<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934.
Filed by the Registrant [ x ] Filed by Party other than the
Registrant [ ]
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only [as permitted by
Rule 14a-6(e)(2)]
[ x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
---------------------------------------------------------------------
VERIDA INTERNET CORP.
(Exact name of Registrant as specified in its charter.)
Commission File number 000-25757
---------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):
[ x ] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(1)
and O-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 O-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 O-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> 2
VERIDA INTERNET CORP.
50 California Street, Suite 1500
San Francisco, California
94111
(415) 464-8600
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 30, 2000
To the Stockholders of VERIDA INTERNET CORP.:
Notice is hereby given that the Annual Meeting of Stockholders of
Verida Internet Corp. (the "Company") will be held on Friday, June 30,
2000 at 50 California Street, Suite 1500, San Francisco, CA, 94111 at
10:00 A.M., Pacific Daylight Time, to consider and act upon the following
matters, all as more fully described in the accompanying Proxy Statement
which is incorporated herein by this reference:
1. the election of three (3) directors to serve until the next annual
meeting of the Company's stockholders and until their successors
have been elected and qualify;
2. a proposal to ratify the appointment of independent public
accountants for the Company's current fiscal year; and
3. such other business as may properly come before the Annual Meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on May 1,
2000 as the record date for the determination of stockholders entitled to
notice of, and to vote at the Annual Meeting and at any adjournments
thereof. All stockholders are cordially invited to attend the Annual
Meeting but only stockholders of record are entitled to notice of and to
vote at the Annual Meeting. A list of such stockholders will be available
for inspection at the Company's principal executive office during
ordinary business hours for a ten-day period prior to the Annual Meeting.
Whether or not you expect to be present at the meeting, it is
important that you complete, sign and date the enclosed proxy card as
promptly as possible and return it in the enclosed envelope. No postage
is required for mailing in the United States. This will ensure a quorum
at the Meeting and avoid additional expense to the Company for further
solicitation. In the event you are able to attend the meeting, you may
revoke your proxy and vote your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
"Michael Hinshaw"
Michael Hinshaw
President and Chief Executive Officer of the Company
June 13, 2000
San Francisco, California
<PAGE> 3
VERIDA INTERNET CORP.
50 California Street, Suite 1500
San Francisco, California 94111
----------------------------------------------
PROXY STATEMENT
---------------------------------------------
Approximate date proxy material first sent
to stockholders: June 13, 2000
---------------------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Verida Internet Corp. (the "Board"),
a Nevada Corporation ("Verida" or the "Company"), for use at the Annual
Meeting of Stockholders of the Company to be held on June 30, 2000 at
10:00 a.m. Pacific Daylight Time, at 50 California Street, Suite 1500,
San Francisco, CA 94111 and at any and all adjournments thereof (the
"Meeting"), for the purposes stated in the Notice of Annual Meeting of
Stockholders preceding this Proxy Statement.
SOLICITATION AND REVOCATION OF PROXIES
A form of proxy is being furnished herewith by the Company to each
stockholder of record on May 1, 2000 (the "Record Date"), and in each
case, is solicited on behalf of the Board of Directors of the Company for
use at the Meeting. The entire cost of soliciting these proxies will be
borne by the Company. The Company may pay persons holding shares in
their names or the names of their nominees for the benefit of others,
such as brokerage firms, banks, depositaries, and other fiduciaries, for
reasonable costs incurred in forwarding soliciting materials to their
principals. Members of the management of the Company may also solicit
some stockholders in person, or by mail, telephone, telegraph or
facsimile, following solicitation by this Proxy Statement, but will not
be separately compensated for such solicitation services.
Proxies duly executed and returned by stockholders and received by the
Company before the Meeting, unless a contrary choice is specified in the
proxy, will be voted: (i) "FOR" the election of all three nominee-
directors specified herein (ii) "FOR" the ratification and appointment of
Telford Sadovnick, PLLC., independent public accountants, as the auditors
of the Company for the fiscal year ending December 31, 2000 and (iii) at
the discretion of the proxy holders, on any matter that may come before
the meeting or any adjournment thereof.
Where a specification is indicated as provided in the proxy, the shares
represented by the proxy will be voted and cast in accordance with the
specification made. As to other matters, if any, to be voted upon, the
persons designated as proxies will take such actions as they, in their
discretion, may deem advisable.
Shares represented by proxies that reflect abstentions or "broker non-
votes" (i.e., shares held by a broker or nominee which are represented
at the meeting, but with respect to which such broker or nominee is not
empowered to vote on a particular proposal) will be
<PAGE> 4
counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. Abstentions and broker non-
votes, however, will be treated as not voted for purposes of
determining approval of the proposals described herein and will not be
counted as votes for or against such proposal.
The persons named as proxies were selected by the Board of Directors of
the Company and each of them is a director and/or executive officer of
the Company. Stockholders who execute proxies for the Meeting may revoke
their proxies at any time prior to their exercise by delivering written
notice of revocation to the Company, by delivering a duly executed proxy
bearing a later date, or by attending the meeting and voting in person.
QUORUM AND VOTING
At the close of business on the Record Date, there were 9,545,808 shares
of $.00001 par value common stock (the "Common Stock") of the Company
outstanding and entitled to vote at the Meeting.
The presence, in person or by proxy, of the holders of a majority of the
outstanding Common Stock is necessary to constitute a quorum at the
Meeting and to permit action to be taken by the stockholders at such
Meeting. In considering matters which may properly come before the
Meeting, each holder of Common Stock is entitled to one vote, in person
or by proxy, for each share held in his or her name on the Record Date.
A plurality of the votes cast at the Meeting is required to elect each
nominee as a Director. Unless authority to vote for any of the nominees
named in this Proxy Statement is withheld, the shares represented by the
enclosed proxy will be voted FOR the election as Directors of such
nominees.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes set forth as of the Record Date, the number
of shares of the Company's Common Stock beneficially owned by (i) each
person who served as the Company's Chief Executive Officer during the
1999 fiscal year, (ii) the highest compensated executive officers who
were serving as executive officers at the end of the 1999 fiscal year
whose individual total cash compensation for the 1999 fiscal year
exceeded $100,000 (the "Named Executive Officers"), (iii) each director
and nominee for director of the Company, (iv) all executive officers and
directors of the Company as a group and (v) each person or group of
persons known by the Company to beneficially own more than five percent
(5%) of the outstanding Common Stock. All information is taken from or
based upon information provided by such persons to the Company or
available through public filings by the beneficial owner.
<PAGE> 5
Stock Options
Convertible
Amount Percent into Shares at
and Nature of of Class May 1, 2000 or
Name and Address of Beneficial Beneficially within 60 Days
Beneficial Owner Ownership [2] Owned [2] Thereafter[3]
Officers and directors [1]
Michael Hinshaw 2,550,000 25.6% 400,000
Richard Cohn 100,000 1.0% 100,000
Henry Corona 300,000 3.0% 300,000
Steven Zimmerman 100,000 [4] 1.0% 75,000
David Zimmerman 37,500 [4] .4% 12,500
Jason Fuchs 53,000 .6% 53,000
Mark Katsumata 12,500 .1% 12,500
c/o 1200, 1090 West
Pender Street
Vancouver, B.C. Canada
Bernhard Zinkhofer 210,000 2.2% nil
c/o 1500, 1055 West Georgia
Street
Vancouver, B.C. Canada
Peter Rantucci 37,500 .4% 37,500
c/o 1200, 1090 West
Pender Street
Vancouver, B.C. Canada
All Officers and 3,375,500 [5] 32.0% [5] 990,500
Directors as a
Group (9 Persons)
5% Stockholders:
Alex Guidi 3,026,000 31.7% Nil
c/o 1200, 1090 West
Pender Street
Vancouver, B.C. Canada
Brad Holland 793,533 8.3% Nil
P. O. Box 2314
Dhahran, Saudi Arabia
Peter Loretto
c/o 350, 6165 Hwy 17 524,900 5.5% Nil
Trans-Orient Petroleum 657,142 [6] 6.9% Nil
1200, 1090 West
Pender Street
Vancouver, B.C. Canada
<PAGE> 6
[1] Unless otherwise indicated, address of record is 50 California
Street, Suite 1500, San Francisco, California 94111.
[2] Beneficial ownership is determined in accordance with the rules of
the Commission, and generally includes voting power and/or
investment power with respect to securities. Shares of Common Stock
subject to options exercisable at May1, 2000 or exercisable within
60 days thereafter are deemed outstanding for computing the
percentage of beneficial ownership for each person but are not
deemed outstanding for computing the percentage of any other person.
Except as indicated by footnote, the Company understands that the
persons named in the table above have sole voting and investment
power with respect to all shares of Common Stock shown as
beneficially owned by them.
[3] Listed amounts consist of shares subject to options that are
exercisable within 60 days of the Record Date. All share amounts
listed below are included in the calculation of beneficial ownership
of the listed person.
[4] Includes 25,000 shares issued to NetOpus Incorporated, a private
company owned and controlled by Steven and David Zimmerman.
[5] Includes stock options to purchase 990,500 shares of common stock
exercisable at May 1, 2000 or within 60 days thereafter.
[6] For purposes of reporting under Section 16, these securities have
been reported as part of Alex Guidi's indirect holdings. However,
Mr. Guidi disclaims beneficial ownership of these securities for
purposes of Section 16 or for any other purpose.
ELECTION OF DIRECTORS
The Company's directors are to be elected at each annual meeting of
stockholders. The three nominees for election as directors at this
Meeting set forth below are all recommended by the Board of Directors of
the Company and each is currently a director of the Company.
In the event that any of the nominees for director should become unable
to serve if elected, it is intended that shares represented by proxies
which are executed and returned will be voted for such substitute
nominee(s) as may be recommended by the Company's existing Board of
Directors.
The three nominee-directors receiving the highest number of votes cast at
the Meeting will be elected as the Company's directors to serve until the
next annual meeting of stockholders and until their successors are
elected and qualify.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
EACH NOMINEE FOR THE BOARD OF DIRECTORS.
<PAGE> 7
The following table sets forth certain information concerning the
nominees for election as directors (all of such nominees being continuing
members of the Company's present Board of Directors):
Nominee Principal Occupation Age
Michael Hinshaw President and Chief Executive Officer 38
of the Company
Bernhard Zinkhofer Lawyer, Partner in the law firm of Lang 45
Michener Lawrence & Shaw
Peter Rantucci Executive of DLJ Management Ltd., a 31
provider of administrative services to
public and private businesses
Mr. Michael Hinshaw was appointed to the position of President, Chief
Executive Officer and member of the Board of Directors on February 4,
1999. Mr. Hinshaw attended the University of San Francisco and the
Academy of Art College in San Francisco, receiving a Bachelor of Arts in
1985 and a Masters of Fine Arts in Graphic Design from the Academy in
1988. As President and CEO of Verida Internet Corp., Mr. Hinshaw has 15
years of strategic marketing, creative, and management experience. In
1985 Mr. Hinshaw co-founded advertising and corporate design firm
Hinshaw, Young & Partners in San Francisco. While there he developed
advertising, direct mail, marketing and branding programs for several
high-technology and financial service corporations including Apple
Computer, Wells Fargo Bank, GTE and Hitachi Data Systems. In 1989, Mr.
Hinshaw co-founded Resource Net, a San Francisco based company which was
founded to enable ad agencies and design firms to share management and
marketing knowledge and resources using the technology of the Internet
through an extensive corporate intranet and extranet. In 1994, Mr.
Hinshaw joined the San Francisco bay-area based Triad Inc., a strategic
marketing and communications company, to pursue the hands-on creation of
effective branding, advertising and design. As Co-Creative Director and
Vice President of the firm, he was responsible for both traditional and
Internet based marketing and business programs for clients including
Wells Fargo, Novell, Apple Computer and Household Credit Services. Mr.
Hinshaw became President of Triad Inc. in 1997 and as described herein,
sold Triad to Verida in October 1999.
Mr. Bernhard Zinkhofer has been a member of the Board of Directors since
February 4, 1999. Mr. Zinkhofer obtained a Bachelor of Commerce Degree
from the University of Calgary, Canada in 1977, became a member of the
Canadian Institute of Chartered Accountants in 1980 after articling with
a predecessor of KPMG Peat Marwick Thorne and obtained a Bachelor of Law
Degree from the University of Victoria in 1983. From 1983 to 1990, Mr.
Zinkhofer practiced law with a smaller law firm in Vancouver, British
Columbia, in the corporate and securities areas. In 1991 Mr. Zinkhofer
became an associate of, and in 1992 a partner of, the firm of Lang
Michener Lawrence & Shaw of Vancouver, B.C. where he continues to
practice law. Mr. Zinkhofer is also a director of the following Canadian
public companies: Trans-Orient Petroleum Ltd., Durum Cons. Energy Corp.,
Helijet Airways International Inc., Strategic Technologies Inc. and Foran
Mining Corporation.
<PAGE> 8
Mr. Peter Rantucci has been a member of the board of directors since
January 28, 1999. Mr. Rantucci received a Bachelor of Commerce Degree
(Honors) from the University of British Columbia in 1992 and a Bachelor
of Law Degree from the University of Manitoba in 1996. Mr. Rantucci began
his articles in July 1996 with a large law firm situated in Calgary,
Alberta called Milner Fenerty where he continued to practice commercial
and tax law until his departure in January 1998. Since January 1998 until
present Mr. Rantucci has been acting as executive for DLJ Management
Ltd., a private company providing administrative services to public and
private companies including Verida.
During the fiscal year ended December 31, 1999, there were twelve
meetings of the Board of Directors. All directors attended at least 75%
of the meetings of the Board and committees of the Board on which they
were members.
Committees of the Board of Directors
The Board has established an Audit Committee. The Audit Committee is
responsible for (i) reviewing the scope of, and the fees for the annual
audit, (ii) reviewing with the independent auditors the corporate
accounting practices and policies, (iii) reviewing with the independent
auditors their final report, and (iv) being available to the independent
auditors during the year for consultation purposes. The Audit Committee
consists of Michael Hinshaw, Bernhard Zinkhofer and Peter Rantucci and
met four times during the fiscal year ended December 31, 1999.
The Company does not have a nominating committee of the Board of
Directors. The nominees for election as directors at the Meeting were
selected by the Board of Directors of the Company.
Director Compensation
Directors who are employees of the Company receive no additional
compensation for service on the Board of Directors. There was no standard
compensation arrangement for directors who are not full time employees
during the 1999 fiscal year. Mr. Rantucci was granted an option to
acquire up to 75,000 common shares of the Company's Common Stock
exercisable at $5.25 per share. The options are subject to the following
vesting schedule: 25% at 6 months from granting, 25% at 12 months from
granting, 25% at 24 months from granting and 25% at 36 months from
granting. Mr. Zinkhofer purchased 200,000 common shares of the Company
for total proceeds of $3,100. The closing market price at the time of
purchase was $0.25 per share.
<PAGE> 9
EXECUTIVE OFFICERS AND COMPENSATION
The following persons are the executive officers of the Company:
Name Age Position
Michael Hinshaw 38 Chief Executive Officer and President
Richard Cohn 48 Executive Vice President
Henry Corona 50 Chief Financial Officer
Stephen Zimmerman 35 Chief Technology Officer
David Zimmerman 28 Vice President - Engineering
Jason Fuchs 28 Chief Information Officer
Mark Katsumata 34 Corporate Secretary
Information concerning the business experience of Mr. Hinshaw is provided
under the section above entitled "Election of Directors."
Mr. Richard G. Cohn serves as Executive Vice President for the Company.
Mr. Cohn holds a Bachelor of Arts from the University of Pennsylvania and
a J.D. from Emory University. Mr. Cohn brings more than twenty years of
diverse communications experience to our company. From 1995 to 1998 Mr.
Cohn was Vice President, Communications Technology/Employee
Communications, with Charles Schwab & Co. in San Francisco, California.
At Charles Schwab & Co., Mr. Cohn spearheaded efforts to align a
geographically dispersed work force through Web technology. He also
directed a national series of town hall meetings featuring CEO Charles
Schwab launching the company's new strategic direction. From 1992 to
1995, Mr. Cohn was the Manager of Employee Communications with Sun
Microsystems, at their Mountain View California office. While at Sun
Microsystems Inc., Mr. Cohn helped pioneer online communications tools
such as desktop video-on-demand and Web-based audio programming. He also
directed global sensing efforts and managed communications campaigns
around the world for Sun Microsystems Inc. Prior to his technology
experience, Mr. Cohn served as a Senior Attorney for the Department of
Energy in both Washington and San Francisco from 1980 to 1984 and has
worked as a Legislative Assistant to the U.S. House of Representatives in
Washington, D.C. from 1977 to 1978.
Mr. Henry Corona was hired as the Company's Chief Financial Officer in
April 2000. He holds a MBA in finance from the University of Southern
California and an MA in economics from University of California, Los
Angeles. Mr. Corona has more than twenty years of senior financial
experience with a diverse industry background. Mr. Corona has acted as an
independent financial consultant since 1989 and has built a solid track
record in the global marketplace, in the mergers and acquisitions,
corporate finance and strategic planning arena, working for companies
such as Omnicom Group, DDB Needham Worldwide and LucasFilm. He assisted
New Line Cinema in preparation for its initial public offering, and was
instrumental in managing the $600 million acquisition of 20th Century Fox
by News America. He served as the interim CFO for Creatability from 1999
- 2000 and Momentum Entertainment during 1998 - 1999.
Mr. Steven Zimmerman serves as Chief Technology Officer. He holds a
Bachelor of Arts in economics from the University of Virginia and a
Masters of Business Administration from San Francisco State University.
Mr. Zimmerman brings over 13 years of technology leadership experience to
Verida. From 1986 to 1994 Mr. Zimmerman served as Vice President and MIS
<PAGE> 10
director for Barclay & Company, Inc. In 1996 Mr. Zimmerman co-founded
NetOpus Incorporated, an Internet hosting and development company. As
President of NetOpus Incorporated, Mr. Zimmerman oversaw the design,
development and implementation of Internet-based e-commerce solutions,
with an emphasis on transaction processing, security, and database
integration. While there, he also developed the Sales Associate System,
a line of web based applications that enable companies to sell their
products and services securely over the Internet.
Mr. David Zimmerman serves as Vice President of Engineering. He holds a
Bachelor of Arts in Economics from Wesleyan University. As co-founder and
Chief Technology Officer of NetOpus Incorporated, creators of Web
applications enabling online catalog display and order processing, David
Zimmerman enjoyed an early introduction to the emerging world of Internet
commerce. While building and maintaining one of the earliest and still
one of the more established Internet malls, Choice Mall, Mr. Zimmerman
led the development of NetOpus' e-commerce Store Creator Software. Having
since worked independently and with numerous development companies, most
recently as a Senior Engineer with USWeb/CKS, Mr. Zimmerman brings
diverse e-commerce project architecture and implementation skills needed
to lead Verida's engineering group in the creation of high-availability,
flexible, and transactional e-commerce solutions across a wide array of
industries.
Mr. Jason Fuchs was hired as Chief Information Officer in January 2000.
He holds a Bachelor of Arts in Molecular Biology from the University of
Colorado. From 1984 to 1996, Mr. Fuchs acted as an independent computer
consultant, building database applications and maintaining computer
systems. From 1996 to 1998, he acted as the systems administrator for two
multi-media and Internet technology firms. From 1998 to 1999, Mr. Fuchs
was a senior manager for Langtech Systems, a systems integrator and web-
application development company. His primary client responsibilities
included acting as an outsourced CTO/CIO for traditional firms as well as
venture capital backed Internet start-ups. He designed, implemented,
maintained and supported the local and wide area networks for these
companies, spanning from the desktop to the server and network backbone.
Mr. Mark Katsumata has been the Corporate Secretary of the Company since
June 1998 and was the acting Chief Financial Officer up to the
appointment of Mr. Corona. Mr. Katsumata is a certified general
accountant who was in public practice from 1990 to 1994 with De Visser &
Company in Vancouver, B.C. On October 1994 Mr. Katsumata joined Indo-
Pacific Energy Ltd., a reporting company trading on the OTCBB, and
presently continues to occupy the position of Secretary. Mr. Katsumata is
also the Secretary and Chief Financial Officer of Trans-Orient Petroleum
Ltd.
Steven and David Zimmerman are brothers and other than this relationship,
there are no family relationships among the directors and executive
officers.
Each executive officer was appointed by the Board of Directors and serves
at the Board's discretion.
<PAGE> 11
Executive Compensation
The following summary compensation table sets forth the cash compensation
earned for the fiscal years ended December 31, 1999, 1998 and 1997 by
each person who served as the Company's Chief Executive Officer during
fiscal 1999 and by each of the executive officers who were serving as
executive officers at the end of the 1999 fiscal year whose individual
total cash compensation for the 1999 fiscal year exceeded $100,000 (the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
Long Term Compensation
Securities
Restricted Under
Named and Fiscal Stock Options/ All Other
Principal Year Salary Awards SARs Compensation
Position Ended ($) (#) (#) ($)
Michael Hinshaw [1] 1999 45,000 [5] 500,000 750,000 [5]
President & CEO 1998 Nil Nil Nil Nil
1997 Nil Nil Nil Nil
Richard Cohn [2] 1999 71,250 Nil 200,000 Nil
Executive Vice 1998 Nil Nil Nil Nil
President 1997 Nil Nil Nil Nil
Henry Corona 1999 Nil Nil Nil Nil
Chief Financial 1998 Nil Nil Nil Nil
Officer 1997 Nil Nil Nil Nil
Steven
Zimmerman [3] 1999 51,501 [6] 150,000 50,000 [6]
Chief Technology 1998 Nil Nil Nil Nil
Officer 1997 Nil Nil Nil Nil
David Zimmerman [4] 1999 41,251 [6] 100,000 50,000 [6]
Vice President of 1998 Nil Nil Nil Nil
Engineering 1997 Nil Nil Nil Nil
Jason Fuchs 1999 Nil Nil Nil Nil
Chief Information 1998 Nil Nil Nil Nil
Officer 1997 Nil Nil Nil Nil
Mark Katsumata 1999 Nil Nil Nil Nil
Corporate Secretary 1998 Nil Nil Nil Nil
1997 Nil Nil Nil Nil
[1] Effective October 1, 1999. See "Employment Contracts and Termination
of Employment"
[2] Effective March 15, 1999. See "Employment Contracts and Termination
of Employment."
[3] Effective April 1, 1999. See "Employment Contracts and Termination
of Employment."
[4] Effective August 15, 1999. See "Employment Contracts and Termination
of Employment."
<PAGE> 12
[5] On February 8, 1999, Mr. Hinshaw was issued 1,000,000 common shares
at a price of $.001 and 1,000,000 shares at a price of $.03 per
share for total proceeds of $31,000. On February 8, 1999, the market
price closed at $.25 per share. The difference between the price
paid and the market value of the issuances is $469,000.
Additionally, on October 21, 1999, the Company acquired through a
merger under California Law, 100% ownership of Triad Creative, Inc.,
a private marketing company wholly owned by Mr. Hinshaw for an
agreed value of $1,800,000. The consideration consisted of $750,000
payable in cash and 150,000 common shares of the Company with a
deemed value of $7.00 per share. The closing market price of the
Company's common shares on October 21, 1999 was $6.13. See "Certain
Relationships and Related Transactions."
[6] On June 11, 1999, the Company purchased rights to certain software
from NetOpus Incorporated, a private company owned and controlled by
Steven and David Zimmerman. The Company paid $50,000 cash and issued
25,000 restricted common shares at an agreed price of $5.25 per
share. On June 11, 1999 the closing market price of the Company's
common stock was $5.25. See "Certain Relationships and Related
Transactions."
The following table presents information concerning individual grants of
options to purchase common stock made during the fiscal year ended
December 31, 1999, to each of the Named Executive Officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Percent of
Total Options Exercise
Granted to of Base
SARs Granted Employees in Price Expiration
Name granted (#) Fiscal Year ($/Sh.) Date
Michael Hinshaw 500,000(1) 41.4% 5.25 06/14/04
Richard Cohn 200,000(2) 16.6% 4.00 04/14/04
Steven Zimmerman 150,000(2) 12.4% 4.00 04/14/04
David Zimmerman 100,000(3) 8.3% 7.00 08/15/04
Mark Katsumata 25,000(2) 2.1% 5.25 06/14/04
Notes:
(1) Of the 500,000 options granted to Mr. Hinshaw, 200,000 are subject
to the following vesting schedule: 25% at 6 months from granting,
25% at 12 months from granting, 25% at 24 months from granting and
25% at 36 months from granting. An option to acquire 300,000 shares
vested immediately upon granting.
(2) Subject to the following vesting schedule: 25% at 6 months from
granting, 25% at 12 months from granting, 25% at 24 months from
granting and 25% at 36 months from granting.
(3) Subject to the following vesting schedule: 12.5% every six months
from granting until February 15, 2003 when a final 25% will vest.
<PAGE> 13
The following table sets forth the fiscal year-end value of unexercised
options to purchase common stock for each Named Executive Officer. No
options or SARs were exercised by the Named Executive Officers during the
fiscal year ended December 31, 1999.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
FISCAL YEAR END OPTION/SAR VALUES
Number of
Securities Underlying Value of Unexercised
Unexercised Options/SARs In-the-Money Options/SARs
Name at Fiscal Year Ended (#) At Fiscal Year End ($) [1]
Exercisable Unexercisable Exercisable Unexercisable
Michael Hinshaw 350,000 150,000 4,243,750 1,818,750
Richard Cohn 50,000 150,000 668,750 2,006,250
Steven Zimmerman 37,500 112,500 501,562 1,504,687
David Zimmerman nil 100,000 nil 1,037,500
Mark Katsumata 6,250 18,750 75,781 227,344
[1] Based on a December 31, 1999 closing price of $17.375 per share
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
The Company entered into an employment agreement effective October 1,
1999 with Mr. Hinshaw, President and CEO of the Company. The agreement
provides for an annual base salary of $180,000 and quarterly and annual
performance reviews. If Mr. Hinshaw is terminated with cause, he is
entitled to a 120 day advance notice. If his employment is terminated
without cause, he is entitled to 120 days advance notice and a severance
payment equal to 36 months of his base salary then in effect. In
addition, the Company will accelerate vesting of all of his unvested
options held by him at the date of termination.
On March 15, 1999, the Company entered into an employment agreement with
Mr. Cohn, Executive Vice President of the Company. The agreement provides
for an annual base salary of $90,000 and a 30 day advance notice if Mr.
Cohn's employment is terminated with or without cause. If his employment
is terminated without cause, his stock options will vest on a pro rata
basis through the effective date of termination, subject to a minimum of
50,000 shares.
Subsequent to the 1999 fiscal year end, the Company entered into an
employment agreement effective April 5, 2000 with Mr. Henry Corona, Chief
Financial Officer for the Company. The agreement provides for an annual
base salary of $160,020 and an initial signing bonus of $25,000 in cash
or the equivalent in shares of Common Stock in the Company. The agreement
also provides for the issuance of an option to purchase 300,000 common
shares of the Company exercisable at a price of $6.74 per share. The
option vests over a four and one half year period at the rate of 12.5% at
the end of the first 12 month period and an additional 12.5% every 6
months thereafter. The agreement provides for the acceleration of the
vesting of all options awarded to him in the event there is a change in
<PAGE> 14
control of the Company. The agreement provides for incentive payments of
$30,000 for each $10 million increment of debt or equity secured while
the employee is CFO during the first 24 months of employment. If Mr.
Corona is terminated without cause, he is entitled to 30 days advance
notice and a severance payment equal to 8 months salary plus certain
moving expenses.
Effective April 1, 1999, the Company entered into an employment agreement
with Mr. Steven Zimmerman, Chief Technology Officer of the Company. The
agreement provides for an annual base salary of $110,004 and a 30 day
advance notice if Mr. Zimmerman's employment is terminated without cause.
If his employment is terminated without cause during the first 12 months,
a minimum of 75,000 options will vest, or on a pro rata basis subsequent
to the first 12 months.
Effective August 15, 1999, the Company entered into an employment
agreement with Mr. David Zimmerman, Vice President of Engineering for the
Company. The agreement provides for an annual base salary of $110,004 and
a 30 day advance notice if Mr. Zimmerman's employment is terminated
without cause. If his employment is terminated without cause during the
first 12 months, a minimum of 25,000 options will vest, or on a pro rata
basis subsequent to the first 12 months.
Subsequent to the 1999 fiscal year end, the Company entered into an
employment agreement effective January 20, 2000 with Mr. Jason Fuchs,
Chief Information Officer for the Company. The agreement provides for an
annual base salary of $97,200. The agreement also provides for the
issuance of an option to purchase 53,000 common shares of the Company
exercisable at a price of $9.03 per share. The option vests over a four
and one half year period at the rate of 12.5% at the end of the first 12
month period and an additional 12.5% every 6 months thereafter. If Mr.
Fuchs is terminated without cause within the first 6 months from the
effective date of his employment agreement, the Company will continue to
pay his salary for the remainder of the six month period. If his
employment is terminated without cause subsequent to the initial six
month period, Mr. Fuchs is entitled to 30 days advance notice. All of the
options granted to Mr. Fuchs will continue to vest according to the above
noted schedule if his employment is terminated without cause.
Certain Relationships and Related Transactions
Mr. Alex Guidi is the former President and a former member of the Board
of the Company. Mr. Guidi is a principal shareholder in the Company and
the President, CEO and Chairman of the Board of Trans-Orient Petroleum
Ltd. Mr. Bernhard Zinkhofer, a director of the Company, is also a member
of the Board of Directors of Trans-Orient Petroleum, Ltd. Mr. Mark
Katsumata is also the corporate secretary of Trans-Orient Petroleum, Ltd.
Mr. Michael Hinshaw purchased 1,000,000 common shares at a price of
$0.001 per share and a further 1,000,000 common shares at a price of
$0.03 per share. (See "Executive Compensation") Mr. Bernhard Zinkhofer
acquired 100,000 common shares at $0.001 per share and 100,000 common
shares at $0.03 per share (See "Director Compensation" above).
<PAGE> 15
The Company sold 59,800 shares of Trans-Orient Petroleum Ltd. for cash
proceeds of $81,972, resulting in a loss of $92,958. These securities
were originally acquired at a cost of $174,930 while the Company was
engaged in the oil and gas business. The Company also issued 178,571
units consisting of one common share and one share purchase warrant
exercisable at $10.00 per share on or before August 27, 2002, at a price
of $7.00 per share, to Trans-Orient Petroleum, Ltd. for cash proceeds of
$1,249,997 pursuant to a private placement. Subsequent to the 1999 year
end, the Company re-priced all of the warrants, which were then exercised
by Trans-Orient Petroleum, Ltd.
The Company acquired the rights to the "Sales Associate Store Creator"
software from NetOpus Incorporated, a private company owned and
controlled by Messrs. Steven and David Zimmerman. The purchase price
consisted of $50,000 cash and 25,000 shares of the Company's Common Stock
at a deemed price of $5.25 per share. The shares were restricted from
resale for a 12 month period from the date of issuance and subsequently
may be sold at a rate that cannot exceed 2,083 shares monthly. The
Company also paid NetOpus $2,367 for web-hosting services in 1999.
On October 21, 1999 the Company purchased 100% of Triad Creative, Inc.,
a private company wholly owned by Mr. Hinshaw, through a merger under
California Law. The Company agreed to pay $750,000 in cash and 150,000
shares of Common Stock at a deemed price of $7.00 per share. Prior to
determining the price to be paid, the Board received an evaluation of the
value of Triad from Mr. Henry Corona, who at the time was independent to
the Company, ranging from $1,700,000 to $2,100,000. Up to the date of
acquisition of Triad, Triad had designed the Company's websites and
certain other corporate materials at a cost of $313,396 in 1999.
Triad entered into various agreements for design services with companies
with common officers, directors and principal shareholders. Triad
generated $198,725 of revenues through these agreements in 1999.
STOCK PERFORMANCE GRAPH
The following line-graph provides a comparison of the cumulative total
shareholder return on the Company's common shares for the period from the
date of the Company's initial public offering on February 2, 1997 through
December 31, 1999, against the cumulative shareholder return during such
period achieved by the Russell 2000 index and an index of peer issuers
selected by the Company (the "Peer Group"). The Peer Group consists of
other companies that provide Web-based marketplaces or otherwise
facilitate Web-based procurement. The graph assumes that $100 was
invested on February 2, 1997 in the Company's Common Stock and in each of
the comparison indices, and assumes reinvestment of dividends.
The Stock Performance Graph shall not be deemed incorporated by reference
by any general statement incorporating by reference this proxy statement
into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended (collectively the "Acts"),
except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under
such Acts.
<PAGE> 16
COMPARISON OF 34 MONTH CUMULATIVE TOTAL RETURN*
AMONG VERIDA INTERNET CORP., THE RUSSELL 2000 INDEX AND A PEER GROUP
CRSP Total Returns Index For: February 19, 1997 12/31/1999
Verida Internet Corp. $100 $4,633.33
Self-Determined Peer Group $100 $3,136.12
Russell 2000 (US Companies) $100 $ 117.36
Companies in the Self-Determined Peer Group:
SciQuest.com, Inc.
VerticalNet Inc.
Ventro Corporation
Neoforma.com, Inc.
eMerge Interactive, Inc.
ImageX.com, Inc.
Marex.com Inc.
viaLink Co.
Notes:
A. The lines represent monthly index levels derived from compounded
daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100 on February 19, 1997.
APPOINTMENT OF AUDITORS
The Board of Directors of the Company has selected the firm of Telford
Sadovnick, PLLC to serve as its independent auditors for the year ended
December 31, 2000. One or more representatives of Telford Sadovnick,
PLLC, which served as the Company's auditors in fiscal 1999, is expected
to be present at the Meeting and will have an opportunity to make a
statement, if they desire to do so, and to be available to respond to
appropriate questions.
The ratification of the selection of Telford Sadovnick, PLLC as the
Company's independent public accountants is not required to be submitted
for stockholder approval. However, the Board has elected to seek
ratification of its selection by the affirmative vote of a majority of
the shares represented and voting at the Meeting. Notwithstanding the
ratification by the stockholders of the appointment of Telford Sadovnick,
PLLC, the Board of Directors may, if the circumstances dictate, appoint
other independent accountants.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR THE RATIFICATION OF TELFORD SADOVNICK, PLLC. TO SERVE AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE CURRENT FISCAL YEAR ENDING
DECEMBER 31, 2000.
<PAGE> 17
In compliance with Item 304 of Regulation S-B the Company provides the
following information:
The Company's former independent auditor, Terrence J. Dunne, Certified
Public Accountant, of Spokane, Washington was dismissed by the Company on
February 9, 1999. The former auditor expressed an unqualified opinion on
the financial statements of Verida for the period from November 1, 1996
(inception) to December 31, 1996.
The decision to change auditors was approved by the Board of Directors
based on its belief that Mr. Dunne would not be able to consistently meet
the time requirements for the preparation of the Company's financial
statements and filings with the Securities and Exchange Commission. There
were no disagreements with the former auditor on any audit or accounting
issues.
The Company engaged the firm of Jorgensen Telford Sadovnick, PLLC,
Certified Public Accountants, as its new auditor on February 9, 1999.
Jorgensen Telford Sadovnick, PLLC received a letter dated February 11,
1999 from Mr. Dunne confirming that he was not aware of any circumstances
which would cause concern over the acceptance as auditors of our company
and that there were no disagreements between the Company and Mr. Dunne in
regard to any accounting principles or audit procedures.
In October 1999, Jorgensen Telford Sadovnick, PLLC changed its name to
Telford Sadovnick, PLLC.
OTHER MATTERS
The Board of Directors knows of no business other than the matters set
forth herein which will be presented at the Annual Meeting. Inasmuch as
matters not known at this time may come before the meeting, the enclosed
proxy confers discretionary authority with respect to such matters as may
properly come before the meeting and it is the intention of the persons
named in the proxy to vote in accordance with their judgment on such
matters.
STOCKHOLDER PROPOSALS
Any proposals from Stockholders to be presented for consideration for
inclusion in the proxy material in connection with the 2001 Annual
Meeting of Stockholders of the Company must be submitted in accordance
with the rules of the Securities and Exchange Commission and received by
the Secretary of the Company at the Company's principal executive offices
no later than the close of business on February 1, 2001.
Under the rules promulgated by the Securities and Exchange Commission,
Stockholder proposals not included in the Company's proxy materials for
its 2001 Annual Meeting of Stockholders in accordance with Rule 14a-8 of
the Exchange Act of 1934, as amended, will be considered untimely if
notice thereof is received by the Company after February 1, 2001.
Management proxies will be authorized to exercise discretionary voting
authority with respect to any Stockholder proposal not included in the
Company's proxy materials for the 2001 Annual Meeting unless the Company
receives notice thereof by February 1, 2001 and the conditions set forth
in Rule 14a-4(c)(2) under the Exchange Act of 1934, as amended, are met.
<PAGE> 18
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires
officers, directors and persons who own more than ten percent of a
registered class of a company's equity securities to file initial reports
of beneficial ownership and to report changes in ownership of those
securities with the Securities and Exchange Commission. They are also
required to furnish the Company with copies of all Section 16(a) forms
they file. To the Company's knowledge, based solely on review of the
copies of Forms 3, 4 and 5 furnished to the Company we have determined
the following:
- Mr. Michael Hinshaw was late in the filing of two Form 4's, one of
which was required to report the initial granting of his options in
June 1999 and was later filed in August 1999; while the second
related to the issuance of shares in October 1999 to him on account
of the Triad Creative Inc. purchase and with respect to which his
Form 4 was filed one day late on November 11, 1999;
- Mr. Richard Cohn, the Company's Executive Vice President, was late
in the filing of one Form 4, which was required to report the
initial granting of his options in June 1999 and was later filed in
August 1999;
- Mr. Steven Zimmerman, the Company's Chief Technology Officer, was
late in the filing of one Form 4 which was required to report the
initial granting of his options in June 1999 and was later filed in
August 1999;
- Mr. Mark Katsumata, the Company's Corporate Secretary, was late in
the filing of one Form 4, which was required to report the initial
granting of his options in June 1999 and was later filed in August
1999
- Mr. Peter Rantucci, a director of the Company, was late in the
filing of one Form 4, which was required to report the initial
granting of his options in June 1999 and was later filed in August
1999.
ADDITIONAL INFORMATION
All information contained in this Proxy Statement relating to the
occupations, affiliations and securities holdings of directors and
officers of the Company and their relationship and transactions with the
Company is based upon information received from the individual directors
and officers. All information relating to any beneficial owner of more
than 5% of the Company's Common Stock is based upon information contained
in reports filed by such owner with the Securities and Exchange
Commission.
The Annual Report to Stockholders of the Company for the fiscal year
ended December 31, 1999, which includes financial statements and
accompanies this Proxy Statement, has been mailed to the stockholders
concurrently herewith, but such Annual Report is not incorporated in this
Proxy Statement and is not deemed to be part of the proxy solicitation
material.
<PAGE> 19
The Company will furnish without charge a copy of its Annual Report on
Form 10-KSB, including the financial statements, for the fiscal year
ended December 31, 1999, filed with the Securities and Exchange
Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 to any Stockholder (including any beneficial owner) upon written
request to Henry Corona, Chief Financial Officer, 50 California Street,
Suite 1500, San Francisco, California 94111. A copy of the exhibits to
such report will be furnished to any Shareholder upon written request and
payment of a nominal fee.
BY ORDER OF THE BOARD OF DIRECTORS
"Michael Hinshaw"
Michael Hinshaw, President and Chief Executive Officer
<PAGE> 20
VERIDA INTERNET CORP. PROXY
SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD JUNE 30, 2000
The undersigned hereby constitutes, appoints, and authorizes Michael
Hinshaw as the true and lawful attorney and Proxy of the undersigned,
with full power of substitution and appointment, for and in the name,
place and stead of the undersigned to act for and vote as designated
below, all of the undersigned's shares of the Common Stock of Verida
Internet Corp., a Nevada corporation, at the Annual Meeting of the
Stockholders to be held June 30, 2000, at Verida's corporate offices at
50 California Street, Suite 1500, San Francisco, California, 94111 at
10:00 a.m. Pacific Daylight Time, and at any and all adjournments
thereof, with respect to the matters set forth below and described in the
Notice of Annual Meeting dated June 13, 2000, receipt of which is hereby
acknowledged.
1. Approval of the election of each of the three nominees named
herein for the office of director to serve until the next Annual Meeting
of Stockholders or until their respective successors are elected and
qualified.
[ ] FOR ALL NOMINEES LISTED BELOW (except as marked to the contrary
below)
[ ] WITHOLD AUTHORITY TO VOTE FOR ALL LISED BELOW
(INSTRUCTION: To withhold authority to vote for any individual
nominee strike a line through the nominee's name in the list below.)
Michael Hinshaw Bernhard Zinkhofer Peter Rantucci
2. To consider and vote upon a proposal to ratify the appointment
of Telford Sadovnick, P.L.L.C. as independent auditors of the Company for
the fiscal year ended December 31, 2000.
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
3. The Proxy is authorized to vote upon any other business as may
properly come before the Annual Meeting or any adjournment thereof.
The undersigned hereby revokes any Proxies as to said shares
heretofore given by the undersigned, and ratifies and confirms all that
said attorney and Proxy may lawfully do by virtue hereof.
<PAGE> 21
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT
THE TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF
STOCKHOLDERS TO THE UNDERSIGNED.
DATED: ______________________, 2000
__________________________________
Signature(s) of Stockholder(s)
__________________________________
Signature(s) of Stockholder(s)
Signature(s) should agree with the name(s) shown hereon. Executors,
administrators, trustees, guardians and attorneys should indicate their
capacity when signing. Attorneys should submit powers of attorney. When
shares are held by joint tenants, both should sign. If a corporation,
please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF VERIDA INTERNET CORP.
PLEASE SIGN AND RETURN THIS PROXY
USING THE ENCLOSED PRE-PAID ENVELOPE
THE GIVING OF A PROXY WILL NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING
