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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
GENERAL AMERICAN ROYALTY, INC.
(Name of Registrant as Specified in its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement if Other Than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1) Title of each class 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: _________.
4) Proposed maximum aggregate value of transaction:
--------------------.
5) Total fee paid: ____________________.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or Schedule and the date of its filing.
1) Amount Previously Paid: ________________________.
2) Form, Schedule or Registration Statement No.:
---------------------------.
3) Filing Party: _______________________________________.
4) Date filed: _________________________________________.
<PAGE>
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS AND
PROXY STATEMENT
Dear General American Royalty Shareholder:
On behalf of the Board of Directors and management of General American Royalty,
Inc., I am pleased to invite you to attend the 1998 Annual Meeting of
Shareholders. The meeting will be held at Royal Oaks Country Club, 7915
Greenville Avenue, Dallas, Texas, beginning at 4:00 P.M., local time, on
Wednesday, December 23, 1998. A copy of our Annual Report to Shareholders for
the fiscal year ended September 30, 1998 is enclosed.
The attached Notice of Annual Meeting and Proxy Statement describe the business
to be conducted at the meeting, including the election of four directors. During
the meeting, there will also be a report by management on the Company's
business, as well as a discussion period during which you will be able to ask
questions.
Whether or not you plan to attend in person, please mark your proxy in the space
provided. It is important that your shares be represented by a proxy, even if
you cannot be present. Take a moment now to sign, date and return your proxy in
the envelope provided. If you have multiple accounts and received more than one
set of this material, please be sure to return each proxy.
I look forward to greeting you at this year's Annual Meeting.
Sincerely,
Paul Goodman-Simpson
President
<PAGE>
General American Royalty, Inc.
5646 Milton Street, Suite 731
Dallas, Texas 75206
214-361-8535
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 23, 1998
TO OUR SHAREHOLDERS:
The 1998 Annual Meeting of Shareholders of General American Royalty, Inc. (the
"Company") will be held at the Royal Oaks Country Club, 7915 Greenville Avenue,
Dallas, Texas, on Wednesday, December 23, 1998, at 4:00 P.M., local time, for
the following purposes:
1. To amend the Certificate of Incorporation of the Company to change the
name of the corporation to "World CallNet, Inc."
2. To amend the Certificate of Incorporation of the Company to increase
its authorized capital (i) from 20 million shares of Common Stock (par
value $0.001) to 30 million shares of Common Stock (par value $0.001)
and (ii) from 5 million shares of Preferred Stock (par value $0.001) to
10 million shares of Preferred Stock (par value $0.001).
3. To approve the Company's 1998 Stock Option Plan.
4. To elect four directors to hold office until the next annual meeting of
the shareholders and until their respective successors shall have been
elected and qualified.
5. To transact such other business as may properly be brought before the
Annual Meeting or any adjournment thereof.
The Annual Meeting may be adjourned from time to time and, at any reconvened
meeting, action with respect to the matters specified in the notice may be taken
without further notice to the shareholders unless required by the Bylaws.
Shareholders of record of Common Stock at the close of business on November 16,
1998 are entitled to notice of, and to vote on all matters at, the Annual
Meeting. A list of such shareholders will be available for examination by any
shareholder for any purpose germane to the Annual Meeting, during normal
business hours, at the principal office of the Company, 5646 Milton Street,
Suite 731, Dallas, Texas, for a period of ten days prior to the Annual Meeting
and at the Annual Meeting.
BY THE ORDER OF THE BOARD OF DIRECTORS.
_______________________________________
Secretary
DATED: December ____, 1998
<PAGE>
PRELIMINARY COPIES
General American Royalty, Inc.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 23, 1998
The following information is furnished in connection with the 1998 Annual
Meeting of Shareholders of General American Royalty, Inc., a Delaware
corporation (the "Company"), which will be held on Wednesday, December 23, 1998,
at 4:00 P.M., local time, at the Royal Oaks Country Club, 7915 Greenville
Avenue, Dallas, Texas, and at any adjournment or adjournments thereof, and will
be mailed on or about December 12, 1998 to the holders of record of Common Stock
as of the record date.
The record date for determining shareholders entitled to notice of and to
vote at, the Annual Meeting has been fixed as the close of business on November
16, 1998. On that date, the Company had 7,433,333 shares of Common Stock
outstanding. Each outstanding share of Common Stock is entitled to one vote on
all matters presented at the Annual Meeting.
The enclosed proxy for the Annual Meeting is being solicited by the
Company's Board of Directors and is revocable at any time prior to the exercise
of the powers conferred thereby. The cost of the solicitation of proxies in the
enclosed form will be borne by the Company. In addition to the use of the mail,
proxies may be solicited by personal interview, telephone, or facsimile, and by
banks, brokerage houses and other institutions. Nominees or fiduciaries will be
requested to forward the solicitation material to their principals and to obtain
authorization for the execution of proxies. The Company will, upon request,
reimburse banks, brokerage houses and other institutions, nominees and
fiduciaries for their reasonable expenses in forwarding proxy material to their
principals.
Unless otherwise directed in the accompanying form of proxy, the persons
named therein will vote FOR the election of the four director nominees, FOR the
amendment to the Certificate of Incorporation of the Company to change its name
to "World CallNet, Inc.", FOR the amendment to the Certificate of Incorporation
of the Company to increase from 20 million to 30 million the authorized number
of shares of Common Stock and to increase from 5 million to 10 million the
authorized number of shares of Preferred Stock, and FOR the approval of the
Company's 1998 Stock Option Plan. Any shareholder returning the accompanying
proxy may revoke such proxy at any time prior to its exercise by (a) giving
written notice to the Company of such revocation, (b) voting in person at the
Annual Meeting or (c) executing and delivering to the Company a later dated
proxy. Written revocations and later dated proxies should be sent to General
American Royalty, Inc., 5646 Milton Street, Suite 731, Dallas, Texas 75206.
1
<PAGE>
ANNUAL REPORT
The Company's Annual Report to Shareholders covering the fiscal year ended
September 30, 1998 ("fiscal 1998"), including audited financial statements, is
enclosed. No part of the Annual Report is incorporated in this Proxy Statement
or is deemed to be a part of the material for the solicitation of proxies.
CHANGE IN CONTROL OF THE COMPANY
On October 9, 1998 the Company issued 5,500,000 of its shares of Common
Stock in exchange for all the outstanding shares of World Wide Communications
(Holdings) Ltd., a United Kingdom development-stage telecommunications company
based in London, England. See the Annual Report for a description of its
business. As a result of this acquisition for stock of the Company, the
stockholders of World Wide Communications (Holdings) Ltd. ("WWCH") became the
owners of 75 percent of all outstanding shares of stock of the Company. Control
of the Company passed to them. WWCH will be operated as a wholly-owned
subsidiary of the Company and, generally, WWCH directors and officers now occupy
similar positions with the Company.
PROPOSAL 1:
CHANGE OF CORPORATE NAME TO WORLD CALLNET, INC.
The Company proposes to change its corporate name to better reflect the
business it conducts. It no longer is engaged in the business of acquiring oil
and gas royalty and mineral interests. It is a developer of new products and
services that offer access to the internet through television-based instruments.
See the Annual Report that accompanies this Proxy Statement for a fuller
description of the Company's new business.
PROPOSAL 2:
INCREASE IN AUTHORIZED CAPITAL STOCK
The Company proposes to increase its authorized capital stock from 20
million shares of Common Stock to 30 million shares of Common Stock and from 5
million shares of Preferred Stock to 10 million shares of Preferred Stock. The
Company is now engaged in a business that involves both the internet and
telecommunications. Both of these industries are developing rapidly with
innovations occurring rapidly. The Company could at some time desire to acquire
another company that owns intellectual property rights or has developed a
product compatible with the Company's growth. Further, the Company could propose
to raise capital for its business in amounts that require more shares than would
be available, as authorized but unissued, should the present capitalization not
be increased. It could be inconvenient or even fatal, particularly in the
instance of an acquisition, if the Company first had to call a stockholders'
meeting and amend its
2
<PAGE>
certificate of incorporation before it could assure an acquisition candidate
that the Company has sufficient authorized but unissued stock to make the
acquisition.
PROPOSAL 3:
APPROVAL OF STOCK OPTION PLAN
The Company's Board of Directors proposes to offer employment incentives to
its officers and regular employees to encourage them to remain with the Company
and to increase the Company's productivity. Several of the officers and
employees that joined the Company, when it acquired WWCH, possess extraordinary
talents and inventiveness. Other, similarly gifted persons will be recruited to
join the Company. An excellent employment incentive is a stock option plan that
gives officers and employees a stake in the Company if the Company succeeds.
From time to time the Company may wish to contract for the consulting
services of professionals in fields of immediate but not permanent need of the
Company. It is frequently the case that these consulting professionals are aware
of the commercial value their services should be to the Company, and they seek
partial compensation for their services in the form of stock options.
The Board of Directors has adopted a 1998 Stock Option Plan for the above
purposes and submits the plan to the stockholders for their approval or
rejection.
Description of Plan.
-------------------
The Company's 1998 Stock Option Plan (the "Plan") enables the Board of
Directors or a committee designated by the Board (an "Option Committee") to
grant options to purchase up to 1,000,000 shares of Common Stock of the Company.
Options may be granted to officers, directors and employees of the Company or
any parent or subsidiary of the Company and to any consultant or advisor to the
Company or any parent or subsidiary of the Company.
Two types of options may be granted. "Incentive Stock Options" are options
granted to persons who are employees (including officers and directors if they
are employees) of the Company or any parent or subsidiary of the Company, which
options are intended to qualify as incentive stock options within the meaning of
Section 422 of the Internal Revenue Code. All other options are called
"Nonqualified Stock Options." The two types of options have different income tax
consequences for the grantees and for the Company (see below).
Options may be granted under the Plan at any exercise price, but options
intended to be Incentive Stock Options cannot be granted at an exercise price
less than the fair market value of the Company's Common Stock on the day the
options are granted.
3
<PAGE>
However, with respect to options granted to persons owning ten percent or more
of the voting shares of all classes of stock of the Company, the exercise price
of the options cannot be less than 110% of the market value of the Company's
Common Stock on the day the options are granted.
The Plan was adopted by the Board of Directors on November 16, 1998 and, if
approved by the Company's stockholders, shall terminate ten years after
adoption. Options granted under the Plan can be for any term not exceeding ten
years or, for persons owning ten percent or more of the voting shares of all
classes of stock of the Company at the time of a grant of options, for any
period not exceeding five years.
The market value of the 1,000,000 shares subject to the Plan was $2,937,500
on November 30, 1998. Options to purchase 100,000 shares of Common Stock of the
Company at $1.50 a share were granted under the Plan to James F. Smith, a
director and former president of the Company; and options to purchase 150,000
shares of Common Stock of the Company at $1.50 a share were granted under the
Plan to each of Paul Goodman-Simpson - chief executive officer of the Company
and managing director of the Company's wholly-owned subsidiary, World Wide
Communications (Holdings) Limited ("WWCH"); Aaron Goodman-Simpson - vice
president of the Company and Sales Director of WWCH; and Keith Goodyer - vice
president of the Company and Technical Director of WWCH. The options expire on
November 9, 2001. All four of these persons are directors of the Company and are
nominated to be directors of the Company during the next year.
Federal Income Tax Consequences
-------------------------------
Incentive Stock Options.
-----------------------
There are no federal income tax consequences, to either the Company or the
option grantee, on the date the options are granted.
On exercise, there are no federal income tax consequences to either the
Company or the grantee.
On the grantee's sale of the shares acquired through exercise, the Company
has no federal income tax consequences, and the grantee has reportable capital
gain income or loss.
Nonqualified Options.
--------------------
On the date the options are granted, there are no federal income tax
consequences unless the exercise price is so far below the market value of the
underlying shares that date that some part of the difference (the "spread") may
be deemed to be immediate compensation to the grantee. There is no Treasury
regulation that sets how far below market price this spread may be, but case law
and other precedents suggest that nonqualified options granted at no lower than
30% of market price will not be challenged by the Internal Revenue Service.
4
<PAGE>
To the extent that any portion of the spread is treated as compensation to
the grantee, the grantee realizes the receipt of ordinary income the day of the
grant, and the Company must reflect the payment of this compensation expense on
its books that date.
On exercise, the difference between the exercise price (as possibly
adjusted upward, for income tax purposes only, as described in the preceding
paragraph) and the market value of the shares acquired is treated as
compensation income to the option grantee and as compensation expense to the
Company.
On the grantee's sale of shares acquired through exercise, the Company has
no federal income tax consequences, and the grantee has reportable capital gain
income or loss on the difference between the sale proceeds and the market value
of the shares on the day of exercise of the options.
Payment for Stock Upon Exercise of Options.
------------------------------------------
Grantees pay for stock upon exercise of options granted under the Plan by
certified or cashier's check. However, in the discretion of the Board of
Directors, or an Option Committee, payment may be made by any of the following:
o check,
o promissory note,
o retention by the Company, from the shares of stock subject to
an exercise of an option, of that number of shares whose value
is equal to the total exercise price amount, valued at the
market price of the stock on the day of exercise, or
o other shares of the Company's capital stock, valued at their
fair market value on the date of surrender, provided such
stock has been held by the grantee for more than six months
(in the case of stock acquired by the grantee through exercise
of an option granted under the Plan) or such surrendered stock
was not acquired directly or indirectly from the Company.
Termination of Options.
----------------------
Unexercised options granted under the Plan terminate at the earlier to
occur of the following:
o their expiration date,
o twelve months after the death or total and permanent
disability of a grantee, but only to the extent the options
were exercisable on the death or the termination of employment
or of status as a non-employee officer, director, advisor or
consultant (in the case of nonqualified options, this
twelve-month period can be
5
<PAGE>
extended by the Board of Directors or the Option
Committee), or
o 90 days after any other termination of employment or status as
a non-employee officer, director, advisor or consultant, but
only to the extent the options were exercisable on the date of
such termination (in the case of nonqualified options, this
90-day period can be extended by the Board of Directors or the
Option Committee).
PROPOSAL 4:
ELECTION OF DIRECTORS
The Board of Directors of the Company, pursuant to the provisions of the
Company's Certificate of Incorporation and Bylaws, has established a four-member
Board of Directors and has nominated all of the current four directors for
re-election by the shareholders at the Annual Meeting. If elected, the director
nominees will hold office until the next annual shareholders' meeting and until
their successors are duly elected and qualified.
The Company's Board of Directors meets periodically upon call by the
President or any Board member. During fiscal 1998, it met eleven times. All
directors attended at least 75% of the meetings of the Board of Directors. All
of the nominees for reelection named below have indicated their intent to serve
if elected. If any nominee for a position on the Board of Directors of the
Company is unable to stand for election for any reason, the proxy holders named
in the proxy are expected to vote for the substitute nominee in that position
designated by the Board of Directors or, if one is not so designated, are
expected to consult with the Board of Directors of the Company in determining
how to vote the shares they represent.
Nominees.
--------
The nominees for election as directors of the Company are as follows:
Director
Name and Age Since
------------ --------
James F. Smith, 62 1995
Paul Goodman-Simpson, 41 1998
Aaron Goodman-Simpson, 37 1998
Keith Goodyer, 31 1998
The following is certain biographical information relating to each
nominee-director:
James F. Smith was president of the Company from 1995 until October 9,
1998, when the Company acquired all the capital stock of WWCH. Prior to joining
the Company in 1995, Mr. Smith was active in the oil and gas business and had
been a founder and executive
6
<PAGE>
officer of three public companies that were engaged in the oil and gas business.
Paul Goodman-Simpson is the president of the Company and a managing
director and a co-founder in 1997 of WWCH, which became a wholly-owned
subsidiary of the Company on October 9, 1998. From 1993 to 1997 he was the
managing director of KORE Ltd., a computer software distribution company. From
1992 to 1997 he was Director of Sales (Far East Asia) of International Software
Systems, Inc., a software company. From 1985 to 1991 he was a salesman for two
other software companies.
Aaron Goodman-Simpson has been the vice president for operations and sales
of the Company since October 9, 1998, when the Company acquired all the capital
stock of WWCH. He joined WWCH in 1997 as its sales director and vice president
for operations. He serves, and has served since 1994, as the sales director of
KORE Ltd., a computer software distribution company. From 1992 until October
1994 he was the business development manager for Computer 2000 Datech Ltd.,
Europe's largest computer peripheral distributor. From 1986 until 1992 he was a
director of A & B Developments Ltd., a construction company to which Mr.
Goodman-Simpson introduced computer-aided design to its practice.
Keith Goodyer is a vice president of the Company and the technical director
and a co-founder in 1997 of WWCH, which became a wholly-owned subsidiary of the
Company on October 9, 1998. He manages WWCH's research and development facility
in Newport Pagnell, England. From 1979 until co-founding WWCH, he was an
independent internet consultant and developer. He developed several new consumer
electronics and internet tools including the Company's TelEmail and MailTV
products. From 1992 to April 1997 Mr. Goodyer was Internet Appliance Product
Manager of MSU Corporation, a public company that designs internet appliances,
and led a development team that produced the first Set-Top-Box for connecting
television sets to the internet.
Committees.
----------
The Board of Directors has no committees. For nominating directors, the
entire Board performs this function and evaluates and recommends nominees for
election to the Board of Directors.
Director Compensation.
---------------------
Directors of the Company receive no compensation for their services as
directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of November 16, 1998 by (i) each
nominee for election as a director, (ii) the Company's former and present chief
executive officers, (iii) all executive officers and directors of the Company as
a
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<PAGE>
group, and (iv) all those known by the Company to be beneficial owners of more
than five percent of the Company's Common Stock.
<TABLE>
<CAPTION>
Beneficial Ownership
-----------------------------------
Number of Percentage
Beneficial Owner Shares(1) of Class
---------------- --------- ----------
Directors and certain executive officers:
<S> <C> <C>
James F. Smith 234,000(2) 3.1%
Paul Goodman-Simpson(3) 535,000(4) 7.2%
Aaron Goodman-Simpson(3) 315,000(4) 4.2%
Keith Goodyer 287,500(4) 3.9%
All directors and executive 1,371,500 18.5%
officers as a group (four
persons)
</TABLE>
(1) This table is based upon information supplied by officers,
directors and principal shareholders and applicable
Schedules 13D and 13G filed with the Securities and Exchange
Commission. Unless otherwise indicated in the footnotes to
this table and subject to community property laws where
applicable, the Company believes that each of the shareholders
named in this table has sole voting and investment power with
respect to the shares indicated as beneficially owned. The
percentage of ownership for each person is calculated in
accordance with rules of the Securities and Exchange
Commission without regard to shares of Common Stock issuable
upon exercise of outstanding stock options, except that any
shares a person is deemed to own by having a right to acquire
them within 60 days by exercise of an option are considered
outstanding solely for purposes of calculating such person's
percentage ownership.
(2) Includes 105,000 shares held of record by Sammie S. Smith, Mr. Smith's
spouse. Mr. Smith disavows any beneficial interest in these 105,000
shares. Also includes 100,000 shares subject to being acquired within
60 days at $1.50 a share pursuant to a stock option granted by the
Company.
(3) Paul Goodman-Simpson and Aaron Goodman-Simpson are brothers.
(4) Includes 150,000 shares subject to being acquired within 60 days at
$1.50 a share pursuant to a stock option granted by the Company.
8
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, officers and persons who beneficially own more than ten percent of
the Company's Common Stock to file with the Securities and Exchange Commission
and the American Stock Exchange initial reports of ownership and reports of
changes in ownership of Common Stock of the Company. Officers, directors and
greater than ten percent beneficial owners are required by regulation to furnish
to the Company copies of all Section 16(a) reports they file. Based solely on
review of the copies of such reports furnished to the Company and written
representations that no other reports were required during fiscal 1998, to the
Company's knowledge, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners during fiscal
1998 were complied with on a timely basis, except for the following.
<TABLE>
<CAPTION>
Number of Number of
Name Late Reports(1) Transactions(1)
---- --------------- ---------------
<S> <C> <C>
Paul Goodman-Simpson 1 1
Aaron Goodman-Simpson 1 1
Keith Goodyer 1 1
James F. Smith 2 2
Douglas Weedon 2 2
George E. Green 2 2
Sam E. Nicholson 2 2
</TABLE>
(1) In October 1998 the Company changed its fiscal year from
October 31 to September 30. This table reflects some Forms 3
and 4 filings required by acts or events that occurred in
October 1998 before the change in fiscal year-end to
September 30 was approved by the board of directors.
OFFICER COMPENSATION AND OTHER INFORMATION
Officers.
--------
The officers of the Company are as follows:
Name Principal Position
---- ------------------
Paul Goodman-Simpson President and Chief Executive
Officer
Aaron Goodman-Simpson Vice President
Keith Goodyer Vice President
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<PAGE>
The officers of the Company are elected by the Board of Directors and serve
at its discretion. For biographical information concerning Paul Goodman-Simpson,
Aaron Goodman-Simpson and Keith Goodyer, see "Election of Directors - Nominees."
Compensation.
------------
The following table sets forth information with respect to the chief
executive officer of the Company for fiscal 1998 ("named executive officers"):
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
-------------------
Fiscal
Name and Year All Other
Principal Position Ended Salary(1) Compensation
------------------ ------ --------- ------------
<S> <C> <C> <C>
James F. Smith, Chief 1998 $12,000 $3,000
Executive Officer 1997 $30,000 $ 0
</TABLE>
(1) Personal benefits provided by the Company to the named executive
officers do not exceed ten percent of the total annual salary and bonus
reported for the named executive officer and are not included in this
total.
Option Grants in Fiscal 1998.
----------------------------
The following table provides information with respect to the named
executive officer who received and fully exercised a grant of option in fiscal
1998.
<TABLE>
<CAPTION>
Option Grants and Exercises in Last Fiscal Year
-----------------------------------------------
Percent of
Total
Number of Options
Shares Granted to Market Value
Underlying Employees Price on Realized
Options in Fiscal Exercise Date of on
Name Granted Year Price Grant Exercise
---- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
James F. Smith 7,000(1) 33.3% $0.01 $1.00 $7,368
</TABLE>
(1) The options were granted on August 28, 1998 and were exercised on September
25, 1998 when the market price of the stock was $1.06.
Employment Agreements.
----------------------
The Company has employment agreements with Paul Gordon-Simpson, Aaron
Goodman-Simpson and Keith Goodyer. Each is employed for a term to end September
30, 2001 at an annual salary of (pound)65,000 (approximately $107,000) plus an
automobile allowance of (pound)7,500 (approximately $12,350).
10
<PAGE>
VOTING
The election of each director at the Annual Meeting will be by plurality
vote. Voting on the proposal to amend the Company's Certificate of Incorporation
to change its name to "World CallNet, Inc.," the proposal to amend the
Certificate of Incorporation to increase the authorized capital of the Company,
the proposal to approve the Stock Option Plan and any other matters properly
brought before the Annual Meeting will be decided by a majority of the votes
cast on the matter, unless otherwise required by law.
The office of the Company's Secretary appoints an inspector of election to
tabulate all votes and to certify the results of all matters voted upon at the
Annual Meeting. Neither the corporate law of the State of Delaware, the state in
which the Company is incorporated, nor the Company's Certificate of
Incorporation or Bylaws, have any specific provisions regarding the treatment of
abstentions and broker non-votes. It is the Company's policy to count
abstentions or broker non-votes for the purpose of determining the presence of a
quorum at the meeting. Abstentions will be treated as shares represented at the
Annual Meeting for determining results on actions requiring a majority vote but
will not be considered in determining results of plurality votes. Shares
represented by proxies returned by brokers where the broker's discretionary
authority is limited by stock exchange rules will be treated as represented at
the Annual Meeting only as to such matter or matters voted on in the proxy.
Shares represented by limited proxies will be treated as represented at the
meeting only as to such matter or matters for which authority is granted in the
limited proxy.
Because directors are elected by a plurality vote rather than a majority of
the shares entitled to vote or a majority of the shares present in person or
represented by proxy at the Annual Meeting, proxies marked "withhold authority"
with respect to any one or more nominees will not affect the outcome of the
nominee's election unless the nominee receives no affirmative votes or unless
other candidates are nominated for election as directors.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche to serve as the
Company's independent certified public accountants for the fiscal year ending
September 30, 1999. It was the auditor of the accounts of WWWC, a wholly-owned
subsidiary of the Company acquired on October 9, 1998. Representatives of
Deloitte & Touche are not expected to be present at the Annual Meeting but have
the opportunity to come and to make a statement if they desire to do so, but
unless they come they will not be available to respond to appropriate questions.
11
<PAGE>
Deloitte & Touche replaces the Company's former auditors, Hein +
Associates, L.L.P., only because the nature of the business of the Company has
changed - as described in the accompanying Annual Report to Stockholders. The
activities of WWWC, a London, England-based wholly-owned subsidiary of the
Company, and its subsidiaries became, on October 9, 1998, the dominant
activities of the Company. The directors of the Company determined that it is in
the best interests of the Company to remain with Deloitte & Touche, because of
its familiarity with the London operations, rather than with Hein + Associates,
L.L.P., whose familiarity was with the Dallas, Texas discontinued oil and gas
operations of the Company.
Hein + Associates' report on the Company's financial statements for the
1997 fiscal year and Coopers & Lybrand's report on the Company's financial
statements for the 1996 fiscal year did not contain any adverse opinion or
disclaimer of opinion, nor were they modified as to uncertainty, audit scope, or
accounting principles. There were no disagreements either with Hein + Associates
or Coopers & Lybrand, whether or not resolved, on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure which, if not resolved to its satisfaction, would have caused it to
make reference to the subject matter of the disagreements in connection with its
reports.
PROPOSALS OF SHAREHOLDERS
The Board of Directors will consider proposals of shareholders intended to
be presented for action at the Annual Meeting of Shareholders. According to the
rules of the Securities and Exchange Commission, such proposals shall be
included in the Company's Proxy Statement if they are received in a timely
manner and if certain requirements are met. For a shareholder proposal to be
included in the Company's Proxy Statement relating to the 1999 Annual
Shareholders' Meeting, a written proposal complying with the requirements
established by the Securities and Exchange Commission must be received at the
Company's principal executive offices located at Suite 731, Meadows Building,
5646 Milton Street, Dallas, Texas 75206 no later than October 31, 1999.
OTHER MATTERS
The Company does not know of any matters to be presented for action at the
meeting other than those listed in the Notice of Meeting and referred to herein.
If any other matters properly come before the Annual Meeting, it is intended
that the proxy solicited hereby will be voted in accordance with the
recommendation of the Board of Directors.
Copies of the Annual Report of General American Royalty, Inc. to the
Securities and Exchange Commission on Form 10-KSB may be obtained, without
charge to shareholders, by writing General American Royalty, Inc., Suite 731,
Meadows Building, 5646 Milton Street, Dallas, Texas 75206.
12
<PAGE>
PRELIMINARY COPIES
PROXY
General American Royalty, Inc.
5646 Milton Street, Suite 731
Dallas, Texas 75206
214-361-8535
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF GENERAL AMERICAN
ROYALTY, INC. EACH MATTER TO BE ACTED UPON IS PROPOSED BY THE COMPANY.
The undersigned hereby appoints James F. Smith, Paul Goodman-Simpson, Keith
Goodyear and Sam E. Nicholson, or any one of them, each with the power to
appoint his substitute, as proxies, and hereby appoints and authorizes them to
represent and vote as designated below, all the shares of Common Stock, held of
record by the undersigned on November 16, 1998, at the Annual Meeting of
Shareholders of General American Royalty, Inc. (the "Company") to be held at the
Royal Oaks Country Club, 7915 Greenville Avenue, Dallas, Texas, on Wednesday,
December 23, 1998, at 4:00 P.M., local time, and at any adjournment thereof.
1. AMENDMENT TO CERTIFICATE OF INCORPORATION OF THE COMPANY TO
CHANGE THE NAME OF THE CORPORATION TO "WORLD CALLNET, INC."
[ ] APPROVE [ ] DISAPPROVE [ ] ABSTAIN
2. AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE THE COMPANY'S
AUTHORIZED CAPITAL FROM 20 MILLION TO 30 MILLION SHARES OF COMMON STOCK
(PAR VALUE $0.001) AND FROM 5 MILLION TO 10 MILLION SHARES OF PREFERRED
STOCK (PAR VALUE $0.001)
[ ] APPROVE [ ] DISAPPROVE [ ] ABSTAIN
3. APPROVAL OF THE COMPANY'S 1998 STOCK OPTION PLAN
[ ] APPROVE [ ] DISAPPROVE [ ] ABSTAIN
4. ELECTION OF DIRECTORS
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
listed below (except for to vote for all nominees below
the nominee(s) lined out
below)
Proxy
Page 1 of 2 Pages
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James F. Smith
Paul Goodman-Simpson
Aaron Goodman-Simpson
Keith Goodyer
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
[ ] APPROVE [ ] DISAPPROVE [ ] ABSTAIN
IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS PROXY SHALL BE
VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS. THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE NOMINEES LISTED IN ITEM 3, FOR THE CHANGE OF CORPORATE NAME, AND FOR THE
APPROVAL OF THE COMPANY'S STOCK OPTION PLAN.
Please sign exactly as your name appears below. When shares are held as
joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee, or guardian, please give full titles as such. If a
corporation, please sign full corporate name by President or other authorized
officer. If a partnership, please sign partnership name by authorized person. If
a limited liability company, please sign name by authorized person.
DATE: ____________________, 1998 ______________________________
Signature
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
Proxy
Page 2 of 2 Pages
