SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
Proxy Statement Pursuant To Section 14(a)
Of The Securities Exchange Act Of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, Use of the Commission Only (as permitted by Rule
14a-6(e)(2))Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
Capita Research Group, Inc.
----------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
N/A
----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
CAPITA RESEARCH GROUP, INC.
--------------------------------------------------------------------------------
Notice of Annual Meeting of Stockholders to be held August 3, 2000.
--------------
Blue Bell, Pennsylvania
July 3, 2000
To the Holders of Common Stock
of CAPITA RESEARCH GROUP, INC.:
The Annual Meeting of the Stockholders of CAPITA RESEARCH GROUP, INC. will be
held at the Double Tree Guest Suites, 640 West Germantown Pike, Plymouth
Meeting, PA 19462 on Thursday, August 3, 2000 at 4:30 P.M., local time, for the
following purposes, as more fully described in the accompanying Proxy Statement:
1. To elect directors of the Company for the ensuing year.
2. To consider and take action upon a proposal to ratify the Board of
Directors' adoption of the Capita Research Group 2000 Stock Option
Plan.
3. To consider and take action upon a proposal to ratify the Board of
Directors' selection of Rudolph, Palitz, LLC to serve as the Company's
independent auditors for the Company's fiscal year ending December 31,
2000.
4. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on July 3, 2000 as the
record date for the determination of stockholders entitled to notice of, and to
vote at, the Meeting.
By Order of the Board of Directors,
By: /s/ Millard E. Tydings
--------------------------
Millard E. Tydings, II Secretary
You are cordially invited to attend the Meeting in person. If you do not expect
to be present, please mark, sign and date the enclosed form of Proxy and mail it
in the enclosed return envelope.
1
<PAGE>
PROXY STATEMENT
This Proxy Statement, which will be mailed commencing on or about July 3, 2000
to the persons entitled to receive the accompanying Notice of Annual Meeting of
Stockholders, is provided in connection with the solicitation of Proxies on
behalf of the Board of Directors of Capita Research Group, Inc. (the "Company")
for use at the Annual Meeting of Stockholders (the "Meeting") to be held on
August 3, 2000, and at any adjournment or adjournments thereof, for the purposes
set forth in such Notice. The Company's executive office is located at 591
Skippack Pike, Suite 300, Blue Bell, Pennsylvania 19422.
Any Proxy may be revoked at any time before it is exercised. The casting of a
ballot at the Meeting by a stockholder who may theretofore have given a Proxy or
the subsequent delivery of a Proxy will have the effect of revoking the initial
Proxy.
At the close of business on July 3, 2000, the record date stated in the
accompanying Notice, the Company had 24,251,187 outstanding shares of common
stock, $.001 par value ("Common Stock"), each of which is entitled to one vote
with respect to each matter to be voted on at the Meeting. The Company has no
class or series of stock outstanding other than the Common Stock.
Directors are elected by plurality vote. Adoption of proposals 2 and 3 will
require the affirmative vote of a majority of the shares of Common Stock present
and voting thereon at the Meeting. Abstentions and broker non-votes (as
hereinafter defined) will be counted as present for the purpose of determining
the presence of a quorum. For the purpose of determining the vote required for
approval of matters to be voted on at the Meeting, shares held by stockholders
who abstain from voting will be treated as being "present" and "entitled to
vote" on the matter and, thus, an abstention has the same legal effect as a vote
against the matter. However, in the case of a broker non-vote or where a
stockholder withholds authority from his proxy to vote the proxy as to a
particular matter, such shares will not be treated as "present" and "entitled to
vote" on the matter and, thus, a broker non-vote or the withholding of a proxy's
authority will have no effect on the outcome of the vote on the matter. A
"broker non-vote" refers to shares of Common Stock represented at the Meeting in
person or by proxy by a broker or nominee where such broker or nominee (i) has
not received voting instructions on a particular matter from the beneficial
owners or persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on such matter.
I. ELECTION OF DIRECTORS
Five directors will be elected at the Annual Meeting of Stockholders to be held
on August 3, 2000, each to serve until the 2001 Annual Meeting of Stockholders
and until a successor shall have been chosen and qualified. It is the intention
of each of the persons named in the accompanying form of Proxy to vote the
shares of Common Stock represented thereby in favor of the nominees listed in
the following table, unless otherwise instructed in such Proxy. All of such
nominees are presently serving as directors. In case any of the nominees is
unable or declines to serve, such persons reserve the right to vote the shares
of Common Stock represented by such Proxy for another person duly nominated by
the Board of Directors in such nominee's stead. The Board of Directors has no
reason to believe that the nominees named will be unable or will decline to
serve.
Certain information concerning the nominees for election as directors is set
forth below. Such information was furnished by them to the Company.
2
<PAGE>
<TABLE>
<CAPTION>
Shares of Common
Stock Owned Beneficially
Name and Certain Biographical Information as of July 3, 2000 Percent of Class
----------------------------------------- ------------------ ----------------
<S> <C> <C>
DAVID HUNTER, age 46, has been Chairman of the Board 2,994,727 12.35%
and Chief Executive Officer since January 1998. He
has been with the Company since 1995 as General
Manager and Director. Mr. Hunter has been
responsible for designing, deploying, financing and
marketing the Engagement (SM) Testing System since
its inception, and originated, negotiated and closed
the Company's licensing agreement with the National
Aeronautics and Space Administration ("NASA"). From
1989 to 1995 Mr. Hunter was an independent money
manager. From 1981 to 1989 he was a Vice
President with Tucker Anthony Incorporated, W.H.
Newbold's Son & Co. and Piper Jaffray Inc. Prior to
that, Mr. Hunter was an actuarial consultant
with a major pension actuarial firm. Mr. Hunter
graduated from Temple University with a B.S. degree
in Accounting in 1980.
RALPH ANGLIN, age 74, Director, has been a Director 2,785,686 (1) 11.49%
of the Company since November 1998. Currently Mr.
Anglin is an active consultant with PRA
Development and Management Corporation. From 1980 to
1985 he was the President of Robb Cape Inc. Mr.
Anglin is a graduate of the Massachusetts
Institute of Technology with a B.S. in civil
engineering in 1953.
TOMAS STENSTROM, age 28, Executive Vice President, 800,000 3.30%
Chief Technology Officer, and Director, has been
associated with the Company since August 1997. From
1992 to 1998 he owned and operated a
computer-consulting firm providing hardware support,
applications training, and software programming and
development. From 1997 to 1998 he was employed by
Prescient Systems as an Oracle Database Administrator
and a Graphic User Interface (GUI) developer. From
1994 to 1997 he worked for IntelliPro as an
Applications Engineer developing educational
multimedia software for both the desktop PC and the
Internet. He received a B.S. in Mechanical -
Aerospace Engineering from Rutgers University in 1994.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Shares of Common
Stock Owned Beneficially
Name and Certain Biographical Information as of July 3, 2000 Percent of Class
----------------------------------------- ------------------ ----------------
<S> <C> <C>
ANDREW BECK, age 52, new addition as a Director. Mr. 260,000 (2) 1.07%
Beck is a member of the Executive Committee of the
international law firm of Torys, specializing in
securities and transactional corporate law as a
partner in the New York City office. Mr. Beck is a
graduate of Stanford Law School in 1972, and received
a BA in economics from Carleton College in 1969.
MILLARD E. TYDINGS II, age 41, has 100,000 0.41%
been a Director of
the Company since September 1996. Currently an
independent financial consultant and mergers and
acquisitions specialist, Mr. Tydings was formerly a
marketing representative with the United States
Chamber of Commerce from 1992 to 1994. He received a
B.A. from Johns Hopkins University in 1992.
</TABLE>
(1) Included in Mr. Anglin's shareholdings are 76,010 shares owned by his
profit-sharing plan and 902,000 shares owned by his personal IRA.
(2) Shares are held by Torys, a law firm of which Mr. Beck is a partner.
Mr. Beck disclaims beneficial ownership of such shares.
During the fiscal year ended December 31, 1999 the Board of Directors of the
Company met four times. Each of the persons named in the table above attended at
least 75% of the meetings of the Board of Directors, which were held during the
time that such person served.
The Board will have a Compensation Committee. The members of the Compensation
Committee will be Ralph Anglin, who will serve as Chairman, and Millard Tydings.
The Compensation Committee will make recommendations to the full Board as to
compensation of senior management and will determine the executives who are to
receive options and the number of shares subject to each option. The
Compensation Committee will meet not less than once every calendar year.
The Board has an Audit Committee. The members of the Audit Committee are Ralph
Anglin, Chairman, and Millard Tydings. The Audit Committee meets at least once
per year in advance of the Annual Meeting of Stockholders of the Company with
the Company's independent auditors. The Audit Committee acts as a liaison
between the Board and the independent auditors and annually recommends to the
Board the appointment of the independent auditors. The Audit Committee reviews
with the independent auditors the planning and scope of the audits of the
financial statements, the results of those audits and the adequacy of the
Company's internal accounting controls.
The directors and officers of the Company, other than Messrs. Tydings, Beck, and
Anglin, are active in its business on a day-to-day basis. No family
relationships exist between any of the directors and officers of the Company.
4
<PAGE>
The Company's Certificate of Incorporation contains a provision, authorized by
Nevada law, which eliminates the personal liability of a director of the Company
to the Company or to any of its stockholders for monetary damages for a breach
of his fiduciary duty as a director, except in the case where the director
breached his duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or knowingly violated a law, authorized the payment of a
dividend or approved a stock repurchase in violation of Nevada corporate law, or
obtained an improper personal benefit.
Compensation of Executive Officers
The following table sets forth information for the fiscal years ended December
31, 1999, 1998 and 1997 concerning the compensation paid or awarded to the
Chairman and Chief Executive Officer of the Company. No executive officer of the
Company received fiscal 1999 salary and bonus compensation which exceeded
$100,000. The Company's outside Directors will receive $1,250 per meeting for
their services as such and reimbursement for any expenses they may incur in
connection with their services as directors.
SUMMARY COMPENSATION TABLE
David B. Hunter, Chairman and Chief Executive Officer.
================================================================================
Fiscal Year Salary Other Annual Long term
Compensation Compensation
Awards-Options
--------------------------------------------------------------------------------
1999 $61,731 $0 0
--------------------------------------------------------------------------------
1998 $55,385 $0 0
--------------------------------------------------------------------------------
1997 $24,000 $0 0
================================================================================
Option Disclosure
No stock options were granted to or exercised or held by the executive officers
named in the Summary Compensation Table during the fiscal year ended December
31, 1999.
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 and executive officers, and persons who own more than ten percent of
the Company's Common Stock, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of Common
Stock. Officers, directors and greater than ten percent stockholders are
required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and representations that no other reports were
required, during the fiscal year ended December 31, 1999, all Section 16(a)
reports applicable to its current officers, directors and greater than ten
percent beneficial owners were filed in a timely manner.
5
<PAGE>
Certain Relationships and Related Transactions
In October of 1996, Media Solutions, a predecessor of the Company, entered into
a $100,000 bridge loan agreement with Margaret W. Long, one of its shareholders.
Under the terms of the agreement, the company utilized borrowed funds to satisfy
near term working capital obligations. Management believed that repayment would
come both from anticipated system sales and from proceeds of an offering of
equity securities to outside investors. This loan was converted by mutual
agreement into common stock, including all accrued interest, in July 1999, at
the rate of $.25 per share, retiring the loan to Ms. Long in its entirety.
From 1998 to 2000, we issued common stock to Torys, our securities law firm, in
lieu of cash for services rendered in the aggregate amount of $97,031 or 260,000
shares of Capita common stock, at conversion prices ranging from $.25 to $.89
per share.
During 1999, we issued 191,340 shares of common stock at $.25 per share to
William Hummel, a former Director, as prepaid rent on office space that we lease
and office equipment.
In January 1999, we issued 84,000 shares of common stock at $.25 per share to
Ralph Anglin, a Director, in return for various office furniture and fixtures at
a fair market value of $21,000. In December 1999, Mr. Anglin loaned us
$24,167.35 to cover temporary working capital needs. This loan was repaid in
January 2000.
In June 1999, we issued 3,350,273 shares of common stock to officers and
directors in exchange for notes receivable totaling $837,568.25, at the rate of
$.25 per share.
In August 1999, we issued a bridge loan note totaling $400,000 to James R.
Salim, convertible into our common stock at the rate of $.25 per share, and
300,000 warrants exercisable for the purchase of 300,000 shares of common stock
at an exercise price of $.25 per share. In May 2000, the promissory note was
converted into 1,600,000 shares of common stock. In June 2000, the same
stockholder exercised his 300,000 stock warrants into common stock for an
aggregate purchase price of $75,000
In June 2000, we issued to James R. Salim a $600,000 convertible promissory
note, convertible into up to 1,000,000 shares of our common stock at a price of
$.60 per share, and warrants to purchase up to 1,000,000 shares of our common
stock at a price of $.60 per share.
6
<PAGE>
Information Concerning Certain Stockholders
The shareholdings of the persons who, to the knowledge of the Board of Directors
of the Company, owned beneficially more than five percent of any class of the
outstanding voting securities of the Company as of July 3, 2000, and all
directors and executive officers of the Company as a group, and their respective
shareholdings as of such date (according to information furnished by them to the
Company), are set forth in the following table. Except as indicated in the
footnotes to the table, all of such shares are owned with sole voting and
investment power.
================================================================================
Number of
Shares Current
Name Owned Percentage
--------------------------------------------------------------------------------
David B. Hunter (1) 2,994,727 12.35%
591 Skippack Pike, Suite 300
Blue Bell, PA 19422
--------------------------------------------------------------------------------
Ralph Anglin (2) (3) 2,785,686 11.49%
111 S. Independence Mall E., Suite 100
Philadelphia, PA 19106
--------------------------------------------------------------------------------
SoundShore Holdings Ltd. (5)
c/o AIG International Management 2,000,250 7.82%
Company, Inc.
1281 East Main Street
Stamford, Connecticut 06902
--------------------------------------------------------------------------------
James R. Salim (4) 5,067,000 19.30%
3510 Turtle Creek Boulevard, #2D
Dallas, TX 75219
--------------------------------------------------------------------------------
Michael Kline 1,295,432 5.34%
P.O. Box 314
Sharon, CT 06069
--------------------------------------------------------------------------------
All Executive Officers and 7,260,413 29.94%
Directors as a Group
================================================================================
(1) Officer and Director.
(2) Director only.
(3) Included in Mr. Anglin's shareholdings are 76,010 shares owned by his
profit-sharing plan and 902,000 shares owned by his personal IRA.
(4) Included in Mr. Salim's shareholdings are 1,000,000 shares issuable
upon the conversion of his convertible promissory note and 1,000,000
shares issuable upon the exercise of his warrants.
(5) Included in SoundShore Holdings Ltd.'s shareholdings are 1,333,500
shares issuable upon the exercise of its warrants.
7
<PAGE>
II. APPROVAL OF THE CAPITA RESEARCH GROUP 2000 STOCK OPTION PLAN
There will be presented to stockholders at the Meeting a proposal to adopt the
Capita Research Group 2000 Stock Option Plan (the "Stock Option Plan"). The
following discussion of the material features of the Stock Option Plan is
qualified by reference to the text of the Stock Option Plan as proposed to be
adopted and as filed as Exhibit A to this Proxy Statement. Under the 2000 Stock
Option Plan, options to purchase up to an aggregate of 1,000,000 shares of
Common Stock may be granted. In addition, there are approximately 1,000,000
shares remaining from the 1999 Stock Option Plan. This stock may be granted to
key employees of the Company or its subsidiaries, and to officers and directors
of the Company.
The Compensation Committee of the Board of Directors will administer the Stock
Option Plan and determine the persons who are to receive options and the number
of shares of Common Stock to be subject to each option. In selecting individuals
for options and determining the terms thereof, the Compensation Committee may
consider any factors it deems relevant including present and potential
contributions to the success of the Company. Options granted under the Stock
Option Plan must be exercised within a period fixed by the Compensation
Committee, which may not exceed ten years from the date of the option or, in the
case of incentive stock options granted to any holder on the date of grant of
more than ten percent of the total combined voting power of all classes of stock
of the Company, five years from the date of grant of the option. Options may be
made exercisable in whole or in installments, as determined by the Compensation
Committee.
Options may not be transferred other than by will or the laws of descent and
distribution and during the lifetime of an optionee may be exercised only by the
optionee or, if approved by the Compensation Committee, or transferred to
immediate family members or charitable organizations. The per share exercise
price may not be less than the per share market value of the Common Stock on the
date of grant of the option. In the case of incentive stock options granted to
any holders on the date of grant of more than ten percent of the total combined
voting power of all classes of stock of the Company and its subsidiaries, the
exercise price may not be less than 110% of the market value per share of the
Common Stock on the date of grant. Unless designated as "incentive stock
options" intended to qualify under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), options which are granted under the Stock Option
Plan are intended to be "nonstatutory stock options." The exercise price may be
paid in cash, shares of Common Stock owned by the optionee, or in a combination
of cash and shares.
The Stock Option Plan provides that the maximum number of shares of Common
Stock, which may be subject to options granted to any person during any fiscal
year of the Company, is 1,000,000 shares.
The Stock Option Plan provides that, in the event of changes in the corporate
structure of the Company or certain events affecting the Common Stock, the
Compensation Committee may, in its discretion, make adjustments with respect to
the number of shares which may be issued under the Stock Option Plan or which
are covered by outstanding options, in the exercise price per share, or both.
The Compensation Committee may in its discretion provide that, in connection
with any merger or consolidation in which the Company is not the surviving
corporation or any sale or transfer by the Company of all or substantially all
its assets or any tender offer or exchange offer for or the acquisition,
directly or indirectly, by any person or group of all or a majority of the then
outstanding voting securities of the Company, outstanding options under the
Stock Option Plan will become exercisable in full or in part, notwithstanding
any other provision of the Stock Option Plan or of any outstanding options
granted thereunder, on and after (i) 15 days prior to the effective date of such
merger, consolidation, sale, transfer or acquisition or (ii) the date of
commencement of such tender offer or exchange offer, as the case may be.
8
<PAGE>
For federal income tax purposes, an optionee will not recognize any income upon
the grant of a non-qualified or incentive stock option. Upon the exercise of a
non-qualified option, the optionee will realize ordinary income equal to the
excess (if any) of the fair market value of the shares purchased upon such
exercise over the exercise price. The Company will be entitled to a deduction
from income in the same amount and at the same time as the optionee realizes
such income. Upon the sale of shares purchased upon such exercise, the optionee
will realize capital gain or loss measured by the difference between the amount
realized on the sale and the fair market value of the shares at the time of
exercise of the option. In the case of options granted to executive and other
principal officers, directors and greater than 10% stockholders of the Company,
income will be recognized upon exercise of a non-qualified option only if the
option has been held for at least six months prior to exercise. If such option
is exercised within six months after the date of grant, an officer, director or
greater than 10% stockholder will recognize income on the date six months after
the date of grant, unless he or she files an election under Section 83(b) of the
Code to be taxed on the date of exercise.
In contrast, an optionee will not be taxed upon exercise of an incentive stock
option and the Company will not be entitled to a deduction from income in
respect thereof. If the optionee retains the shares transferred to him upon
exercise of an incentive stock option for more than one year after the date of
issuance of the stock and two years after the date of grant of the option, any
gain or loss realized on a subsequent sale of the shares by the optionee will be
treated as long-term capital gain or loss. If, on the other hand, the optionee
sells the shares within one year after the date of transfer or two years after
the date of grant of the option, the optionee will realize ordinary income, and
the Company will be entitled to a deduction from income, to the extent of the
excess of the value of the shares on the date of exercise or the amount realized
on the sale (whichever is less) over the exercise price. Any excess of the sale
price over the value of the shares on the date of exercise will be treated as
capital gain. The spread between the fair market value of the shares on the date
of exercise and the exercise price constitutes an item of tax preference for
purpose of the alternative minimum tax, which, under certain circumstances,
could cause tax liability as a result of the exercise.
The Board believes that the future success of the Company depends upon
attracting and retaining the most qualified management and employees, and the
Stock Option Plan will assist the Company in attracting and retaining persons of
superior ability and inspiring their efforts on behalf of the Company. The Board
believes that the adoption of the Stock Option Plan is in the best interests of
the Company.
The Board believes that the proposed Stock Option Plan will be advantageous to
the Company and its stockholders. The Stock Option Plan has been adopted by the
Board, subject to stockholder approval. The Stock Option Plan will not become
effective unless approved by the holders of a majority of the shares of Common
Stock present and voting thereon at the Meeting (at which a quorum is present);
provided that the total votes cast represent more than 50% of the total
outstanding shares of Common Stock as of July 3, 2000. The Board recommends that
the stockholders vote FOR the adoption of the Stock Option Plan. It is the
intention of the persons named in the accompanying form of proxy to vote the
shares represented thereby in favor of adoption of the Stock Option Plan unless
otherwise instructed therein.
9
<PAGE>
III. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Company has selected Rudolph, Palitz, LLC to serve
as independent auditors for the Company for the fiscal year ending December 31,
2000. The Board of Directors considers Rudolph, Palitz, LLC to be eminently
qualified.
Although it is not required to do so, the Board of Directors is submitting its
selection of the Company's auditors for ratification at the Meeting, in order to
ascertain the views of stockholders regarding such selection. If the selection
is not ratified, the Board of Directors will reconsider its selection.
The Board of Directors recommends that stockholders vote FOR ratification of the
selection of Rudolph, Palitz, LLC to examine the financial statements of the
Company for the Company's fiscal year ending December 31, 2000. It is the
intention of the persons named in the accompanying form of Proxy to vote the
shares of Common Stock represented thereby in favor of such ratification unless
otherwise instructed in such Proxy.
A representative of Rudolph, Palitz, LLC will be present at the Meeting, with
the opportunity to make a statement if such representative desires to do so, and
will be available to respond to appropriate questions.
IV. OTHER MATTERS
The Board of Directors of the Company does not know of any other matters, which
may be brought before the Meeting. However, if any such other matters are
properly presented for action, it is the intention of the persons named in the
accompanying form of Proxy to vote the shares represented thereby in accordance
with their judgment on such matters.
V. MISCELLANEOUS
If the accompanying form of Proxy is executed and returned, the shares of Common
Stock represented thereby will be voted in accordance with the terms of the
Proxy, unless the Proxy is revoked. If no directions are indicated in such
Proxy, the shares represented thereby will be voted IN FAVOR of the nominees
proposed by the Board of Directors in the election of directors and FOR the
adoption of the Stock Option Plan and the ratification of the Board of
Directors' selection of independent auditors for the Company.
All costs relating to the solicitation of Proxies will be borne by the Company.
Proxies may be solicited by officers, directors and regular employees of the
Company personally, by mail or by telephone or telegraph, and the Company may
pay brokers and other persons holding shares of stock in their names or those of
their nominees for their reasonable expenses in sending soliciting material to
their principals.
It is important that Proxies be returned promptly. Stockholders who do not
expect to attend the Meeting in person are urged to mark, sign and date the
accompanying form of Proxy and mail it in the enclosed return envelope.
Stockholder Proposals
---------------------
The Company must receive stockholder proposals intended to be presented at the
2001 Annual Meeting of Stockholders of the Company by March 5, 2001 in order to
be considered for inclusion in the Company's Proxy Statement relating to such
Meeting. In the event that a stockholder fails to notify the Company by May 18,
2001 of an intent to be present at the Company's 2001 Annual Meeting of
Stockholders in order to present a proposal for a vote, the Company will have
the right to exercise its discretionary authority to vote against the proposal,
if presented, without including any information about the proposal in its proxy
materials.
10
<PAGE>
Annual Report on Form 10-KSB
----------------------------
A copy of the Company's Annual Report on Form 10-KSB, including the financial
statements and financial statement schedules for the fiscal year ended December
31, 1999, which has been filed with the Securities and Exchange Commission, is
being included with the mailing of this Proxy Statement.
Blue Bell, Pennsylvania
July 3, 2000
11
<PAGE>
EXHIBIT A
CAPITA RESEARCH GROUP, INC.
2000 STOCK OPTION PLAN
1. PURPOSES OF PLAN. The purposes of this Plan, which shall be known as the
Capita Research Group, Inc. 2000 Stock Option Plan and is hereinafter referred
to as the "Plan", are (i) to provide incentives for key employees, directors,
consultants and other individuals providing services to CAPITA RESEARCH GROUP,
INC., (the "Company") and its subsidiary or parent corporations (within the
respective meanings of Sections 424(f) and 424(e) of the Internal Revenue Code
of 1986, as amended (the "Code"), and referred to herein as "Subsidiary" and
"Parent", respectively, and such Parent and each Subsidiary are referred to
herein individually as an "Affiliate" and collectively as "Affiliates") by
encouraging their ownership of the common stock, $.001 par value, of the Company
(the "Stock") and (ii) to aid the Company in retaining such key employees,
directors, consultants and other individuals upon whose efforts the Company's
success and future growth depends and in attracting other such employees,
directors, consultants and individuals.
2. ADMINISTRATON. The Plan shall be administered by the Compensation Committee
of the Board of Directors or a subcommittee of the Compensation Committee
appointed by the Compensation Committee, as hereinafter provided (the committee
or subcommittee administering the Plan is hereinafter referred to as the
"Committee"). For purposes of administration, the Committee, subject to the
terms of the Plan, shall have plenary authority to establish such rules and
regulations, to make such determinations and interpretations, and to take such
other administrative actions as it deems necessary or advisable. All
determinations and interpretations made by the Committee shall be final,
conclusive and binding on all persons, including Optionees (as hereinafter
defined) and their legal representatives and beneficiaries.
The Committee shall consist of not fewer than two members of the Board of
Directors. Unless otherwise determined by the Board of Directors, all members of
the Board of Directors who serve on the Committee shall be "Non-Employee
Directors" (as defined in Rule 16b-3 under the Securities Exchange Act of 1934,
as amended) and "outside directors" as defined in Treasury Regulation
ss.1.162-27(e)(3). The Compensation Committee shall designate one of the members
of the Committee as its Chairman. The Committee shall hold its meetings at such
times and places as it may determine. A majority of its members shall constitute
a quorum. All determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and signed by all
members shall be as effective as if it had been made by a majority vote at a
meeting duly called and held. The Committee may appoint a secretary (who need
not be a member of the Committee). No member of the Committee shall be liable
for any act or omission with respect to his service on the Committee if he acts
in good faith and in a manner he reasonably believes to be in or not opposed to
the best interests of the Company.
3. STOCK AVAILABLE FOR OPTIONS. There shall be available for options under the
Plan a total of 1,000,000 shares of Stock, subject to any adjustments, which may
be made pursuant to Section 5(f) hereof. Shares of Stock used for purposes of
the Plan may be either authorized or unissued shares, or previously issued
shares held in the treasury of the Company, or both. Shares of Stock covered by
options, which have terminated or expired prior to exercise, shall be available
for further options hereunder. The maximum number of options, which may be
granted to any person under the Plan during any fiscal year of the Company,
shall not exceed 1,000,000 shares.
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4. ELIGIBILITY. Options under the Plan may be granted to key employees of the
Company or any Affiliate, including officers or directors of the Company or any
Affiliate, and to consultants and other individuals providing services to the
Company or any Affiliate (each such grantee, an "Optionee"). Options may be
granted to eligible individuals whether or not they hold or have held options
previously granted under the Plan or otherwise granted or assumed by the
Company. In selecting individuals for options, the Committee may take into
consideration any factors it may deem relevant, including its estimate of the
individual's present and potential contributions to the success of the Company
and its Affiliates. Service as an employee, director, officer or consultant of
or to the Company or any Affiliate shall be considered employment for purposes
of the Plan (and the period of such service shall be considered the period of
employment for purposes of Section 5(d) of this Plan); provided, however, that
incentive stock options may be granted under the Plan only to an individual who
is an "employee" (as such term is used in Section 422 of the Code) of the
Company or any Affiliate.
5. TERMS AND CONDITIONS OF OPTIONS. The Committee shall, in its discretion,
prescribe the terms and conditions of the options to be granted hereunder, which
terms and conditions need not be the same in each case, subject to the
following:
(a) Option Price. The price at which each share of Stock covered by an
option granted under the Plan may be purchased shall not be less than the Market
Value (as defined in Section 5(c) hereof) per share of Stock on the date of
grant of the option. The date of the grant of an option shall be the date
specified by the Committee in its grant of the option.
(b) Option Period. The period for exercise of an option shall in no
event be more than ten years from the date of grant, or in the case of any
option intended to be an incentive stock option granted to an individual owning,
on the date of grant, stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company of any Parent or Subsidiary,
more than five years from the date of grant. Options may, in the discretion of
the Committee, be made exercisable in installments during the option period. Any
shares not purchased on any applicable installment date may be purchased
thereafter at any time before the expiration of the option period.
(c) Exercise of Options. In order to exercise an option, the Optionee
shall deliver to the Company written notice specifying the number of shares of
Stock to be purchased, together with cash or a certified or bank cashier's check
payable to the order of the Company in the full amount of the purchase price
therefore; provided that, for the purpose of assisting an Optionee to exercise
an option, the Company may make loans to the Optionee or guarantee loans made by
third parties to the Optionee, on such terms and conditions as the Board of
Directors may authorize; and provided further that such purchase price may be
paid in shares of Stock owned by the Optionee having an aggregate Market Value
on the date of exercise equal to the aggregate purchase price, or in a
combination of cash and Stock. For purposes of the Plan, the Market Value per
share of Stock shall be the last sale price regular way on the date of
reference, or, in case no sale takes place on such date, the average of the
closing high bid and low asked prices regular way, in either case on the
principal national securities exchange on which the Stock is listed or admitted
to trading, or if the Stock is not listed or admitted to trading on any national
securities exchange, the last sale price reported on the National Market System
of the National Association of Securities Dealers Automated Quotation System
("NASDAQ") on such date, or the last sale price reported on the NASDAQ SmallCap
Market on such date, or the average of the closing high bid and low asked prices
in the over-the-counter market on such date, whichever is applicable, or if
there are no such prices reported on NASDAQ or in the over-the-counter market on
such date, as furnished to the Committee by any New York Stock Exchange member
selected from time to time by the Committee for such purpose. If there is no bid
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or asked price reported on any such date, the Market Value shall be determined
by the Committee in accordance with the regulations promulgated under Section
2031 of the Code, or by any other appropriate method selected by the Committee.
If the Optionee so requests, shares of Stock purchased upon exercise of an
option may be issued in the name of the Optionee or another person. An Optionee
shall have none of the rights of a stockholder until the shares of Stock are
issued to him.
(d) Effect of Termination of Employment. An option may not be exercised
after the Optionee has ceased to be in the employ of the Company or any
Affiliate, except in the following circumstances:
(i) If the Optionee's employment is terminated by action of
the Company or an Affiliate, or by reason of disability or retirement
under any retirement plan maintained by the Company of any Affiliate,
the option may be exercised by the Optionee within three months after
such termination, but only as to any shares exercisable on the date the
Optionee's employment so terminates;
(ii) In the event of the death of the Optionee during the three
month period after termination of employment covered by (i) above, the
person or persons to whom his rights are transferred by will or the
laws of descent and distribution shall have a period of one year from
the date of his death to exercise any options which were exercisable by
the Optionee at the time of his death; and
(iii) In the event of the death of the Optionee while employed,
the option shall thereupon become exercisable in full, and the person
or persons to whom the Optionee's rights are transferred by will or the
laws of descent and distribution shall have a period of one year from
the date of the Optionee's death to exercise such option. The
provisions of the foregoing sentence shall apply to any outstanding
options which are incentive stock options to the extent permitted by
Section 422(d) of the Code and such outstanding options in excess
thereof shall, immediately upon the occurrence of the event described
in the preceding sentence, be treated for all purposes of the Plan as
nonstatutory stock options and shall be immediately exercisable as such
as provided in the foregoing sentence.
In no event shall any option be exercisable more than ten years from the date of
grant thereof. Nothing in the Plan or in any option granted pursuant to the Plan
(in the absence of an express provision to the contrary) shall confer on any
individual any right to continue in the employ of the Company or any Affiliate
or interfere in any way with the right of the Company or any Affiliate to
terminate his employment at any time.
(e) Limitation on Transferability of Options. Except as provided in the
Section 5(e), during the lifetime of an Optionee, options held by such Optionee
shall be exercisable only by him and no option shall be transferable other than
by will or the laws of descent and distribution. The Committee may, in its
discretion, provide that during the lifetime of an Optionee, options held by
such Optionee may be transferred to or for the benefit of a member of his
immediate family or to a charitable organization exempt from income tax under
Section 501(c)(3) of the Code. For purposes hereof, the term " immediate family"
of an Optionee shall mean such Optionee's spouse and children (both natural and
adoptive), and the direct lineal descendants of his children.
(f) Adjustments for Change in Stock Subject to Plan. In the event of a
reorganization, recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation, rights offering, or any other change in the
corporate structure of shares of the Company, the Committee shall make such
adjustments, if any, as it deems appropriate in the number and kind of shares
subject to the Plan, in the number and kind of shares covered by outstanding
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<PAGE>
options, or in the option price per share, or both, and, in the case of a
merger, consolidation or other transaction pursuant to which the Company is not
the surviving corporation or pursuant to which the holders of outstanding Stock
shall receive in exchange therefore shares of capital stock of the surviving
corporation or another corporation, the Committee may require an Optionee to
exchange options granted under the Plan for options issued by the surviving
corporation or such other corporation.
(g) Acceleration of Exercisability of Options Upon Occurrence of
Certain Events. The Committee may, in its discretion provide in the case of any
option granted under the Plan that, in connection with any merger or
consolidation which results in the holders of the outstanding voting securities
of the Company (determined immediately prior to such merger or consolidation)
owning less than a majority of the outstanding voting securities of the
surviving corporation (determined immediately following such merger or
consolidation), or any sale of transfer by the Company of all or substantially
all its assets or any tender offer or exchange offer for or the acquisition,
directly or indirectly, by any person or group of all or a majority of the then
outstanding voting securities of the Company, such option shall become
exercisable in full or part, notwithstanding any other provision of the Plan or
of any outstanding options granted thereunder, on and after (i) the fifteenth
day prior to the effective date of such merger, consolidation, sale, transfer or
acquisition or (ii) the date of commencement of such tender offer or exchange
offer, as the case may be. The provisions of the foregoing sentence shall apply
to any outstanding options which are incentive stock options to the extent
permitted by Section 422(d) of the Code and such outstanding options in excess
thereof shall, immediately upon the occurrence of the event described in clause
(i) or (ii) of the foregoing sentence, be treated for all purposes of the plan
as nonstatutory stock options and shall be immediately exercisable as such as
provided in the foregoing sentence. Notwithstanding the foregoing, in no event
shall any option be exercisable after the date of termination of the exercise
period of such option specified in Sections 5(b) and 5(d).
(h) Registration, Listing and Qualification of Shares of Stock. Each
option shall be subject to the requirement that if at any time the Board of
Directors shall determine that the registration, listing or qualification of the
shares of Stock covered thereby upon any securities exchange or under any
federal or state law, or the consent or approval of any governmental regulatory
body is necessary or desirable as a condition of, or in connection with, the
granting of such option or the purchase of shares of Stock thereunder, no such
option may be exercised unless and until such registration, listing,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors. The Company may require
that any person exercising an option shall make such representations and
agreements and furnish such information as it deems appropriate to assure
compliance with the foregoing or any other applicable legal requirement.
(i) Other Terms and Conditions. The Committee may impose such other
terms and conditions, not inconsistent with the terms hereof, on the grant or
exercise of options, as it deems advisable.
6. Additional Provisions Applicable to Incentive Stock Options. The Committee
may, in its discretion, grant options under the Plan to eligible employees which
constitute "incentive stock options" within the meaning of Section 422 of the
Code; provided, however, that (a) the aggregate Market Value of the Stock with
respect to which incentive stock options are exercisable for the first time by
the Optionee during any calendar year shall not exceed the limitation set forth
in Section 422(d) of the Code;(b) if the Optionee owns on the date of grant
securities possessing more than 10% of the total combined voting power of all
classes of securities of the Company or of any Affiliate, the price per share
shall not be less than 110% of the Market Value per share on the date of grant
and (c) Section 5(d)(ii) hereof shall not apply to any incentive stock option.
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<PAGE>
7. Amendment and Termination. Unless the Plan shall theretofore have been
terminated as hereinafter provided, the Plan shall terminate on, and no option
shall be granted hereunder after December 31, 2009; provided, however, that the
Board of Directors may at any time prior to that date terminate the Plan. The
Board of Directors may at any time amend the Plan or any outstanding options. No
termination or amendment of the Plan may, without the consent of an Optionee,
adversely affect the rights of such Optionee under any option held by such
Optionee.
8. Stockholder Approval of Plan. The establishment of the Plan shall be subject
to approval by a majority of the votes cast thereon by the stockholders of the
Company at a meeting of stockholders duly called and held for such purpose or by
a method and in a degree that would be treated as adequate under the applicable
law of the Company's state of incorporation, and no option granted hereunder
shall be exercisable prior to such approval.
9. Withholding. It shall be a condition to the obligation of the Company to
issue shares of Stock upon exercise of an option, that the Optionee (or any
beneficiary, transferee or person entitled to act under Sections 5(d) or 5(e)
hereof) pay to the Company, upon its demand, such amount as may be requested by
the Company for the purpose of satisfying any liability to withhold federal,
state or local income or other taxes. If the amount requested is not paid, the
Company may refuse to issue such shares of Stock.
10. Issuance of Certificates; Legends. The Company may endorse such legend or
legends upon the certificates for shares of Stock issued upon the exercise of an
option granted hereunder and may issue such "stop transfer" instructions to its
transfer agent in respect of such shares as, in its absolute discretion, it
determines to be necessary or appropriate.
11. Other Actions. Nothing contained in this Plan shall be construed to limit
the authority of the Company to exercise its corporate rights and powers,
including but not by way of limitation, the right of the Company to grant or
assume options for proper corporate purposes other than under the Plan with
respect to any employee or other person, firm, corporation or association.
Dated: July 3, 2000
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CAPITA RESEARCH GROUP, INC.
PROXY-Annual Meeting of Stockholders-August 3, 2000
The undersigned, a stockholder of CAPITA RESEARCH GROUP, INC., does
hereby appoint DAVID B. HUNTER and TOMAS STENSTROM, or either of them, his
proxies, with full power of substitution or resubstitution, to appear and vote
all shares of Common Stock of the Company which the undersigned is entitled to
vote at the Annual Meeting of Stockholders to be held on Thursday, August 3,
2000, at 4:30 P.M., local time, or at any adjournment thereof, upon such matters
as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby instructs said proxies or their substitutes
to vote as specified below on each of the following matters and in accordance
with their judgment on any other matters which may properly come before the
Meeting.
1. Election of Directors, [ ] WITHHOLD AUTHORITY [ ]
FOR all nominees listed below to vote for all nominees
(except as noted to the contrary below) listed below
David B. Hunter, Tomas Stenstrom, Millard E. Tydings II,
Ralph Anglin, Andrew Beck
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
-----------------------------------------
2. Approval of adoption of the Company's 2000 Stock Option Plan
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Ratification of appointment of Rudolph Palitz LLC as independent auditors for
the fiscal year ending December 31, 2000.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
The Board of Directors favors a vote "FOR" each item.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS INDICATED, THEY WILL BE VOTED IN FAVOR OF THE ITEM(S) FOR WHICH NO DIRECTION
IS INDICATED.
IMPORTANT: Before returning this Proxy, please sign your name or names on the
line(s) below exactly as shown thereon. Executors, administrators, trustees,
guardians or corporate officers should indicate their full titles when signing.
Where shares are registered in the name of joint tenants or trustees, each joint
tenant or trustee should sign.
Dated: , 2000
--------------------------------
(L.S.)
--------------------------------------
(L.S.)
--------------------------------------
Stockholder(s) sign here
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
