Directors are reimbursed for expenses for attending meetings.
The Board of Directors and the Company's shareholders have adopted a
1998 Stock Option Plan and 2000 Stock Option Plan, pursuant to which options
have been granted to officers, directors, consultants, key employees, advisors
and similar parties who provide their skills and expertise to the Company.
Options, Warrants or Rights
On August 19, 1999, Declan A. French was issued an option to purchase
100,000 shares of the Company's common stock at an exercise price of $3.19 per
share. The option was issued in consideration for services rendered to the
Company in his capacity as Chairman of the Board and Chief Executive Officer.
The option is immediately exercisable and expires on August 19, 2004.
On August 19, 1999, Tony French was issued an option to purchase 50,000
shares of the Company's common stock at an exercise price of $3.19 per share.
The option was issued in consideration for services rendered to the Company in
his capacity as an employee. The option is immediately exercisable and expires
on August 19, 2004.
On August 19, 1999, John R. Wilson was issued an option to purchase
20,000 shares of the Company's common stock at an exercise price of $3.19 per
share. The option was issued in consideration for services rendered to the
Company in his capacity as President of Systemsearch Consulting Services Inc.
The option is immediately exercisable and expires on August 19, 2004.
On August 19, 1999, Kelly Hankinson was issued an option to purchase
25,000 shares of the Company's common stock at an exercise price of $3.19 per
share. The option was issued in consideration for services rendered to the
Company in her capacity as Vice President, Finance and Administration and Group
Controller. The option is immediately exercisable and expires on August 19,
2004.
On August 19, 1999, Arthur S. Marcus was issued an option to purchase
2,500 shares of the Company's common stock at an exercise price of $3.19 per
share. The option was issued in consideration for legal services rendered to the
Company. The option is immediately exercisable and expires on August 19, 2004.
On January 1, 2000, Roger W. Walters, a former officer and director of
the Company, was issued an option to purchase 25,000 shares of the Company's
common stock at an exercise price of $3.25 per share. The option was issued in
connection with the Company's acquisition of Cad Cam, Inc. The option was
immediately exercisable and expired on December 31, 2000. Such option was never
exercised by Mr. Walters.
On March 22, 2000, Declan A. French was issued an option to purchase
4,000 shares of the Company's common stock at an exercise price of $3.19 per
share. The option was issued in consideration for services rendered to the
Company in his capacity as Chairman of the Board and Chief Executive Officer.
The option shall vest at a rate of 1,333 shares of common stock per year and
shall be fully vested on March 22, 2003. The option expires on March 22, 2005.
13
On March 22, 2000, Thomas E. Shoup, the Company's former President and
Chief Operating Officer, was issued an option to purchase 4,000 shares of the
Company's common stock at an exercise price of $3.19 per share. The option was
issued in connection with the Company's acquisition of Cad Cam, Inc. and in
consideration for services rendered to the Company in his capacity as President
and Chief Operating Officer. The option was to vest at a rate of 1,333 shares of
common stock per year and was to be fully vested on March 22, 2003. The option
was to expire on March 22, 2005. Such option terminated on December 22, 2000,
the effective date of Mr. Shoup's resignation as an officer of the Company.
On March 22, 2000, Tony French was issued an option to purchase 4,000
shares of the Company's common stock at an exercise price of $3.19 per share.
The option was issued in consideration for services rendered to the Company in
his capacity as Executive Vice President. The option shall vest at a rate of
1,333 shares of common stock per year and shall be fully vested on March 22,
2003. The option expires on March 22, 2005.
On March 22, 2000, Kelly Hankinson was issued an option to purchase
3,500 shares of the Company's common stock at an exercise price of $3.19 per
share. The option was issued in consideration for services rendered to the
Company in her capacity as Vice President, Finance and Administration and Group
Controller. The option shall vest at a rate of 1,167 shares of common stock per
year and shall be fully vested on March 22, 2003. The option expires on March
22, 2005.
On March 22, 2000, Roger W. Walters, a former officer and director of
the Company, was issued an option to purchase 4,000 shares of the Company's
common stock at an exercise price of $3.19 per share. The option was issued in
consideration for services rendered to the Company in his capacity as Executive
Vice President of US Operations and as a director. The option shall vest at a
rate of 1,333 shares of common stock per year and shall be fully vested on March
22, 2003. The option expires on March 22, 2005.
On March 22, 2000, John R. Wilson was issued an option to purchase
4,000 shares of the Company's common stock at an exercise price of $3.19 per
share. The option was issued in consideration for services rendered to the
Company in his capacity as President of Systemsearch Consulting Services Inc.
The option shall vest at a rate of 1,333 shares of common stock per year and
shall be fully vested on March 22, 2003. The option expires on March 22, 2005.
On March 22, 2000, John A. Irwin, a former officer of the Company, was
issued an option to purchase 4,000 shares of the Company's common stock at an
exercise price of $3.19 per share. The option was issued in consideration for
services rendered to the Company in his capacity as President of International
Career Specialists Ltd. The option shall vest at a rate of 1,333 shares of
common stock per year and shall be fully vested on March 22, 2003. The option
expires on March 22, 2005.
On March 22, 2000, William J. Neil, a former director of the Company,
was issued an option to purchase 10,000 shares of the Company's common stock at
an exercise price of $3.19 per share. The option was issued in consideration for
services rendered to the Company in his capacity as a director. The option shall
vest at a rate of 3,333 shares of common stock per year and shall be fully
vested on March 22, 2003. The option expires on March 22, 2005.
On March 22, 2000, John Dunne was issued an option to purchase 10,000
shares of the Company's common stock at an exercise price of $3.19 per share.
The option was issued in consideration for services rendered to the Company in
his capacity as director. The option shall vest at a rate of 3,333 shares of
common stock per year and shall be fully vested on March 22, 2003. The option
expires on March 22, 2005.
14
On March 22, 2000, James Reddy, a former director of the Company, was
issued an option to purchase 10,000 shares of the Company's common stock at an
exercise price of $3.19 per share. The option was issued in consideration for
services rendered to the Company in his capacity as director. The option shall
vest at a rate of 3,333 shares of common stock per year and shall be fully
vested on March 22, 2003. The option expires on March 22, 2005.
On March 31, 2000, Roger W. Walters, a former officer and director of
the Company, was issued an option to purchase 25,000 shares of the Company's
common stock at an exercise price of $2.75 per share. The option was issued in
connection with the Company's acquisition of Cad Cam, Inc. The option was
immediately exercisable and expired on December 31, 2000. The option was never
exercised by Mr. Walters.
On May 9, 2000, Marilyn Sinclair, a former officer and director of the
Company, was issued an option to purchase 4,000 shares of the Company's common
stock at an exercise price of $3.25 per share. The option was issued in
consideration for services rendered to the Company in her capacity as Vice
President and President, Object Arts Inc. The option shall vest at a rate of
1,333 shares of common stock per year and shall be fully vested on May 9, 2003.
The option expires on May 9, 2005
On June 30, 2000, Roger W. Walters, a former officer and director of
the Company, was issued an option to purchase 25,000 shares of the Company's
common stock at an exercise price of $3.00 per share. The option was issued in
connection with the Company's acquisition of Cad Cam, Inc. The option was
immediately exercisable and expired on December 31, 2000. The option was never
exercised by Mr. Walters.
On September 30, 2000, Roger W. Walters, a former officer and director
of the Company, was issued an option to purchase 25,000 shares of the Company's
common stock at an exercise price of $2.12 per share. The option was issued in
connection with the Company's acquisition of Cad Cam, Inc. The option was
immediately exercisable and expired on December 31, 2000. The option was never
exercised by Mr. Walters.
On December 26, 2000, Declan A. French was issued an option to purchase
25,000 shares of the Company's common stock at an exercise price of $0.70 per
share. The option was issued in consideration for services rendered to the
Company in his capacity as Chairman of the Board. The option shall vest at a
rate of 8,333 shares of common stock per year and shall be fully vested on
December 26, 2003. The option expires on December 26, 2005
On December 26, 2000, Kelly Hankinson was issued an option to purchase
100,000 shares of the Company's common stock at an exercise price of $0.70 per
share. The option was issued in consideration for services rendered to the
Company in her capacity as director. The option expires on December 26, 2005.
On December 26, 2000, John Dunne was issued an option to purchase
25,000 shares of the Company's common stock at an exercise price of $0.70 per
share. The option was issued in consideration for services rendered to the
Company in his capacity as director. The option shall vest at a rate of 8,333
shares of common stock per year and shall be fully vested on December 26, 2003.
The option expires on December 26, 2005.
15
On December 26, 2000, Arthur S. Marcus was issued an option to purchase
25,000 shares of the Company's common stock at an exercise price of $0.70 per
share. The option was issued in consideration for services rendered to the
Company in his capacity as director. The option shall vest at a rate of 8,333
shares of common stock per year and shall be fully vested on December 26, 2003.
The option expires on December 26, 2005.
On December 26, 2000, Ronan McGrath was issued an option to purchase
25,000 shares of the Company's common stock at an exercise price of $0.70 per
share. The option was issued in consideration for services rendered to the
Company in his capacity as director. The option shall vest at a rate of 8,333
shares of common stock per year and shall be fully vested on December 26, 2003.
The option expires on December 26, 2005.
On December 26, 2000, Mike Reid was issued an option to purchase
100,000 shares of the Company's common stock at an exercise price of $0.70 per
share. The option shall vest at a rate of 33,333 shares of common stock per year
and shall be fully vested on December 26, 2003. The option expires on December
26, 2005.
On December 26, 2000, Joel Schoenfeld was issued an option to purchase
25,000 shares of the Company's common stock at an exercise price of $0.70 per
share. The option was issued in consideration for services rendered to the
Company in his capacity as an advisor to the Board of Directors. The option
shall vest at a rate of 8,333 shares of common stock per year and shall be fully
vested on December 26, 2003. The option expires on December 26, 2005.
On March 14, 2001, the Company repriced 100,000 options belonging to
Roger W. Walters to $1.00 per share in consideration of debt forgiveness of
$75,000 and the restructuring of debt totaling $250,000 on the notes payable to
Mr. Walters in connection with the Company's purchase of Cad Cam, Inc. The
options shall be exercisable during the period April 1, 2001 to April 4, 2004.
The table below reflects the options granted to our past and present
named officers and the percentage of the total options issued to such persons
during the fiscal year 2000:
Officer and/or Director Expiration Date Options Percent Exercise Price
----------------------- --------------- ------- ------- --------------
Declan A. French March 22, 2005 4,000 $3.19
December 26, 2005 25,000 6.7% $0.70
John A. Irwin March 22, 2005 4,000 0.09% $3.19
John R. Wilson March 22, 2005 4,000 0.09% $3.19
Roger W. Walters December 31, 2000 25,000(1) $3.25
March 22, 2003 4,000 $3.19
December 31, 2000 25,000(1) $2.75
December 31, 2000 25,000(1) $3.00
December 31, 2000 25,000(1) 23.9% $2.12
Thomas E. Shoup March 22, 2005 4,000 0.09% $3.19
(1) The exercise price of such options was repriced by the Company to $1.00 per
share in consideration for the forgiveness of $75,000 in debt and the
restructuring of debt totaling $250,000 pursuant to notes payable to Mr.
Walters in connection with the Company's acquisition of Cad Cam, Inc. In
addition, the term of such options was extended to April 4, 2004.
16
INTERESTS OF MANAGEMENT IN CERTAIN TRANSACTIONS
In April 1998, the Company acquired all the issued and outstanding
capital stock of Systemsearch Consulting Services Inc. and Systems PS Inc. from
John R. Wilson for aggregate consideration of $98,000 and 174,551 shares of the
Company's common stock. The acquisition was effective as of January 2, 1997.
Systems PS Inc. is currently inactive but holds certain assets utilized by
Systemsearch Consulting Services Inc. in its operations. Mr. Wilson was not
affiliated with the Company prior to the acquisition.
On May 19, 1998, the Company completed the acquisition of all the
issued and outstanding capital stock of International Career Specialists Ltd.
for $326,000 in cash and 130,914 shares of the Company's common stock to John A.
Irwin, a former officer of the Company. In connection with the acquisition,
International Career Specialists Ltd. made a distribution to Mr. Irwin of
certain of its assets that were not necessary for the operation of the business.
The transaction was effective as of January 1, 1998. Mr. Irwin was not
affiliated with the Company prior to the acquisition.
In October 1997, in consideration for business consulting services,
including identifying, structuring and effecting the acquisitions of
Systemsearch Consulting Services Inc. and International Career Specialists Ltd.,
the Company issued 113,459 shares its common stock to Globe Capital Corporation,
which is controlled by Lloyd MacLean, the Company's former Chief Financial
Officer and a former director.
In May 1998, the Company entered into a consulting agreement with
Robert M. Rubin, one of the Company's former directors, pursuant to which Mr.
Rubin will assist the Company in structuring and negotiating acquisitions,
strategic partnerships and other expansion opportunities. In exchange for such
services, Mr. Rubin received an option to purchase 200,000 shares of the
Company's common stock at a purchase price of $2.10 per share. Mr. Rubin has
agreed not to sell, transfer, assign, hypothecate or otherwise dispose of the
shares of the Company's common stock issuable upon exercise of the option for a
period of 2 years after exercise without the Company's consent. As of the Record
Date, the Company issued 80,000 shares of common stock upon Mr. Rubin's exercise
of such option.
In November 1998, the Company purchased certain assets of Southport
Consulting, Inc. from Michael Carrazza, one of the Company's former directors,
for an aggregate of $300,000 in cash and 40,000 shares of the Company's common
stock. In February 2001, Mr. Carrazza instituted an action against the Company
in the Supreme Court of the State of New York alleging breach of contract and
unjust enrichment. Mr. Carrazza is seeking $250,000 in damages specifically
claiming that the Company failed to deliver cash and/or stock under the asset
purchase agreement.
On September 16, 1999, the Company completed the acquisition of all the
issued and outstanding capital stock of Cad Cam, Inc. for $2,000,000 in cash,
$2,500,000 pursuant to a promissory note and the issuance of $1,500,000 worth of
shares of the Company's common stock to Roger W. Walters, Cad Cam, Inc.'s former
president. As part of the transaction, Mr. Walters was elected to serve on the
Company's Board of Directors. The share purchase agreement was executed on
January 1, 1999 and the transaction was effective as of September 16, 1999. Mr.
Rogers was not affiliated with the Company prior to the acquisition. On March
14, 2001, Mr. Walters resigned from the Board of Directors effective March 30,
2001.
On January 1, 2000, the share purchase agreement by and among the
Company, Cad Cam, Inc., and Roger W. Walters was amended. Pursuant to the
amendment, the parties agreed that $1,000,000 of the $2,000,000 cash payment to
be made to Mr. Walters was to be paid in 4 equal quarterly payments of $250,000
commencing on January 1, 2000. In consideration for accepting the cash payment
in installments, the Company issued Mr. Walters options to purchase an aggregate
of 100,000 shares of common stock at exercise prices ranging from $2.12 to $3.25
per share, which options expired on December 31, 2000. On March 14, 2001, the
Company repriced such options belonging to Roger W. Walters to an exercise price
of $1.00 per share in consideration of debt forgiveness of $75,000 and the
restructuring of debt totaling $250,000 on the notes payable to Mr. Walters in
connection with the Company's purchase of Cad Cam, Inc. In addition, the term of
such options was extended to April 4, 2004.
17
On January 1, 2000, the Company completed the acquisition of all of the
issued and outstanding capital stock of Object Arts Inc., an Ontario
corporation, in consideration of: (i) the issuance of $900,000 of the Company's
common stock to Working Ventures Custodian Fund in exchange for the retirement
of outstanding subordinated debt; (ii) the issuance to Working Ventures
Custodian Fund an amount of the Company's common stock equal to the legal fees
and professional fees incurred and paid by Working Ventures Custodian Fund in
connection with the Company's acquisition of Object Arts Inc.; and (iii) the
issuance of $1,100,000 of the Company's common stock to the existing
shareholders of Object Arts Inc. As part of the transaction, the Company entered
into employment agreements with Marilyn Sinclair and Lars Laakes, former
officers of Object Arts Inc. Such employment agreements were for a term of 3
years commencing on January 1, 2000, the effective date of the acquisition, with
annual salaries of $82,000 and $75,000 per year, respectively. Neither Ms.
Sinclair nor Mr. Laakes were affiliated with the Company prior to the
acquisition. On March 9, 2001 Ms. Sinclair resigned as an officer of the
Company. On April 9, 2001, Ms. Sinclair resigned from the Board of Directors.
On April 25, 2000, the Company completed the acquisition of all of the
issued and outstanding capital stock of Micro Tech Professionals, Inc., a
Massachusetts corporation, in consideration of up to an aggregate of $4,500,000
in a combination of cash, notes payable and shares of the Company's common
stock, subject to specific performance criteria to be met. On the April 25,
2000, the Company paid to Denise Dunne-Fushi, the sole shareholder of Micro Tech
Professionals, Inc., $2,500,000 of the aggregate of $4,500,000, which was paid
in accordance with the following schedule: (i) $1,250,000 in cash; (ii) the
issuance of a $750,000 principal amount unsecured promissory note; and (iii) the
issuance of 133,333 shares of the Company's common stock. As part of the
transaction, the Company entered into an employment agreement with Denise
Dunne-Fushi, the former President of Micro Tech Professionals, Inc. Such
employment agreement was for a term of 1 year commencing on April 25, 2000, the
effective date of the acquisition, with an annual salary of $125,000 per year
and a bonus of $25,000. Mrs. Dunne-Fushi was not affiliated with the Company
prior to the acquisition. The Company and Mrs. Dunne-Fushi are currently in the
process of negotiating the terms of the renewal of her employment agreement.
Mrs. Dunne-Fushi continues to serve as the Company's Vice President and as
President of Micro Tech Professionals, Inc. on a month-to-month basis under the
same terms as described above.
On October 31, 2000, the Company consummated a business combination
with TidalBeach Inc., an Ontario-based Web development company. In consideration
for the business combination, the Company issued 250,000 shares of common stock
to the 2 shareholders of TidalBeach Inc. As part of the transaction, the Company
entered into an employment agreement with Michael Reid, the former President of
TidalBeach Inc. Such employment agreement is for a term of 2 years commencing on
November 1, 2000 with an annual salary of $123,000.
Effective December 26, 2000, shares and options were issued to the
following: Declan A. French, Tony French, Mike Reid, Kelly Hankinson, and Globe
Capital Corporation. These issuances were made pursuant to contracts and, or as
bonuses with regards to the various acquisitions throughout the course of the
fiscal year 2000. The amounts issued were as follows: 1,200,000 shares to Declan
A. French; 50,000 shares to Tony French; 100,000 options priced at $0.70 to Mike
Reid; and 50,000 shares and 100,000 options priced at $0.70 to Kelly Hankinson;
and 500,000 shares to Globe Capital Corporation.
18
During the fiscal year ended December 31, 2000 the Company paid to
Gersten, Savage & Kaplowitz, LLP, the Company's United States legal counsel,
approximately $100,000 and issued 30,632 shares of common stock in consideration
for legal services rendered. Arthur S. Marcus, one of the Company's directors,
is a partner of Gersten, Savage & Kaplowitz, LLP.
On March 14, 2001 Roger W. Walters resigned as the Company's Executive
Vice President of U.S. Operations and as a director effective March 30, 2001.
While the Company was private, it lacked sufficient independent
directors to ratify many of the foregoing transactions. However, the Company's
management believes that the foregoing transactions were on terms no less
favorable to the Company than could have been obtained from unaffiliated third
parties. All transactions consummated since the Company became public and all
future transactions between the Company and the Company's officers, directors or
5% shareholders, and their respective affiliates have been and, will be, on
terms no less favorable than could be obtained from unaffiliated third parties.
In the event that the Company enters into future affiliated transactions, such
transactions will be approved by the Company's independent directors who do not
have an interest in the transactions and who have access, at the Company's
expense, to the Company's counsel or independent legal counsel.
19
PROPOSAL NO. 2
THE RATIFICATION OF THE APPOINTMENT OF SCHWARTZ, LEVITSKY, FELDMAN, llp, AS THE
COMPANY'S INDEPENDENT CHARTERED ACCOUNTANTS FOR THE ENSUING YEAR.
The Board of Directors has unanimously approved and unanimously
recommends that the shareholders ratify the appointment of Schwartz, Levitsky,
Feldman, llp, as the Company's independent chartered accountants for the ensuing
year.
Shareholder Vote Required
Ratification of the appointment of Schwartz, Levitsky, Feldman, llp, as
the Company's independents chartered accountants for the ensuing year will
require the affirmative vote of the majority of the shares present in person or
represented by proxy at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF SCHWARTZ, LEVITSKY, FELDMAN, llp, AS THE COMPANY'S INDEPENDENT CHARTERED
ACCOUNTANTS FOR THE ENSUING YEAR.
20
PROPOSAL NO. 3
RATIFICATION OF THE ADOPTION OF THE COMPANY'S
2001 STOCK OPTION PLAN
At the Meeting a vote will be taken on a proposal to ratify the
adoption of the Company's 2001 Stock Option Plan (the "2001 Stock Option Plan"),
which contains 1,000,000 shares of common stock underlying stock options
available for grant thereunder. The 2001 Stock Option Plan was adopted by the
Board of Directors on May 7, 2001. A COPY OF THE 2001 STOCK OPTION PLAN IS
ATTACHED HERETO AS EXHIBIT A. As of the date of this Proxy, no options to
purchase shares of the Company's common stock have been granted to the Company's
employees, directors or outside consultants under the 2001 Stock Option Plan.
Description of the 2001 Plan
The 2001 Stock Option Plan will be administered by the Company's
Compensation Committee, which will determine among other things, those
individuals who shall receive options, the time period during which the options
may be partially or fully exercised, the number of shares of the Company's
common stock issuable upon the exercise of the options and the option exercise
price
The 2001 Stock Option Plan is effective for a period for 10 years,
expiring in 2011. Options to acquire 1,000,000 shares of the Company's common
stock may be granted to officers, directors, consultants, key employees,
advisors and similar parties who provide the Company with their skills and
expertise. The 2001 Stock Option Plan is designed to enable management to
attract and retain qualified and competent directors, employees, consultants and
independent contractors. Options granted under the 2001 Stock Option Plan may be
exercisable for up to 10 years, generally require a minimum 3-year vesting
period, and shall be at an exercise price all as determined by the Company's
Compensation Committee provided that, the exercise price of any options may not
be less than the fair market value of the shares of the Company's common stock
on the date of the grant. Options are non-transferable, and are exercisable only
by the participant (or by the option holder's guardian or legal representative)
during the option holder's lifetime or by the option holder's legal
representatives following death.
If: (i) the Company shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary of an
entity); (ii) the Company sells, leases or exchanges all or substantially all of
its assets to any other person or entity; (iii) the Company is to be dissolved
and liquidated; (iv) any person or entity, including a "group" as contemplated
by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires
or gains ownership or control (including, without limitation, power to vote) of
more than 50% of the outstanding shares of the Company's voting stock (based
upon voting power); or (v) as a result of or in connection with a contested
election of directors, the persons who were directors of the Company before such
election shall cease to constitute a majority of the Board of Directors (each
such event is referred to herein as a "Corporate Change"); no later than (a) 10
days after the approval by the shareholders of the Company of such merger,
consolidation, reorganization, sale, lease or exchange of assets or dissolution
or such election of directors or (b) 30 days after a change of control of the
type described in clause (iv), the Company's Compensation Committee, acting in
its sole discretion without the consent or approval of any optionee, shall act
to effect 1 or more of the following alternatives, which may vary among
individual optionees and which may vary among options held by any individual
optionee: (1) accelerate the time at which options then outstanding may be
exercised so that such options may be exercised in full for a limited period of
time on or before a specified date (before or after such Corporate Change) fixed
by the Company's Compensation Committee, after which specified date all
21
unexercised options and all rights of optionees thereunder shall terminate; (2)
require the mandatory surrender to the Company by selected optionees of some or
all of the outstanding options held by such optionees (irrespective of whether
such options are then exercisable under the provisions of the 2001 Stock Option
Plan) as of a date before or after such Corporate Change, specified by the
Company's Compensation Committee, in which event the Company's Compensation
Committee shall thereupon cancel such options and the Company shall pay to each
optionee an certain amount of cash per share; (3) make such adjustments to
options then outstanding as the Company's Compensation Committee deems
appropriate to reflect such Corporate Change (provided, however, that the
Company's Compensation Committee may determine in its sole discretion that no
adjustment is necessary to options then outstanding); or (4) provide that the
number and class of shares covered by an option theretofore granted shall be
adjusted so that such option shall thereafter cover the number and class of
shares or other securities or property (including, without limitation, cash) to
which the optionee would have been entitled pursuant to the terms of the
agreement of merger, consolidation or sale of assets and dissolution if,
immediately prior to such merger, consolidation or sale of assets, and
dissolution, the optionee had been the holder of record of the number of shares
of common stock then covered by such option.
If a participant ceases affiliation with the Company by reason of
death, permanent disability or retirement at or after age 65, the option shall
remain exercisable for 1 year from such occurrence but not beyond the option's
expiration date. Other types of termination allow the participant 90 days to
exercise the option, except for termination for cause which results in immediate
termination of the option.
Any unexercised options that expire or that terminate upon an
employee's ceasing to be employed by the Company become available again for
issuance under the 2001 Stock Option Plan, subject to applicable securities
law.
The 2001 Stock Option Plan may be terminated or amended at any time by
the Company's Board of Directors, except that the number of shares of the
Company's common stock reserved for issuance upon the exercise of options
granted under the 2001 Stock Option Plan may not be increased without the
consent of the Company's shareholders.
Shareholder Vote Required
Approval of the Company's 2001 Stock Option Plan requires the
affirmative vote of the holders of a majority of the shares of common stock
present in person or represented by proxy at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE COMPANY'S 2001
STOCK OPTION PLAN.
22
PROPOSAL NO. 4
TO VOTE ON THE CHANGE OF THE COMPANY'S CORPORATE NAME FROM THINKPATH.COM INC. TO
THINKPATH INC.
Management proposes that the corporate name of the Company be changed
from Thinkpath.com Inc. to Thinkpath Inc. Management believes the corporate name
of the Company should be changed to reflect the Company's recently expanded
repertoire of services which now include information technology, engineering,
consulting and recruitment technology.
Shareholder Vote Required
The change of the corporate name from Thinkpath.com Inc. to Thinkpath
Inc. will require the affirmative vote of 2/3 of the shares of common stock in
person or represented by proxy at the Meeting and entitled to vote on the change
of the corporate name. If 2/3 of the shares of common stock present in person or
represented by proxy at the Meeting vote in favor of changing the corporate name
of the Company from Thinkpath.com Inc. to Thinkpath Inc., the Company will file
with the Minister of Consumer and Business Services for the Province of Ontario
articles of amendment to effect such name change. THE TEXT OF SUCH RESOLUTION IS
ATTACHED HERETO AS EXHIBIT B.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE IN FAVOR OF CHANGING THE
COMPANY'S CORPORATE NAME FROM THINKPATH.COM INC. TO THINKPATH INC.
23
PROPOSAL NO. 5
TO VOTE UPON THE PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF ORGANIZATION TO
INCREASE THE AUTHORIZED NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK FROM
15,000,000 TO 30,000,000 SHARES.
The Board of Directors has adopted a resolution unanimously approving
and recommending to the Company's shareholders for their approval an amendment
to the Company's Articles of Organization to provide for an increase in the
authorized number of shares of common stock from 15,000,000 to 30,000,000
shares.
As of the Record Date, there were 13,804,895 issued and outstanding
shares of common stock excluding: (i) 870,000 shares issuable upon the exercise
of options issued under the Company's 1998 and 2000 Stock Option Plans; (ii)
3,258,473 shares of common stock underlying warrants issued in private
transactions; and (iii) up to approximately 6,000,000 shares of common stock
underlying the Company's Series C 7% Convertible Preferred Stock (the actual
number of shares to be issued upon such conversion(s) is dependent upon the
market price of the Company's common stock at the time of such conversion(s)).
The Board of Directors believes the increase in the authorized number
of shares of common stock is in the best interests of the Company in order to
have them available for, among other things, possible issuances in connection
with future acquisitions or financing activities. In addition, it is necessary
to authorize such shares to have them available for issuance upon: (i) the
conversion of the Company's Series C 7% Convertible Preferred Stock; (ii) the
exercise of the issued and outstanding warrants; and (iii) the exercise of the
issued and outstanding options. In addition, the additional shares of common
stock would be available for any proper corporate purpose including, without
limitation, the issuance in private or public sales as a means of raising
working capital, as consideration to be paid by the Company for the acquisition
of other businesses and properties, the issuance of stock splits or dividends
and the implementation of employee benefit plans.
The additional shares of common stock that would be available for
issuance if the proposed amendment is approved, could be issued for any proper
corporate purpose by the Board of Directors at any time without further
shareholder approval, subject to applicable law and to the rules of the Nasdaq
Stock Market, Inc. ("Nasdaq") that apply to the Company as a result of the
quotation of the common stock on the Nasdaq SmallCap Market so long as the
common stock is so quoted. Except as described above, further authorization from
the Company's shareholders will not be solicited prior to the issuance of common
stock. The voting and equity ownership rights of the Company's shareholders may
be diluted by such issuances. Shareholders will not have preemptive rights to
subscribe for shares of common stock, unless the Company grants such rights at
the time of issue. Other than described above, the Company currently has no
plans or proposals to issue any of the additional shares of common stock.
The Board of Directors is required to make any determination to issue
shares of common stock based on its judgment as to the best interests of the
Company. Although the Board of Directors has no present intention of doing so,
other than with respect to the issuance of common stock upon the conversion of
the Series C 7% Convertible Preferred Stock, the exercise of outstanding
warrants, and the exercise of outstanding options, it could issue shares of
common stock (within the limits imposed by applicable laws and the Nasdaq rules
as described above) that could, depending on the circumstances, make more
difficult or discourage an attempt to obtain control of the Company by means of
a merger, tender offer, proxy contest or otherwise. When in the judgment of the
Board of Directors such use would be in the best interest of the Company, such
shares could be used to create voting or other impediments or to discourage
persons seeking to gain control of the Company. Such shares could be privately
placed with purchasers favorable to the Board of Directors in opposing such
action. The issuance of new shares of common stock also could be used to dilute
the stock ownership of a person or entity seeking to obtain control of the
Company should the Board of Directors consider the action of such entity or
person not to be in the best interest of the Company. Any such issuance could
also have the effect of diluting the earnings per share, book value per share
and/or voting power of the common stock.
24
Shareholder Vote Required
The ratification of the proposal to amend the Company's Articles of
Organization to increase the authorized number of shares of the Company's common
stock from 15,000,000 to 30,000,000 shares will require the affirmative vote of
2/3 of the shares of common stock in person or represented by proxy at the
Meeting and entitled to vote on the amendment to the Company's Articles of
Organization. If 2/3 of the shares of common stock present in person or
represented by proxy at the Meeting vote in favor of amending the Company's
Articles of Organization to increase the authorized number of shares of the
Company's common stock from 15,000,000 to 30,000,000 shares, the Company will
file with the Minister of Consumer and Business Services for the Province of
Ontario articles of amendment to effect such increase in the authorized shares
of the Company's common stock. THE TEXT OF SUCH RESOLUTION IS ATTACHED HERETO
AS EXHIBIT B.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE IN FAVOR OF THE
RATIFICATION OF THE PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF ORGANIZATION TO
INCREASE THE AUTHORIZED NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK FROM
15,000,000 TO 30,000,000 SHARES.
25
PROPOSAL NO. 6
TO VOTE UPON THE RATIFICATION OF THE ISSUANCE OF MORE THAN 2,712,979 SHARES OF
THE COMPANY'S COMMON STOCK, IF NECESSARY, UPON: (I) THE CONVERSION OF THE
COMPANY"S SERIES C 7% CONVERTIBLE PREFERRED STOCK: AND (II) THE EXERCISE OF
WARRANTS, WHICH REPRESENTS AN ISSUANCE OF MORE THAN 20% OF THE ISSUED AND
OUTSTANDING SHARES OF THE COMPANY'S COMMON STOCK AS OF APRIL 24, 2001, THE
CLOSING DATE OF THE COMPANY'S APRIL 2001 PRIVATE PLACEMENT OFFERING, AND
THEREFORE REQUIRES SHAREHOLDER APPROVAL UNDER RULE 4460 OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC.
Rule 4460 of the National Association of Securities Dealers, Inc.
("NASD") requires the Company to obtain shareholder approval for the issuance of
securities involving the sale of 20% or more of its common stock at less than
fair market value. Nasdaq may de-list the securities of any issuer that fails to
obtain such shareholder approval before the issuance of such securities.
However, the corporate law of the Province of Ontario, the law under which the
Company is incorporated, does not require any such shareholder approval. Upon
the conversion of the Company's Series C 7% Convertible Preferred Stock and the
exercise of warrants, both of which were issued on the Company's April 2001
private placement offering, the Company may issue more than 20% of its issued
and outstanding shares of common stock as of April 24, 2001, the closing date of
the Company's April 2001 private placement offering.
The Company has continued to expand its operations through the United
States and Canada, through among other things, its acquisitions of Object Arts
Inc., Micro Tech Professionals, Inc. and TidalBeach Inc., and intends to
continue to develop an expanded network of offices to provide its services
throughout North America. As part of such expansion, it is necessary for the
Company to hire additional personnel and contractors.
In an effort to fully support the Company's expansion strategy and its
current working capital needs, the Company, through an April 2001 private
placement offering, issued: (i) 1,105 shares of its Series C 7% Convertible
Preferred Stock; and (ii) warrants to purchase an aggregate of 663,484 shares of
the Company's common stock, exercisable at any time and in any amount until
April 18, 2005 at a purchase price of $.5445 per share, in consideration of
gross proceeds of $1,000,000. For a detailed description of the Company's Series
C 7% Convertible Preferred Stock and warrants issued in the April 2001 private
placement offering, please see the section entitled "DESCRIPTION OF SECURITIES"
Please note that: (i) the conversion, or the potential conversion of
the Series C 7% Convertible Preferred Stock at a discount to the then prevailing
market price of the common stock; (ii) the exercise of the warrants; and (iii)
the immediate resale of the shares of common stock acquired upon conversion
and/or upon exercise, into the public market may depress the market price of the
Company's common stock and will have a dilutive impact on the Company's
shareholders.
26
Shareholder Vote Required
The ratification of the issuance of more than 2,712,979 shares of the
Company's common stock, if necessary, upon: (i) the conversion of the Company's
Series C 7% Convertible Preferred Stock; and (ii) the exercise of warrants, will
require the affirmative vote of a majority of the shares of common stock in
person or represented by proxy at the Meeting and entitled to vote thereon.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE IN FAVOR OF ISSUANCE OF
MORE THAN 2,712,979 SHARES OF THE COMPANY'S COMMON STOCK, IF NECESSARY, UPON:
(I) THE CONVERSION OF THE COMPANY'S SERIES C 7% CONVERTIBLE PREFERRED STOCK; AND
(II) THE EXERCISE OF WARRANTS.
27
PROPOSAL NO. 7
TO VOTE UPON THE RATIFICATION OF THE ISSUANCE OF MORE THAN 2,760,979
SHARES OF THE COMPANY'S COMMON STOCK, IF NECESSARY, UPON THE ISSUANCE OF THE
COMPANY'S COMMON STOCK AND/OR WARRANTS PURSUANT TO A CONTEMPLATED EQUITY LINE OF
CREDIT, WHICH SHARES AND/OR WARRANTS WILL BE ISSUED AT A DISCOUNT OF UP TO 20%
TO THE THEN PREVAILING MARKET PRICE OF THE COMPANY'S COMMON STOCK, WHICH
REPRESENTS AN ISSUANCE OF MORE THAN 20% OF THE ISSUED AND OUTSTANDING SHARES OF
THE COMPANY'S COMMON STOCK AS OF MAY 11, 2001, AND THEREFORE REQUIRES
SHAREHOLDER APPROVAL UNDER RULE 4460 OF THE NASD.
Rule 4460 of the NASD requires the Company to obtain shareholder
approval for the issuance of securities involving the sale of 20% or more of its
common stock at less than fair market value. Nasdaq may de-list the securities
of any issuer that fails to obtain such shareholder approval before the issuance
of such securities. However, the corporate law of the Province of Ontario, the
law under which the Company is incorporated, does not require any such
shareholder approval.
The Company is contemplating obtaining an equity line of credit
pursuant to which the Company would be required to issue shares of its common
stock and/or warrants, from time to time, at a discount of up to 20% to the then
prevailing market price of its common stock, in consideration for gross proceeds
of up to $10,000,000. Upon the issuance of such shares of common stock and/or
the conversion of such warrants, the Company may be required to issue more than
20% of its issued and outstanding shares of common stock.
The Company is currently reviewing several proposals from investor
groups offering to provide the Company with an equity line of credit.
The Board of Directors believes that obtaining an equity line of credit
is in the best interests of the Company in order to assist the Company in
meeting its current working capital needs and improving its current and
liquidity ratios. The Company's current working capital requirements consist
primarily of the financing of accounts receivable and debt repayment.
In the event the Company obtains an equity line of credit, it is
currently contemplated that such funds will be used for, among other things, the
following purposes:
- To repay approximately $460,000 to the Business Development Bank of
Canada pursuant to 6 outstanding loans;
- To repay approximately $1,230,000 to Roger W. Walters pursuant to
notes payable owed by the Company in connection with its
acquisition of Cad Cam, Inc.;
- To repay approximately $1,930,000 to Denise Dunne-Fushi pursuant to
notes payable owed by the Company in connection with its
acquisition of Micro Tech Professionals Inc.;
- To redeem the outstanding shares of Series C 7% Convertible
Preferred Stock;
- To repay approximately $375,000 pursuant to a loan with Bank One;
- To implement a marketing plan with respect to the Company's
software; and
- To hire additional sales personnel.
Please note that although currently, the intended uses of any funds
obtained through the contemplated equity line of credit will be for those items
discussed above, if circumstances require the application of those funds for
other matters relating to the Company's business not contemplated here, those
uses could be made.
28
In addition, please note that the issuance of shares of common stock
and/or warrants pursuant to an equity line of credit at a discount to the then
prevailing market price of the common stock and the immediate resale of the
shares of common stock issued pursuant thereto into the public market may
depress the market price of the Company's common stock and will have a dilutive
impact on the Company's shareholders.
Shareholder Vote Required
The ratification of the issuance of more than 2,760,979 shares of the
Company's common stock, if necessary, upon the issuance of the Company's common
stock and/or warrants pursuant to a contemplated equity line of credit, which
shares and/or warrants will be issued at a discount of up to 20% to the then
prevailing market price of the Company's common stock, will require the
affirmative vote of a majority of the shares of common stock in person or
represented by proxy at the Meeting and entitled to vote thereon.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE IN FAVOR OF THE ISSUANCE
OF MORE THAN 2,706,979 SHARES OF THE COMPANY'S COMMON STOCK, IF NECESSARY, UPON
THE ISSUANCE OF THE COMPANY'S COMMON STOCK AND/OR WARRANTS PURSUANT TO A
CONTEMPLATED EQUITY LINE OF CREDIT, WHICH SHARES AND/OR WARRANTS WILL BE ISSUED
AT A DISCOUNT OF UP TO 20% TO THE THEN PREVAILING MARKET PRICE OF THE COMPANY'S
COMMON STOCK.
29
SECTION 16(a) REPORTING
Under the securities laws of the United States, the Company's
directors, its executive (and certain other) officers, and any persons holding
10% or more of the Company's common stock must report their ownership of the
Company's common stock and any changes in that ownership to the Securities and
Exchange Commission. Specific due dates for these reports have been established.
During the year ended December 31, 2000, the Company believes all reports
required to be filed under Section 16(a) were filed on a timely basis.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
referred to in the Notice of Meeting, which will be presented for consideration
at the Meeting. However, it is possible that certain proposals may be raised at
the Meeting by 1 or more shareholders. In such case, or if any other matter
should properly come before the meeting, it is the intention of the person named
in the accompanying proxy to vote such proxy with his or her or its best
judgement.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company.
Solicitations may be made by mail, personal interview, telephone, and telegram
by directors, officers and employees of the Company. The Company will reimburse
banks, brokerage firms, other custodians, nominees and fiduciaries for
reasonable expenses incurred in sending proxy material to beneficial owners of
the Company's capital stock.
SHAREHOLDER PROPOSALS
In order to be included in the proxy materials for the Company's next
Annual Meeting of shareholders, shareholder proposals must be received by the
Company on or before February 5, 2002.
FORM 10-KSB
A copy of the Company's annual report on Form 10-KSB for the fiscal
year ended December 31, 2000, including any amendments thereto, as filed with
the Securities and Exchange Commission are available to shareholders free of
charge by writing to:
Thinkpath.com Inc.
55 University Avenue, Suite 505
Toronto, Ontario M5J 2H7
Attention: Corporate Secretary
30
FINANCIAL STATEMENTS
The Company's audited consolidated financial statements for the fiscal
year ended December 31, 2000 and the related Management's Discussion and
Analysis of Financial Condition and Results of Operations are included in the
Company's Form 10-KSB and are incorporated by herein by reference.
By order of the Board of Directors, May 21, 2001
/s/ Declan A. French
Chairman of the Board of Directors
31
EXHIBIT A
THINKPATH.COM INC.
2001 STOCK OPTION PLAN
I. Purpose of the Plan
The THINKPATH.COM INC. 2001 STOCK OPTION PLAN (the "Plan") is intended
to provide a means whereby certain employees of THINKPATH.COM INC., an Ontario
corporation (the "Company"), and its affiliates may develop a sense of
proprietorship and personal involvement in the development and financial success
of the Company, and to encourage them to remain with and devote their best
efforts to the business of the Company, thereby advancing the interests of the
Company and its shareholders. Accordingly, the Company may grant to certain
service providers ("Optionees") the option ("Option") to purchase common shares
of the Company ("Shares"), as hereinafter set forth.
Options granted under the Plan may be either incentive stock options,
within the meaning of section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code") ("Incentive Stock Options"), or options which do not
constitute Incentive Stock Options.
II. Administration
(a) The Plan shall be administered by a committee (the "Committee") of,
and appointed by, the Board of Directors of the Company (the "Board"), and the
Committee shall be (a) comprised solely of two or more outside directors (within
the meaning of section 162(m) of the Code and applicable interpretive authority
thereunder), and (b) constituted so as to permit the Plan to comply with Rule
16b-3, as currently in effect or as hereinafter modified or amended ("Rule
16b-3"), promulgated under the United States Securities Exchange Act of 1934, as
amended (the "1934 Act"). The Committee shall have sole authority to select the
Optionees from among those individuals eligible hereunder and to establish the
number of shares which may be issued under each Option. The limitation set forth
in the preceding sentence shall be applied in a manner which will permit
compensation generated under the Plan to constitute "performance-based"
compensation for purposes of section 162(m) of the Code, including, without
limitation, counting against such maximum number of shares, to the extent
required under section 162(m) of the Code and applicable interpretive authority
thereunder, any shares subject to Options that are cancelled or repriced. In
selecting the Optionees from among individuals eligible hereunder and in
establishing the number of shares that may be issued under each Option, the
Committee may take into account the nature of the services rendered by such
individuals, their present and potential contributions to the Company's success
and such other factors as the Committee in its discretion shall deem relevant.
(b) The Committee is authorized to interpret the Plan and may from time
to time adopt such rules and regulations, consistent with the provisions of the
Plan, as it may deem advisable to carry out the Plan. All decisions made by the
Committee in selecting the Optionees, in establishing the number of shares which
may be issued under each Option and in construing the provisions of the Plan
shall be final.
(c) The provisions of the Plan shall be interpreted and construed in
accordance with the laws of the Province of Ontario
32
III. Option Agreements
(a) Each Option shall be evidenced by a written agreement between the
Company and the Optionee ("Option Agreement") which shall contain such terms and
conditions as may be approved by the Committee. The terms and conditions of the
respective Option Agreements need not be identical. Specifically, an Option
Agreement may provide for the surrender of the right to purchase shares under
the Option in return for a payment in cash or Shares or a combination of cash
and Shares equal in value to the excess of the fair market value of the shares
with respect to which the right to purchase is surrendered over the option price
therefor ("Stock Appreciation Rights"), on such terms and conditions as the
Committee in its sole discretion may prescribe; provided that, except as
provided in subparagraph VIII(c) hereof, the Committee shall retain final
authority (i) to determine whether an Optionee shall be permitted, or (ii) to
approve an election by an Optionee, to receive cash in full or partial
settlement of Stock Appreciation Rights. Moreover, an Option Agreement may
provide for the payment of the option price, in whole or in part, by the
delivery of a number of Shares (plus cash if necessary) having a fair market
value equal to such option price.
(b) For all purposes under the Plan, the fair market value of a Share
on a particular date shall be equal to the mean of the high and low sales prices
of the Shares (i) reported by the SmallCap Market of NASDAQ on that date or (ii)
if the Shares are listed or quoted on a national stock exchange or quotation
system, reported on the stock exchange composite tape on that date; or, in
either case, if no prices are reported on that date, on the last preceding date
on which such prices of the Shares are so reported. If the Shares are traded
over the counter at the time a determination of its fair market value is
required to be made hereunder, its fair market value shall be deemed to be equal
to the average between the reported high and low or closing bid and asked prices
of the Shares on the most recent date on which the Shares were publicly traded.
In the event the Shares are not publicly traded at the time a determination of
its value is required to be made hereunder, the determination of its fair market
value shall be made by the Committee in such manner as it deems appropriate.
(c) Each Option and all rights granted thereunder shall not be
transferable and shall be exercisable during the Optionee's lifetime only by the
Optionee or the Optionee's guardian or legal representative.
(d) The Committee shall have the discretion to determine a vesting
schedule for any Option granted under the Plan. Unless otherwise determined by
the Committee, Options granted under the Plan shall vest at a rate of 1/3 per
year over three years and be exercisable prior to the day following the first
anniversary of the date on which the Options concerned are granted.
(e) The expiry date of an Option (the "Expiry Date") shall be the
earlier of the date fixed by the Committee, as set forth in the individual
Option Agreement, and the date established, if applicable, in clauses (i) to
(iii) below, provided that such date shall not be later than the tenth
anniversary of the date on which the Option is granted.
33
(i) If an Optionee ceases affiliation with the Company or an
affiliate by reason of death, permanent disability or
retirement at or after age 65, the Expiry Date shall be the
first anniversary of the occurrence.
(ii) If an Optionee ceases affiliation with the Company or an
affiliate for any other reason (other than termination of his
or her employment or other service for cause), the Expiry Date
shall be the date that is 90 days following the occurrence.
(iii) If an Optionee ceases affiliation with the Company or an
affiliate upon the termination of his or her employment or
other service for cause, then the Expiry Date shall be the
date on which the Company or its affiliate gives notice to the
Optionee of his or her termination.
IV. Eligibility of Optionee
(a) Options may be granted only to individuals who are employees
(including officers and directors who are also employees) of the Company or any
parent or subsidiary corporation (as defined in section 424 of the Code) of the
Company at the time the Option is granted; provided, however, that Options which
do not constitute Incentive Stock Options may be granted to individuals who are
directors (but not also employees) of the Company or any such parent or
subsidiary corporation. Subject to required regulatory approvals, Options may
also be granted to consultants, advisors and similar parties who provide their
skills and expertise to the Company or its affiliates. Options may be granted to
the same individual on more than one occasion.
(b) No Incentive Stock Option shall be granted to an individual if, at
the time the Option is granted, such individual owns shares possessing more than
10% of the total combined voting power of all classes of capital stock of the
Company or of its parent or subsidiary corporation, within the meaning of
section 422(b)(6) of the Code, unless (i) at the time such Option is granted the
option price is at least 110% of the fair market value of the Shares subject to
the Option and (ii) such Option by its terms is not exercisable after the
expiration of five years from the date of grant. To the extent that the
aggregate fair market value (determined at the time the respective Incentive
Stock Option is granted) of shares with respect to which Incentive Stock Options
are exercisable for the first time by an individual during any calendar year
under all incentive stock option plans of the Company and its parent and
subsidiary corporations exceeds US$100,000, such excess Incentive Stock Options
shall be treated as Options which do not constitute Incentive Stock Options. The
Committee shall determine, in accordance with applicable provisions of the Code,
Treasury Regulations and other administrative pronouncements, which of an
Optionee's Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the Optionee of such determination
as soon as practicable after such determination.
(c) The aggregate number of Shares reserved for issuance pursuant to
Options granted to any one Optionee shall not exceed 5% of the number of Shares
outstanding (on a non-diluted basis) at the time of such grant.
V. Shares Subject to the Plan
(a) The aggregate number of shares which may be issued under Options
granted under the Plan shall not exceed 1,000,000 Shares. Such shares may
consist of authorized but unissued Shares or previously issued Shares reacquired
by the Company. Any of such shares which remain unissued and which are not
subject to outstanding Options at the termination of the Plan shall cease to be
subject to the Plan but, until termination of the Plan, the Company shall at all
times make available a sufficient number of shares to meet the requirements of
the Plan. Should any Option hereunder expire or terminate prior to its exercise
in full, the shares theretofore subject to such Option may again be subject to
an Option granted under the Plan to the extent permitted under Rule 16b-3 and
applicable Canadian securities legislation.
(b) The aggregate number of shares which may be issued under the Plan
shall be subject to adjustment in the same manner as provided in Paragraph VIII
hereof with respect to Shares subject to Options then outstanding. Exercise of
an Option in any manner, including an exercise involving a Stock Appreciation
Right, shall result in a decrease in the number of Shares which may thereafter
be available, both for purposes of the Plan and for sale to any one individual,
by the number of shares as to which the Option is exercised. Separate share
certificates shall be issued by the Company for those shares acquired pursuant
to the exercise of an Incentive Stock Option and for those shares acquired
pursuant to the exercise of any Option which does not constitute an Incentive
Stock Option.
34
VI. Option Price
The purchase price of Shares issued under each Option shall be
determined by the Committee, but in no case shall such purchase price be less
than the fair market value of the Shares subject to the Option on the date the
Option is granted.
VII. Term of Plan
The Plan, shall be effective upon the date of its adoption by the
Board, provided the Plan is approved by the shareholders of the Company within
twelve months thereafter. Notwithstanding any provision in this Plan or in any
Option Agreement, no Option shall be exercisable prior to such shareholder
approval. Except with respect to Options then outstanding, if not sooner
terminated under the provisions of Paragraph IX, the Plan shall terminate upon
and no further Options shall be granted after the expiration of ten years from
the date of its adoption by the Board.
VIII. Recapitalization or Reorganization
(a) The existence of the Plan and the Options granted hereunder shall
not affect in any way the right or power of the Board or the shareholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities, the
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.
(b) The shares with respect to which Options may be granted are Shares
as presently constituted, but, if and whenever, prior to the expiration of an
Option theretofore granted, the Company shall effect a subdivision or
consolidation of Shares or the payment of a stock dividend on Shares without
receipt of consideration by the Company, the number of Shares with respect to
which such Option may thereafter be exercised (i) in the event of an increase in
the number of outstanding shares shall be proportionately increased, and the
purchase price per share shall be proportionately reduced, and (ii) in the event
of a reduction in the number of outstanding shares shall be proportionately
reduced, and the purchase price per share shall be proportionately increased.
(c) If the Company recapitalizes, reclassifies its capital stock, or
otherwise changes its capital structure ( a "recapitalization"), the number and
class of Shares covered by an Option theretofore granted shall be adjusted so
that such Option shall thereafter cover the number and class of shares of stock
and securities to which the Optionee would have been entitled pursuant to the
terms of the recapitalization if, immediately prior to the recapitalization, the
Optionee had been the holder of record of the number of Shares then covered by
such Option. If:
(i) the Company shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a
subsidiary of an entity);
(ii) the Company sells, leases or exchanges all or substantially all
of its assets to any other person or entity;
(iii) the Company is to be dissolved and liquidated;
(iv) any person or entity, including a "group" as contemplated by
Section 13(d)(3) of the 1934 Act, acquires or gains ownership or
control (including, without limitation, power to vote) of more
than 50% of the outstanding shares of the Company's voting stock
(based upon voting power); or
(v) as a result of or in connection with a contested election of
directors, the persons who were directors of the Company before
such election shall cease to constitute a majority of the Board
(each such event is referred to herein as a "Corporate Change");
35
no later than (a) ten days after the approval by the shareholders of the Company
of such merger, consolidation, reorganization, sale, lease or exchange of assets
or dissolution or such election of directors or (b) thirty days after a change
of control of the type described in clause (iv), the Committee, acting in its
sole discretion without the consent or approval of any Optionee, shall act to
effect one or more of the following alternatives, which may vary among
individual Optionees and which may vary among Options held by any individual
Optionee:
(1) accelerate the time at which Options then outstanding may be
exercised so that such Options may be exercised in full for a
limited period of time on or before a specified date (before
or after such Corporate Change) fixed by the Committee, after
which specified date all unexercised Options and all rights of
Optionees thereunder shall terminate;
(2) require the mandatory surrender to the Company by selected
Optionees of some or all of the outstanding Options held by
such Optionees (irrespective of whether such Options are then
exercisable under the provisions of the Plan) as of a date
before or after such Corporate Change, specified by the
Committee, in which event the Committee shall thereupon cancel
such Options and the Company shall pay to each Optionee an
amount of cash per share equal to the excess, if any, of the
amount calculated in subparagraph (d) below (the "Change of
Control Value") of the shares subject to such Option over the
exercise price(s) under such Options for such shares;
(3) make such adjustments to Options then outstanding as the
Committee deems appropriate to reflect such Corporate Change
(provided, however, that the Committee may determine in its
sole discretion that no adjustment is necessary to Options
then outstanding); or
(4) provide that the number and class of shares covered by an
Option theretofore granted shall be adjusted so that such
Option shall thereafter cover the number and class of shares
or other securities or property (including, without
limitation, cash) to which the Optionee would have been
entitled pursuant to the terms of the agreement of merger,
consolidation or sale of assets and dissolution if,
immediately prior to such merger, consolidation or sale of
assets, and dissolution, the Optionee had been the holder of
record of the number of Shares then covered by such Option.
(d) For the purposes of clause (2) in subparagraph (c) above, the
"Change of Control Value" shall equal the amount determined in clause (i), (ii)
or (iii), whichever is applicable, as follows:
(i) the per share price offered to shareholders of the Company in
any such merger, consolidation, reorganization, sale of assets
or dissolution transaction;
(ii) the price per share offered to shareholders of the Company in
any tender offer or exchange offer whereby a Corporate Change
takes place; or
(iii) if such Corporate Change occurs other than pursuant to a tender
or exchange offer, the fair market value per share of the shares
into which such Options being surrendered are exercisable, as
determined by the Committee as of the date determined by the
Committee to be the date of cancellation and surrender of such
Options.
36
In the event that the consideration offered to shareholders of the Company in
any transaction described in this subparagraph (d) or in subparagraph (c) above
consists of anything other than cash, the Committee shall determine the fair
cash equivalent of the portion of the consideration offered which is other than
cash.
(e) Any adjustment provided for in subparagraphs (b) or (c) above shall
be subject to any required shareholder action.
(f) Except as hereinbefore expressly provided, the issuance by the
Company of shares of any class or securities convertible into shares of any
class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
Shares subject to Options theretofore granted or the purchase price per share.
IX. Amendment or Termination of the Plan
The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Options have not theretofore been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time, provided that no change in any Option theretofore granted may be
made which would impair the rights of the Optionee without the consent of such
Optionee, and provided further that the Board may not make any alteration or
amendment which would increase the aggregate number of shares which may be
issued pursuant to the provisions of the Plan or change the class of individuals
eligible to receive Options under the Plan without the approval of the
shareholders of the Company.
X. Securities Laws
(a) The issue of Shares by the Company pursuant to the exercise of an
Option is subject to this Plan and compliance with the laws, rules and
regulations of all regulatory bodies applicable to the issuance and distribution
of the Company's securities and to the listing requirements of any stock
exchange or market on which the Shares may then be listed or quoted. The Company
shall not be obligated to issue any Shares pursuant to any Option granted under
the Plan at any time when the offering of the Shares covered by such Option has
not been registered under the United States Securities Act of 1933 or otherwise
qualified for distribution under such other U.S. state and federal and Canadian
provincial laws, rules or regulations as the Company or the Committee deems
applicable and, in the opinion of legal counsel for the Company, there is no
exemption from applicable prospectus and registration requirements of such laws,
rules or regulations available for the offering and sale of such shares.
(b) It is intended that the Plan and any grant of an Option made to a
person subject to Section 16 of the 1934 Act meet all of the requirements of
Rule 16b-3 thereunder. If any provision of the Plan or any such Option would
disqualify the Plan or such Option under, or would otherwise not comply with,
Rule 16b-3, such provision or Option shall be construed or deemed amended to
conform to Rule 16b-3.
Additional Plan Provisions, if required:
In addition, until such time as the Plan has been approved by
a majority of the votes cast at a meeting of shareholders (other than votes
attaching to securities beneficially owned by (A) an insider (within the meaning
of the Securities Act (Ontario)) of the Company, other than a person who falls
within that definition solely by virtue of being a director or senior officer of
a subsidiary of the Company, and (B) an associate (within the meaning of the
Securities Act (Ontario)) of any person who is an insider by virtue of (A) above
(such persons herein referred to as "Insiders"):
37
(i) the number of Shares reserved for issuance pursuant to Options
granted to Insiders shall not exceed 10% of the number of
Shares outstanding at the time of the grant (on a non-diluted
basis), less the aggregate number of Shares reserved for
issuance under any other stock option, stock option plan,
employee stock purchase plan or any other compensation or
incentive mechanism involving the issuance or potential
issuance of Shares to one or more service providers, including
a share purchase from treasury that is financially assisted by
the Company by way of loan, guarantee or otherwise (a "Share
Compensation Arrangement") over the preceding one-year period;
(ii) the issuance to any one Insider and such Insider's Associates,
within a one-year period, of Shares on the exercise of Options
may not exceed 5% of the number of Shares outstanding at the
time of the grant (on a non-diluted basis), less the aggregate
number of Shares reserved for issuance under any other Share
Compensation Arrangement over the preceding one-year period;
and
(iii) the issuance to all Insiders, within a one-year period, of
Shares on the exercise of Options, may not exceed 10% of the
number of Shares outstanding at the time of the grant (on a
non-diluted basis) less the aggregate number of Shares
reserved for issuance under any other Share Compensation
Arrangement over the preceding one-year period.
38
EXHIBIT B
SPECIAL RESOLUTION OF THE SHAREHOLDERS
OF
THINKPATH.COM INC.
(the "Corporation")
RESOLVED THAT
RECITALS:
A. The Articles of the Corporation be amended as follows:
1. to provide that the name of the Corporation be changed from
Thinkpath.com Inc. to Thinkpath Inc.; and
2. to change the authorized share capital of the Corporation by
increasing the number of common shares that the Corporation is
authorized to issue from 15,000,000 to 30,000,000
B. any one officer or director of the Corporation is hereby authorized and
directed on behalf of the Corporation to deliver Articles of Amendment, in
duplicate, to the Director under the Business Corporations Act and to sign and
execute all documents and to do all things necessary or advisable in connection
with the foregoing; and
C. the board of directors of the Corporation is hereby authorized to revoke this
special resolution without further approval of the shareholders of the
Corporation at any time prior to the endorsement by the Director under the
Business Corporations Act, of a certificate of amendment of articles in respect
of the amendments referred to above.
39
EXHIBIT C
GENERAL PROXY - ANNUAL MEETING OF SHAREHOLDERS OF THINKPATH.COM INC.
The undersigned hereby appoints Declan A. French, with full power of
substitution, proxy to vote all of the shares of common stock of the undersigned
and with all of the powers the undersigned would possess if personally present,
at the Annual Meeting of Shareholders of Thinkpath.com Inc. (the "Company"), to
be held at the principal executive offices of the Company located at 55
University Avenue, Suite 505, Toronto, Ontario, on June 6, 2001 at 10:00 A.M.
local time and at all adjournments thereof, upon the matters specified below,
all as more fully described in the Proxy Statement dated May 21, 2001 and with
the discretionary powers upon all other matters which come before the meeting or
any adjournment thereof.
This Proxy is solicited on behalf of ThinkPath.com Inc.'s Board of Directors.
1. To elect 7 directors to hold office for the term of 1 year:
Declan A. French, Kelly Hankinson, John Dunne, Arthur S. Marcus,
Ronan McGrath, Joel Schoenfeld, Robert Escobio
_____ FOR ALL NOMINESS _____WITHHELD FOR ALL NOMINEES
INSTRUCTION: To withhold authority to vote for any individual director
nominee, strike that director nominee's name in the list provided
above.
2. To ratify the appointment of Schwartz, Levitsky, Feldman, llp, as the
Company's independent chartered accountants for the ensuing year:
_____ FOR _____AGAINST _____ABSTAIN
3. To adopt the Company's 2001 Stock Option Plan:
_____ FOR _____AGAINST _____ABSTAIN
4. To vote upon the proposal to change the corporate name of the Company
from Thinkpath.com Inc. to Thinkpath Inc.:
_____ FOR _____AGAINST _____ABSTAIN
5. To vote upon the proposal to amend the Company's Articles of
Organization to increase the authorized number of shares of the
Company's common stock from 15,000,000 to 30,000,000 shares.
_____ FOR _____AGAINST _____ABSTAIN
6. To ratify the issuance of more than 2,712,979 shares of the Company's
common stock, if necessary, upon: (i) the conversion of the Company's
Series C 7% Convertible Preferred Stock; and (ii) the exercise of
warrants.
_____ FOR _____AGAINST _____ABSTAIN
7. To ratify the issuance of more than 2,760,979 shares of the Company's
common stock, if necessary, upon the issuance of shares of the
Company's common stock and/or warrants pursuant to a contemplated
equity line of credit.
_____ FOR _____AGAINST _____ABSTAIN
8. In their discretion, upon such other matter or matters that may
properly come before the meeting, or any adjournments thereof.
(Continued and to be signed on the other side)
(Continued from other side)
Every properly signed proxy will be voted in accordance with the specifications
made thereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2, 3, 4, 5, 6, and 7.
The undersigned hereby acknowledges receipt of a copy of the accompanying Notice
of Annual Meeting and Proxy Statement and hereby revokes any proxy or proxies
heretofore given.
Please mark, date, sign and mail your proxy promptly in the envelope provided.
Date:________________________ , 2001
(Print name of Shareholder)
(Print name of Shareholder)
Signature
Signature
Number of Shares
Note: Please sign exactly as name appears in the Company's records. Joint owners
should each sign.