SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]Preliminary Proxy Statement
[X]Definitive Proxy Statement
[ ]Definitive Additional Materials
[ ]Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ]Confidential, for use of the Commission only as permitted by Rule 14a-6(e)(2)
Compuflight, Inc.
(Name of Registrant as Specified in its Charter)
(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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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)
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ]Fee paid previously with preliminary materials:
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[ ] 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:
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2) Form, Schedule or Registration Statement no.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
COMPUFLIGHT, INC.
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JANUARY 14, 2000
- --------------------------------------------------------------------------------
To the Shareholders
of COMPUFLIGHT, Inc.
- --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Meeting")
of COMPUFLIGHT, INC., a Delaware corporation (the "Company" or "Compuflight"),
will be held at the conference room of the Best Western St. Jacob's Country Inn,
located at 50 Benjamin Road, Waterloo, Ontario, Canada, on Friday, January 14,
2000 at 1:00 p.m., local time, for the following purposes:
(1) To elect a board of five directors.
(2) To approve an amendment to the Company's Certificate of Incorporation to
change the name of the Company to "Navtech, Inc."
(3) To approve an amendment to the Company's Certificate of Incorporation to
increase the number of authorized Common Shares from 2,500,000 to 10,000,000.
(4) To approve an amendment to the Company's Certificate of Incorporation to
decrease the number of authorized Preferred Shares from 10,000,000 to 2,000,000.
(5) To ratify the adoption of the Company's 1999 Stock Option Plan.
(6) To approve an amendment to the Company's Certificate of Incorporation to
require unanimous, rather than majority, written consent of shareholders in lieu
of a meeting under certain circumstances.
(7) To approve and adopt amended and restated By-Laws for the Company.
(8) To transact such other business as may properly come before the Meeting.
Only shareholders of record at the close of business on December 15, 1999 are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
Denis L. Metherell
Secretary
December 17, 1999
================================================================================
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE, DATE AND SIGN THE
ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS OF COMPUFLIGHT, AND
RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT PURPOSE. A SHAREHOLDER
MAY REVOKE HIS PROXY AT ANY TIME BEFORE THE MEETING BY WRITTEN NOTICE TO SUCH
EFFECT, BY SUBMITTING A SUBSEQUENTLY DATED PROXY OR BY ATTENDING THE MEETING AND
VOTING IN PERSON.
================================================================================
4
<PAGE>
COMPUFLIGHT, INC.
PROXY STATEMENT
This Proxy Statement is being mailed on or about December 17, 1999, to
all shareholders of record of Compuflight, Inc. (the "Company" or "Compuflight")
at the close of business on December 15, 1999, in connection with the
solicitation by the Board of Directors of proxies to be voted at the Annual
Meeting of Shareholders (the "Meeting") to be held on January 14, 2000, at the
conference room of the Best Western St. Jacob's Country Inn, located at 50
Benjamin Road, Waterloo, Ontario, Canada at 1:00 p.m. local time, or any
adjournment thereof.
All proxies duly executed and received will be voted on the matters presented at
the Meeting in accordance with the specifications made in such proxies. In the
absence of specified instructions, proxies so received will be voted as follows:
(1) FOR the named nominees to the Company's Board of Directors;
(2) FOR the proposal to amend the Company's Certificate of Incorporation to
change the name of the Company to "Navtech, Inc.;"
(3) FOR the proposal to amend the Certificate of Incorporation to increase the
number of authorized Common Shares from 2,500,000 to 10,000,000;
(4) FOR the proposal to amend the Certificate of Incorporation to decrease the
number of authorized Preferred Shares from 10,000,000 to 2,000,000;
(5) FOR the proposal to ratify the adoption of the Company's 1999 Stock Option
Plan;
(6) FOR the proposal to amend the Certificate of Incorporation pursuant to
which, if action is to be taken by the shareholders of the Company without
a meeting, then the written consent of the holders of all of the shares of
capital stock of the Company entitled to vote on such action will be
required. However, if the action has been authorized by the Board of
Directors, then the action may be taken by the written consent of the
holders of not less than a majority of the shares of capital stock entitled
to vote on such action; and
(7) FOR the proposal to adopt the amended and restated By-Laws.
The Board does not know of any other matters that may be brought before the
Meeting nor does it foresee or have reason to believe that proxy holders will
have to vote for substitute or alternate nominees to the Board. In the event
that any other matter should come before the Meeting or any nominee is not
available for election, the persons named in the enclosed proxy will have
discretionary authority to vote all proxies not marked to the contrary with
respect to such matters in accordance with their best judgment.
The total number of Common Shares, par value $.001 per share, of
Compuflight (the "Common Shares") outstanding as of December 15, 1999 was
2,001,980. Each Common Share is entitled to one non-cumulative vote. The Common
Shares are the only class of securities of Compuflight entitled to vote. A
majority of the Common Shares outstanding and entitled to vote as of December
15, 1999, or 1,000,991 Common Shares, must be present at the Meeting in person
or by proxy in order to constitute a quorum for the transaction of business.
Only shareholders of record as of the close of business on December 15, 1999
will be entitled to vote.
With regard to the election of directors, votes may be cast in favor or
withheld. The directors shall be elected by a plurality of the votes cast in
favor. Accordingly, based upon there being five nominees, each person who
receives one or more votes will be elected as a director. Votes withheld in
connection with the election of one or more of the nominees for director will
not be counted as votes cast for such individuals.
5
<PAGE>
Shareholders may expressly abstain from voting on Proposals 2, 3, 4, 5, 6
and 7 by so indicating on the proxy. Abstentions and broker non-votes will be
counted for purposes of determining the presence or absence of a quorum for the
transaction of business. Abstentions are counted as present in the tabulation of
votes on each of the proposals presented to shareholders. Broker non-votes will
not be counted for the purpose of determining whether a particular proposal has
been approved. Since Proposals 2, 3, 4 and 6 require the approval of a majority
of the outstanding Common Shares, abstentions and broker non-votes will have the
effect of a negative vote. Since Proposals 5 and 7 require the approval of a
majority of the Common Shares present in person or by proxy at the Meeting and
entitled to vote (assuming a quorum is present), abstentions will likewise have
the effect of a negative vote, while broker non-votes will have no effect.
Any person giving a proxy in the form accompanying this Proxy Statement has
the power to revoke it at any time before its exercise. The proxy may be revoked
by filing with Compuflight written notice of revocation or a fully executed
proxy bearing a later date. The proxy may also be revoked by affirmatively
electing to vote in person while in attendance at the Meeting. However, a
shareholder who attends the Meeting need not revoke a proxy given and vote in
person unless the shareholder wishes to do so. Written revocation or amended
proxies should be sent to the offices of the Company's subsidiary, Navtech
Systems Support Inc. ("Navtech") located at 175 Columbia Street West, Suite 102,
Waterloo, Ontario, Canada N2L 5Z5.
The proxy is being solicited by the Company's Board of Directors.
Compuflight will make all solicitations of proxies, and will bear the cost of
such solicitation, including the charges and expenses of brokerage firms and
other custodians, nominees and fiduciaries for forwarding proxy materials to
beneficial owners of Common Shares. Solicitations will be made primarily by
mail, but certain directors, officers or employees of Compuflight may solicit
proxies in person or by telephone, telecopier or telegram without special
compensation.
A list of shareholders entitled to vote at the Meeting will be available
for examination by any shareholder at Navtech's offices, 175 Columbia Street
West, Suite 102, Waterloo, Ontario, Canada, for a period of ten days prior to
the Meeting and will also be available at the Meeting.
EXECUTIVE COMPENSATION
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Summary Compensation Table
The following table sets forth certain information concerning the
compensation of all executive officers of the Company as of October 31, 1998 who
had a total salary and bonus for such year in excess of $100,000, as well as
Duncan Macdonald, the Chief Executive Officer of the Company during the fiscal
year ended October 31, 1998:
- -------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
Awards Payouts
- -------------- ----- --------- -------- --------------- ---------- ----------- --------- --------------
Common
- -------------- ----- --------- -------- --------------- ---------- ----------- --------- --------------
Restricted Stock
Name and Other Annual Stock Underlying LTIP All Other
Principal Salary Bonus Compensation Award(s) Options Payouts Compensation
Position Year
- --------------- ------ ---------- -------- ---------------- ----------- ------------ ---------- ===============
Duncan 1998 -0- -0- $ 106,486 (1) -0- -0- -0- -0-
Macdonald, 1997 --------- -------- --------------- ---------- ----------- --------- --------------
1996 -0- -0- $ 118,826 (1) -0- -0- -0- -0-
Chief -0- -0- $ 106,359 (1) -0- 200,000 -0- -0-
Executive
Officer
- -------------- ----- --------- -------- --------------- ---------- ----------- --------- --------------
Russell K. 1998 $143,683 -0- $14,800 (2)(3) -0- -0- -0- -0-
Thal, 1997 $139,526 -0- $14,800 (2)(3) -0- -0- -0- -0-
1996 $135,863 -0- $14,800 (2)(3) -0- -0- -0- -0-
Chairman of
the Board
- -------------------------------------------------------------------------------------------------------------------
(1) Represents amounts paid as an independent advisor to the Company. See
"Certain Relationships and Related Transactions." (2) Includes $12,000 paid by
the Company as an automobile allowance. (3) Includes $2,800 paid by the Company
as an allowance for the purchase of disability insurance.
</TABLE>
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Option Grants
Neither Mr. Macdonald nor Mr. Thal received any grants of stock
options during the fiscal year ended October 31, 1998.
Fiscal Year-End Option Value Table
The following table sets forth certain information concerning the value as
of October 31, 1998 of unexercised options held by Messrs.
Macdonald and Thal:
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Number of Unexercised Options at Value of Unexercised In-the-Money
October 31, 1998 Options at October 31, 1998
- -------------------------------- --------------------------------- ---------------------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
- --------------------------------- ---------------------------------- ========================================
Duncan Macdonald -0-/200,000 -0-/-0-
- --------------------------------- ---------------------------------- ========================================
Russell K. Thal 75,938/-0- -0-/-0-
- ----------------------------------------------------------------------------------------------------------------
No options were exercised by either Mr. Macdonald or Mr. Thal during the fiscal year ended October 31, 1998.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Compensation of Directors
The By-Laws of the Company currently provide that directors shall be
reimbursed for travel expenses incurred in attending any meeting of the Board or
any committee thereof and each Director, except salaried officers of the
Company, shall be paid a fee for attending each meeting of the Board or any such
committee as may be fixed by the Board from time to time. The amended and
restated By-Laws (see "Proposal 7: Amended and Restated By-Laws") provide that
such expense reimbursement and attendance fee is discretionary with the Board.
No directors' fees have been paid to date. The Certificate of Incorporation and
By-Laws of the Company also provide, to the extent permitted by law, for certain
indemnification of its directors.
Employment Contracts; Termination of Employment and Change-in-Control
Arrangements
See "Certain Relationships and Related Transactions" for a discussion of
certain Services Agreement between Navtech and an affiliate of Mr. Macdonald
with respect to services being performed for Navtech, as well as a discussion of
certain Employment Agreements with respect to services being provided by
Mr.Macdonald and Mr. Vietze fo the Company.
Mr. Thal was employed by the Company pursuant to an employment agreement
(the "Employment Agreement") which expired on July 31, 1999 and provided for a
minimum annual salary of $125,000 effective December 1, 1993, with annual cost
of living increases. On August 25, 1999, effective as of August 1, 1999, the
Company entered into a retirement agreement (the "Retirement Agreement") with
Mr. Thal. The Retirement Agreement replaces the Employment Agreement and calls
for, among other things, the continued employment of Mr. Thal at the then
existing salary rate until Mr. Thal's retirement date of October 31, 1999. In
addition, the Company has agreed to pay to Mr. Thal $600,000 in 96 semimonthly
payments commencing with Mr. Thal's retirement. Mr. Thal has continued as
Chairman following his retirement without compensation (other than standard
fees, if any, paid to outside directors).
Pursuant to the Retirement Agreement, the Company also agreed to reimburse
Mr. Thal for expenses incurred in the amount of $60,594 (payable over the period
August 1999 to May 2000) and to obtain a declining balance life insurance policy
on Mr. Thal commencing with coverage of $600,000 and declining at the rate of
$150,000 per year. Any proceeds received will be used by the Company to pay to
Mr. Thal's estate any remaining portion of the $600,000 due. All amounts due by
the Company are evidenced by promissory notes that contain acceleration
provisions in the event of, among other things, a default in payment.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The total number of Common Shares outstanding as November 30, 1999 was
2,001,980. The Common Shares are the only class of securities outstanding. Each
share is entitled to one vote. The following table sets forth certain
information regarding the Company's outstanding Common Shares beneficially owned
as of November 30, 1999 by (i) each person who is known by the Company to own
beneficially or exercise voting or dispositive control over more than 5% of the
Company's Common Shares, (ii) each present Director, (iii) each person named in
the Summary Compensation Table above, and (iv) all of the Company's present
executive officers and directors as a group:
<TABLE>
<S> <C> <C>
- --------------------------------- ------------------------------------ ---------------------------------
Name and Address of Beneficial Number of Shares Beneficially Owned Approximate Percentage of
Owner Outstanding Shares
- ---------------------------------- ------------------------------------- ==================================
Dorothy A. English 1,007,766(1)(2) 50.3%
175 Columbia Street West
Waterloo, Ontario,
Canada
- ---------------------------------- ------------------------------------- ==================================
Navtech Applied Research Inc. 802,766(2)(3) 40.1%
175 Columbia Street West
Waterloo, Ontario,
Canada
- ---------------------------------- ------------------------------------- =================================
Kenneth M. Snyder 350,000(4) 14.9%
1751 Westwood Drive
Minden, Nevada
- ---------------------------------- ------------------------------------- ==================================
Global Weather Dynamics, Inc 250,000 12.5%
2400 Garden Road
Monterey, California
- ---------------------------------- ------------------------------------- ==================================
Innovation Ontario Corporation 125,000 6.2%
56 Wellesley Street West
Toronto, Ontario, Canada
- ---------------------------------- ------------------------------------- ==================================
Russell K. Thal 93,813(5) 4.5%
125 Mineola Avenue
Roslyn Heights, New York
- ---------------------------------- ------------------------------------- ==================================
Denis L. Metherell 6,000 *
175 Columbia Street West
Waterloo, Ontario,
Canada
- ---------------------------------- ------------------------------------- ==================================
Duncan Macdonald - (6) *
275 Slater Street
Ottawa, Ontario,
Canada
- ---------------------------------- ------------------------------------- ==================================
All executive officers and
directors as a group (7 persons) 1,457,579(1)(4)(5) 60.0%
- ---------------------------------- ------------------------------------- ==================================
</TABLE>
* Less than 1%
(1) Represents 802,766 shares beneficially owned by Navtech Applied
Research Inc. ("NARI") (see footnote (3) below) and 205,000
shares beneficially owned by Ms. English.
(2) Such persons may be deemed parents of the Company.
(3) Represents shares beneficially owned by NARI, of which, the Company
has been advised, Ms. English is the Chairman, Chief Executive Officer
and sole shareholder. Furthermore, the Company has been advised that
these shares have been pledged to Raymond English as collateral for
certain amounts due to Mr. English under an agreement between Mr.
English and NARI. NARI has maintained voting control over these
shares. See "Certain Relationships and Related Transactions."
(4) Represents shares issuable upon exercise of options that are currently
exercisable.
(5) Includes 75,938 shares issuable pursuant to currently exercisable
options and 312 shares owned by Mr. Thal's wife. This shall not be
deemed an admission that Mr. Thal is the beneficial owner of the
shares owned by his wife.
7
<PAGE>
(6) Mr. Macdonald has voluntarily agreed not to exercise currently
exercisable options held by him for the purchase of 200,000 Common
Shares until such time as the authorized share capital of the Company
has been sufficiently increased. In addition, as discussed under
"Certain Relationships and Related Transactions - Duncan Macdonald," in
the event of such increase in authorized share capital of the Company,
a maximum of 343,546 Common Shares will be issuable to an entity
controlled by Mr. Macdonald pursuant to the terms of a convertible loan
made by such entity to the Company. See "Proposal 3: Amendment to
Certificate of Incorporation to Increase Number of Authorized Common
Shares."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Navtech Applied Research Inc.
General
Ray English and Associates Inc. ("RE&A") was a corporation incorporated in
Ontario, Canada. Until June 29, 1998, RE&A was controlled by Raymond English, a
former Chairman of the Company. As of that date, pursuant to a share transfer
agreement, the ownership of RE&A was transferred to Mr. English's former spouse,
Dorothy A. English. Dorothy A. English is an Executive Vice President and
Director of the Company. As of July 2, 1998, RE&A was merged with Navtech
Applied Research Inc. ("NARI") and continued operations under the latter name.
NARI was incorporated in Ontario, Canada on December 31, 1997 and during
all material times has been wholly owned by Dorothy A. English, who serves as
its Chairman and Chief Executive Officer.
References to RE&A below will pertain strictly to the company as it existed
prior to the merger with NARI.
Share Ownership
NARI owns 802,766 Common Shares of the Company. On or about July 15, 1995,
RE&A had transferred all of its Common Shares of the Company to Dorothy A.
English, as voting trustee pursuant to a voting trust agreement between them.
When control of RE&A was transferred to Dorothy A. English as discussed above
and RE&A and NARI merged, the voting trust agreement was terminated and the
shares returned to NARI. At that time, the share certificate was placed in
escrow as security for amounts payable by NARI to Mr. English pursuant to the
share transfer agreement discussed above.
RE&A/Navtech Transactions
In 1993, Navtech charged RE&A, its then parent company, a management,
consulting and marketing fee in connection with the management of certain
software owned by EAS, formerly a subsidiary of RE&A. Navtech also advanced
funds to RE&A in order to assist RE&A in meeting its continuing obligations.
Effective July 15, 1995, RE&A executed and delivered to Navtech a promissory
note in the principal amount of $750,000 Canadian (the "RE&A Note") to evidence
certain obligations to Navtech as of such date. The RE&A Note is payable on July
15, 2005 (or sooner, as described below) and provides for interest at the rate
of 5% per annum payable annually. Effective with the merger of RE&A and NARI,
NARI, by operation of law, assumed the obligation represented by the RE&A Note.
Further, pursuant to a consulting and marketing agreement between RE&A and
Navtech, RE&A agreed to provide software marketing services to the Company.
Navtech had the right to offset $3,500 Canadian per month against compensation
otherwise payable to RE&A thereunder as payment of amounts due under the RE&A
Note. Effective July 15, 1998, this agreement was terminated by NARI and
Navtech.
8
<PAGE>
Global Weather Dynamics, Inc.
On July 15, 1998, NARI acquired from Global Weather Dynamics, Inc. ("GWDI")
all of the assets of the GWDI's Weather Services Division ("WSD") for a
consideration consisting of $250,000 in cash, the delivery of 250,000 Common
Shares of the Company to GWDI and the delivery of 50,000 Common Shares of the
Company to an unrelated third party as a finder's fee. The primary assets
acquired included the weather and certain other software that had been developed
by GWDI. In addition, NARI obtained an assignment of the WSD customer contracts.
Following the WSD acquisition by NARI, NARI and Compuflight entered into a
non-exclusive, non-transferable software license agreement (the "License
Agreement") for a term commencing August 1, 1998 and expiring initially on
October 31, 1999, pursuant to which Compuflight has been granted the right to
install, configure, modify and use in its business the software acquired by
NARI. Pursuant to the License Agreement, the term automatically renews for
additional one year periods unless either party gives at least 60 days prior
written notice of its desire not to renew. Since no notice was given at least 60
days prior to October 31, 1999, the current term of the License Agreement has
been extended to October 31, 2000. In addition, pursuant to the License
Agreement, Compuflight is obligated to pay royalties in an amount equal to 10%
of certain revenues derived from the sale of data processed using the licensed
software. Concurrently with the execution of the License Agreement, NARI also
assigned to Compuflight the rights it had obtained from GWDI with respect to the
WSD customer contracts.
In order to effect NARI's acquisition of WSD, certain transactions were
undertaken between the Company and NARI to provide the necessary financing as
follows:
1. NARI purchased from Compuflight 300,000 Common Shares of the
Company in consideration of $300 in cash and the delivery of a
promissory note in the amount of $134,700, payable in 36 monthly
installments and bearing interest at the rate of 10% per annum.
The note provides that payments are to be made by offsetting
royalties due under the License Agreement.
2. Compuflight borrowed $210,000 from a Canadian financial
institution, which loan is repayable over a 28-month term bearing
interest at the rate of 9.18% per annum. Dorothy A. English
personally guaranteed the repayment of this loan.
3. The proceeds from the loan were transferred to Navtech which, in
turn, loaned $150,000 to NARI. This loan bears interest
commencing November 1, 1998 at the rate of 10% per annum and is
repayable in 36 monthly installments commencing November 1, 1999.
4. Subsequent to October 31, 1998, the Company advanced an
additional $100,000 to NARI. The additional advance is repayable
commencing with the payment in full of the promissory note in
Item 1 above. It is repayable at the same monthly rates outlined
above.
The weather and other software acquired by NARI and licensed to the Company
was of critical importance to the Company in order for it to maintain a
competitive advantage in the delivery of its products to the marketplace. The
Company had determined that the internal development of this software would
require at least 10 man-years to complete at a cost estimated to be in excess of
$700,000. Furthermore, the Company was paying third party weather suppliers
approximately $4,000 per month for weather and related data it had determined
was below the standards required by the Company's customers.
Russell K. Thal
Reference is made to "Employment Contracts; Termination of Employment and
Change-in-Control Arrangements" for a discussion of a certain retirement
agreement entered into between the Company and Mr. Thal.
AVCON Associates Inc. ("AVCON")
AVCON, an entity of which Denis L. Metherell, Secretary and a Director of
the Company, is a Vice President and a Director, leased certain computer
equipment to Navtech. Effective January 31, 1996, the leases were terminated. On
October 1, 1996, the Company entered into two new lease agreements for certain
computer equipment. These agreements were replaced on June 1, 1999 with amended
lease agreements. Under the present agreements, the Company is required to make
varying payments until November 2004. The Company believes that the lease
payments, which commenced July 1999 at $1,952 Canadian per month, are no higher
than would be payable to a nonaffiliated third party.
9
<PAGE>
On October 31, 1996, the Company executed and delivered to AVCON a
promissory note in the principal amount of $53,000 Canadian (the "AVCON Note")
to evidence amounts due under the terminated lease agreement noted above and
outstanding as of such date. On June 1, 1999, the Company amended the note (the
"Amended AVCON Note") to include additional arrears that had accumulated on the
two leases. The Amended AVCON Note is in the principal amount of $90,000
Canadian, provides for interest at the rate of 18% per annum and is payable as
follows:
1. interest only of $1,350 Canadian per month from July 1999 to
September 2000;
2. interest and principal of $2,400 Canadian per month from October
2000 to April 2005; and
3. a residual payment of principal and interest of $1,263 in May
2005.
Duncan Macdonald
Effective as of June 1, 1996, Navtech entered into a two year Key Advisor
Agreement (the "Macdonald Key Advisor Agreement") with Duncan Macdonald pursuant
to which Mr. Macdonald was retained to serve as Chief Executive Officer of the
Company. Pursuant to the Macdonald Key Advisor Agreement, as amended in January
1997, Mr. Macdonald was entitled to receive a base weekly fee of $3,000
Canadian. In addition, a bonus of $5,000 Canadian per fiscal quarter was payable
during the term of the Macdonald Key Advisor Agreement. Mr. Macdonald agreed to
expend at least 75% of his working time in the fulfillment of his duties under
the Macdonald Key Advisor Agreement. Mr. Macdonald has waived his entitlement to
the bonus amounts related to each of the fiscal quarters of 1997 and 1998. The
Macdonald Key Advisor Agreement expired in 1998, although Mr. Macdonald
continued to serve as Chief Executive Officer until December 1998 under the same
terms.
Effective December 1, 1998, the Company entered into a twenty month
Employment Agreement (the "Macdonald Employment Agreement") engaging Mr.
Macdonald as Chief Executive Officer of the Company. Mr. Macdonald is entitled
to receive a base quarterly fee of $1,250 commencing with the fiscal quarter
ended January 31, 1999. Mr. Macdonald has agreed to make 30% of his working time
available to the Company.
Effective January 1, 1999, Navtech entered into a two year Services
Agreement (the "Kintyre-Navtech Agreement") with Kintyre & Company Limited
("Kintyre"), a company owned by Mr. Macdonald. Under the Kintyre-Navtech
Agreement, Kintyre has agreed to provide the services of Mr. Macdonald and Mr.
Vietze, as well as other Kintyre staff as needed, to assist Navtech in it
stategic corporate structuring and corporate finance and accounting activities.
Kintyre is entitled to receive a base monthly fee of $23,250 Canadian, plus an
annual bonus of $8,700 Canadian.
In April 1999, St. Andrews Capital Limited Partnership ("St. Andrews LP")
advanced $90,000 to the Company for working capital purposes. Mr. Macdonald
serves as the President of the general partner of St. Andrews LP and is the
controlling stockholder of such general partner. The advance from St. Andrews LP
is repayable, together with interest at the rate of 18% per annum, in 22 monthly
installments.
On October 1, 1999, St. Andrews LP advanced $128,830 to the Company to
finance the Company's acquisition of Skyplan Services (UK) Limited. At the time
of the loan, the Company had sufficient working capital to undertake the
transaction, but determined that it was prudent to obtain outside financing. As
provided for in a term sheet (which calls for the completion of definitive loan
documents), the loan bears interest at the rate of 10% per annum and is
repayable in 24 equal monthly payments of approximately $5,945 commencing
November 1, 1999. The term sheet provides that the principal amount of the loan
is convertible into Common Shares of the Company at a conversion price of $0.375
per share effective on the first day of the month following the approval of an
increase in the authorized share capital of the Company sufficient for such
purpose.
Rainer Vietze
On November 1, 1998, Mr. Vietze ceased his employment with Navtech and
commenced employment with Kintyre. Effective December 1, 1998, the Company
entered into a twenty month Employment Agreement (the "Vietze Employment
Agreement") engaging Mr. Vietze as Chief Financial Officer of the Company. Mr.
Vietze is entitled to receive a base quarterly fee of $625 commencing with the
fiscal quarter ended January 31, 1999. Mr. Vietze has agreed to make 30% of his
working time available to the Company.
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees
Five directors are to be elected at the Meeting to serve until the next
annual meeting of shareholders and until their respective successors have been
elected and have qualified, or until their earlier resignation or removal.
The following table sets forth the positions and offices presently held
with Compuflight by each nominee for election as Director, his/her age as of
December 10, 1999, and the year in which he/she became a Director. Proxies not
marked to the contrary will be voted in favor of their election.
<TABLE>
<S> <C> <C> <C>
- ------------------------------- ---------- -------------------------------------------------- ---------------
Positions and Offices Year Became
Name Age Presently Held with Compuflight Director
- ----------------------------------------------------------------------------------------------================
Russell K. Thal 65 Chairman of the Board and Director 1981
- ----------------------------------------------------------------------------------------------================
Duncan Macdonald 40 Chief Executive Officer 1999
- ----------------------------------------------------------------------------------------------================
Dorothy A. English 57 Executive Vice President and Director 1994
- ----------------------------------------------------------------------------------------------================
Denis L. Metherell 67 Secretary and Director 1994
- ----------------------------------------------------------------------------------------------================
Kenneth M. Snyder 54 Director 1994
- ----------------------------------------------------------------------------------------------================
</TABLE>
Russell K. Thal, a founder of the Company, has served as Chairman of the
Board of the Company since October 1994 and a director of the Company since its
formation in 1981. Mr. Thal also served as the Company's President from 1981 to
July 1995, Chief Executive Officer from July 1995 to March 1996, Treasurer from
1981 to December 1993 and Executive Vice President from March 1996 to October
1999. Prior to founding the Company, Mr. Thal served as Director - Stations for
New York Air from December 1980 to June 1981. From 1978 to December 1980, he was
Director of Operations for Seaboard World Airlines, and Senior Director-Military
and Charter Operations for Flying Tigers, where he was responsible for
day-to-day control of operations, charter and military operations, and fuel
purchasing.
Duncan Macdonald has served as Chief Executive Officer of the Company
since March 1996 and a director of the Company since December 1999. He served as
Chief Financial Officer of the Company from July 1995 to January 1999. From July
1994 to July 1995, Mr. Macdonald provided management consulting services to the
Company and Navtech in a non-officer capacity. Since January 1992, Mr. Macdonald
has also served as managing partner of Kintyre & Company Limited, a management
consulting firm based in Ottawa, Ontario. In addition, since December 1998, Mr.
Macdonald has served as President of St. Andrews Technology Associates, Inc.,
the general partner of St. Andrews Capital Limited Partnership, a
California-based investment partnership.
Dorothy A. English has served as Executive Vice President of the Company
since July 1995 and a director of the Company since February 1994. Ms. English
also served as the Company's Chief Operating Officer from December 1993 to July
1994 and Chief Executive Officer from July 1994 to July 1995. She co-founded the
Company's subsidiary, Navtech, and has served as its Managing Director since
March 1996, its Treasurer since February 1992 and a director since 1987. Ms.
English also served as Vice President and Secretary of Navtech from 1987 to
February 1992, President from February 1992 to October 1993 as well as from
October 1995 to March 1996, and Chief Operating Officer from February 1992 to
October 1993.
Denis L. Metherell has served as Secretary of the Company since October
1994 and a director of the Company since July 1994. Mr. Metherell also served as
Treasurer of the Company from November 1994 to March 1996 and Chief Financial
Officer from November 1994 to July 1995. He served as Vice President of Navtech
from June 1993 to July 1995 and also serves as Vice President and a director of
AVCON Associates Inc., which leases computers to Navtech (see "Certain
Relationships and Related Transactions"). From 1976 to 1992, Mr. Metherell
served as a technical consultant to Northwest Airlines.
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Kenneth M. Snyder has served as a director of the Company since February
1994. Since October 1995, he has also served as a management consultant to
entities in the aviation industry and, from such date until November 30, 1998,
provided certain consulting, advisory and corporate finance services to the
Company. Mr. Snyder served as Vice President and Treasurer of the Company from
October 1993 to November 1994 and Chief Operating Officer from November 1994 to
July 1995. From October 1993 to October 1995, he served as President and Chief
Operating Officer of Navtech. Prior thereto and from 1984, Mr. Snyder served as
Vice President of American AirLease Corporation, a company engaged in the
leasing and financing of aircraft.
Committees
There are no committees of the Board of Directors, all functions being
performed by the Board as a whole. The Board will consider shareholder
recommendations for Board positions which are made in writing to Compuflight's
Chief Executive Officer.
Meeting
The Board held seven meetings during the fiscal year ended October 31,
1998. Each of Compuflight's then directors attended all such meetings, except
for Mr.Snyder who did not attend two meetings.
Family Relationships
There is no family relationship among any of Compuflight's executive
officers and directors.
Term of Office
Each director will hold office until the next Annual Meeting of
Shareholders or until his or her successor is elected and qualified. Each
executive officer will hold office until the next regular meeting of the Board
of Directors following the next Annual Meeting of Shareholders or until his or
her successor is elected or appointed and qualified.
Section 16(a) Beneficial Ownership Reporting Compliance
To the Company's knowledge, based solely on a review of copies of Forms 3,
4, and 5 furnished to the Company and written representations that no other
reports were required, during the fiscal year ended October 31, 1998, all
Section 16(a) filing requirements applicable to the Company's officers,
directors and 10% shareholders were complied with.
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PROPOSAL 2: AMENDMENT TO CERTIFICATE OF INCORPORATION
TO CHANGE NAME
The Company's Board of Directors has determined that it would be in the
best interests of the Company and its shareholders to amend the Company's
Certificate of Incorporation to change the Company's name to "Navtech, Inc." The
Board of Directors believes that the proposed new name, based on the Company's
subsidiary, Navtech Systems Support Inc., is more identifiable with the
Company's business activities and that, accordingly, its adoption will enhance
the Company's competitive position in the computerized flight planning and
aircraft performance engineering service industries.
Recommendation and Required Vote
The affirmative vote of the holders of a majority of all of the outstanding
Common Shares of the Company is required for approval of this proposal. The
Board recommends a vote FOR the adoption of the proposed amendment to the
Certificate of Incorporation.
PROPOSAL 3: AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE NUMBER OF AUTHORIZED COMMON SHARES
The Board of Directors has recommended an amendment to the Company's
Certificate of Incorporation to increase the number of authorized Common Shares
from 2,500,000 to 10,000,000. The Board believes such action to be in the best
interest of the Company so as to make additional shares available for
acquisitions, financing, present and future employee benefit programs and other
corporate purposes. Other than shares that may be issued upon the exercise of
options issued under the 1999 Stock Option Plan, if ratified (see "Proposal 5:
1999 Stock Option Plan"), the Company has no current plans or proposals to use
the newly authorized shares for acquisitions, financing, employee benefit plans
or other corporate purposes.
As indicated above, the Company is currently authorized to issue 2,500,000
Common Shares. As of December 15, 1999, there were 2,001,980 Common Shares
issued and outstanding. In addition, as of such date, there were 626,376 Common
Shares issuable pursuant to the exercise of outstanding options (including
200,000 shares issuable to Duncan Macdonald, Chief Executive Officer of the
Company, which option he has agreed not to exercise pending the approval of an
increase in the number of authorized Common Shares of the Company as
contemplated by this Proposal 3) and a maximum of 343,546 Common Shares issuable
pursuant to the terms of a loan made by an affiliate of Mr. Macdonald to the
Company (see "Certain Relationships and Related Transactions - Duncan
Macdonald") (which loan is similarly convertible upon an increase in the number
of authorized Common Shares as contemplated hereby).
The additional Common Shares may be issued from time to time as the Board
of Directors may determine without further action of the shareholders of the
Company. Although the Board has no current plans to utilize such shares to
entrench present management, it may, in the future, be able to utilize the
additional shares, together with or apart from the Company's authorized
Preferred Shares, as a defensive tactic against hostile takeover attempts. The
authorization of such shares shall have no current anti-takeover effect. No
hostile takeover attempts are, to management's knowledge, threatened. There are
no other provisions in the Company's charter or By-laws or other material
agreements to which the Company is a party which would, in management's
judgment, have an anti-takeover effect. See, however, "Proposal 6: Amendment to
Certificate of Incorporation to Require Unanimous, Rather Than Majority, Written
Consent of Shareholders in Lieu of a Meeting Under Certain Circumstances."
The relative rights and limitations of the Common Shares would remain
unchanged under the amendment. Shareholders of the Company do not currently
possess, nor upon the adoption of the proposed amendment will they acquire,
preemptive rights, which would entitle such persons, as a matter of right, to
subscribe for the purchase of any shares, rights, warrants or other securities
or obligations convertible into, or exchangeable for, securities of the Company.
12
<PAGE>
Recommendation and Required Vote
The affirmative vote of the holders of a majority of the outstanding Common
Shares of the Company is required for approval of this proposal. The Board
recommends a vote FOR adoption of this proposed amendment to the Certificate of
Incorporation.
PROPOSAL 4: AMENDMENT TO CERTIFICATE OF INCORPORATION
TO DECREASE NUMBER OF AUTHORIZED PREFERRED SHARES
The Board of Directors has recommended an amendment to the Company's
Certificate of Incorporation to decrease the number of authorized Preferred
Shares from 10,000,000 to 2,000,000. As there are currently no Preferred Shares
issued, and the Board does not anticipate a need for issuing more than 2,000,000
Preferred Shares in the near future, the Board believes such action to be in the
best interest of the Company so as to decrease the Delaware annual franchise tax
associated with the number of authorized Preferred Shares.
Recommendation and Required Vote
The affirmative vote of the holders of a majority of the outstanding Common
Shares of the Company is required for approval of this proposal. The Board
recommends a vote FOR adoption of this proposed amendment to the Certificate of
Incorporation.
PROPOSAL 5: 1999 STOCK OPTION PLAN
On November 17, 1999, the Company's Board of Directors adopted the 1999
Stock Option Plan (subject to shareholder approval thereof) and reserved for
issuance thereunder 1,500,000 Common Shares of the Company. The following
statements include summaries of certain provisions of the 1999 Plan. The
statements do not purport to be complete and are qualified in their entirety by
reference to the provisions of the 1999 Plan, a copy of which is available at
the offices of the Company.
Purpose
The purpose of the 1999 Plan is to advance the interests of the Company
by inducing eligible persons or entities of outstanding ability and potential to
join and remain with, or provide consulting or advisory services to, the
Company, by encouraging and enabling eligible employees, non-employee directors,
consultants and advisors to acquire proprietary interests in the Company, and by
providing such employees, non-employee directors, consultants and advisors with
an additional incentive to promote the success of the Company.
Administration
The 1999 Plan provides for its administration by the Board or by a
committee thereof (the "Committee"). The Board currently administers the 1999
Plan. The Board or the Committee has authority (subject to certain restrictions)
to select from the group of eligible employees, non-employee directors,
consultants and advisors the individuals or entities to whom options will be
granted, and to determine the times at which and the exercise price for which
options will be granted. The Board or the Committee is authorized to interpret
the 1999 Plan and the interpretation and construction by the Board or the
Committee of any provision of the 1999 Plan or of any option granted thereunder
shall be final and conclusive. The receipt of options by directors or any
members of the Committee shall not preclude their vote on any matters in
connection with the administration or interpretation of the 1999 Plan.
Nature of Options
The Board or Committee may grant under the 1999 Plan options that are
intended to either qualify as "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")
("Incentive Stock Options"), or not so qualify ("Nonstatutory Stock Options").
The United States Federal income tax consequences relating to the grant and
exercise of Incentive Stock Options and Nonstatutory Stock Options are described
below under "United States Federal Income Tax Consequences."
Eligibility
Subject to certain limitations as set forth in the 1999 Plan, options to
purchase shares may be granted thereunder to persons or entities who, in the
case of Incentive Stock Options, are employees (including directors and
officers) of either the Company or its subsidiaries or, in the case of
Nonstatutory Stock Options, are employees (including directors and officers) or
non-employee directors of, or certain consultants or advisors to, the Company or
its subsidiaries. At November 17, 1999, approximately 73 employees and three
non-employee directors were eligible to receive options under the 1999 Plan.
13
<PAGE>
Option Price
The option price of the shares subject to an Incentive Stock Option may not
be less than the fair market value (as such term is defined in the 1999 Plan) of
the Common Shares on the date upon which such option is granted. In addition, in
the case of a recipient of an Incentive Stock Option who, at the time the option
is granted, owns more than 10% of the total combined voting power of all classes
of stock of the Company (a "10% Shareholder"), the purchase price of the shares
must be at least 110% of the fair market value of the Common Shares on the date
upon which such option is granted.
The option price of shares subject to a Nonstatutory Stock Option will be
determined by the Board of Directors or the Committee at the time of grant and
need not be at least the market price for the Company's Common Shares.
On December 9th, 1999, the closing bid price for the Company's Common
Shares was $0.25 per share.
Exercise of Options
An option granted under the 1999 Plan shall be exercised by the delivery by
the holder thereof to the Company at its principal office (attention of the
Secretary) of written notice of the number of shares with respect to which the
option is being exercised. Such notice shall be accompanied by payment of the
full option price of such shares which shall be made by the holder's delivery of
(i) his check payable to the order of the Company in such amount or (ii)
previously acquired Common Shares, the fair market value of which shall be
determined as of the date of exercise, or any combination of (i) and (ii).
Duration of Options
No Incentive Stock Option granted under the 1999 Plan shall be exercisable
after the expiration of ten years from the date of its grant. However, if an
Incentive Stock Option is granted to a 10% Shareholder, such option shall not be
exercisable after the expiration of five years from the date of its grant.
Nonstatutory Stock Options granted under the 1999 Plan may be of such
duration as shall be determined by the Board or the Committee.
Non-Transferability
Options granted under the 1999 Plan are not transferable otherwise than by
will or the laws of descent and distribution and such options are exercisable,
during a holder's lifetime, only by the optionee.
Death, Disability or Termination of Employment
Subject to the terms of the stock option agreement pursuant to which
options are granted, if the employment of an employee or the services of a
non-employee Director, consultant or advisor shall be terminated for cause, or
such employment or services shall be terminated voluntarily, the options held by
such persons or entities shall expire immediately. If such employment or
services shall terminate other than by reason of death or disability,
voluntarily by the employee, non-employee Director, consultant or advisor or for
cause, then, subject to the terms of the stock option agreement, such option may
be exercised at any time within three months after such termination, but in no
event after the expiration of the option. For purposes of the 1999 Plan, the
retirement of an individual either pursuant to a pension or retirement plan
adopted by the Company or at the normal retirement date prescribed from time to
time by the Company shall be deemed to be a termination of such individual's
employment other than voluntarily by the employee or for cause.
14
<PAGE>
Subject to the terms of the stock option agreement, if an option holder
under the 1999 Plan (i) dies while employed by the Company or its subsidiary or
while serving as a non-employee Director of, or consultant or advisor to, the
Company or its subsidiary, or (ii) dies within three months after the
termination of his employment or services other than voluntarily or for cause,
then such option may be exercised by the estate of the employee, non-employee
Director, consultant or advisor, or by a person who acquired such option by
bequest or inheritance from the deceased option holder, at any time within one
year after his death. Subject to the terms of the stock option agreement, if the
holder of an option under the 1999 Plan ceases employment or services because of
permanent and total disability (within the meaning of Section 22(e)(3) of the
Code) while employed by, or while serving as a non-employee Director of, or
consultant or advisor to, the Company or its subsidiary, then such option may be
exercised at any time within one year after his termination of employment,
termination of directorship, or termination of consulting or advisory
arrangement or agreement due to the disability.
Amendment and Termination
The 1999 Plan (but not options previously granted thereunder) shall
terminate on November 17, 2009, ten years from the date that it was adopted by
the Board. Subject to certain limitations, the 1999 Plan may be amended or
modified from time to time or terminated at an earlier date by the Board or by
the shareholders.
United States Federal Income Tax Consequences
Nonstatutory Stock Options
Under the Code and the Treasury Department Regulations (the "Regulations"),
a Nonstatutory Stock Option does not ordinarily have a "readily ascertainable
fair market value" when it is granted. This rule will apply to the Company's
grant of Nonstatutory Stock Options. Consequently, the grant of a Nonstatutory
Stock Option to an optionee will result in neither income to him nor a deduction
to the Company. Instead, the optionee will recognize compensation income at the
time he exercises the Nonstatutory Stock Option in an amount equal to the
excess, if any, of the then fair market value of the shares transferred to him
over the option price. Subject to the applicable provisions of the Code and the
Regulations regarding withholding of tax, a deduction will be allowable to the
Company in the year of exercise in the same amount as is includable in the
optionee's income.
For purposes of determining the optionee's gain or loss on the sale or
other disposition of the shares transferred to him upon exercise of a
Nonstatutory Stock Option, the optionee's basis in such shares will be the sum
of his option price plus the amount of compensation income recognized by him on
exercise. Such gain or loss will be capital gain or loss and will be long-term
or short-term depending upon whether the optionee held the shares for more than
one year or one year or less. No part of any such gain will be an "item of tax
preference" for purposes of the "alternative minimum tax."
Incentive Stock Options
Options granted under the 1999 Plan which qualify as Incentive Stock
Options under Section 422 of the Code will be treated as follows:
Except to the extent that the alternative minimum tax rule described below
applies, no tax consequences will result to the optionee or the Company from the
grant of an Incentive Stock Option to, or the exercise of an Incentive Stock
Option by, the optionee. Instead, the optionee will recognize gain or loss when
he sells or disposes of the shares transferred to him upon exercise of the
Incentive Stock Option. For purposes of determining such gain or loss, the
optionee's basis in such shares will be his option price. If the date of sale or
disposition of such shares is at least two years after the date of the grant of
the Incentive Stock Option, and at least one year after the transfer of the
shares to him upon exercise of the Incentive Stock Option, the optionee will
realize long-term capital gain treatment upon their sale or disposition.
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<PAGE>
The Company generally will not be allowed a deduction with respect to an
Incentive Stock Option. However, if an optionee fails to meet the foregoing
holding period requirements (a so-called disqualifying disposition), any gain
recognized by the optionee upon the sale or disposition of the shares
transferred to him upon exercise of an Incentive Stock Option will be treated in
the year of such sale or disposition as ordinary income, rather than capital
gain, to the extent of the excess, if any, of the fair market value of the
shares at the time of exercise (or, if less, in certain cases the amount
realized on such sale or disposition) over their option price, and in that case
the Company will be allowed a corresponding deduction.
For purposes of the alternative minimum tax, the amount, if any, by which
the fair market value of the shares transferred to the optionee upon such
exercise exceeds the option price will be included in determining the optionee's
alternative minimum taxable income. In addition, for purposes of such tax, the
basis of such shares will include such excess.
To the extent that the aggregate fair market value (determined at the time
the option is granted) of the stock with respect to which Incentive Stock
Options are exercisable for the first time by the optionee during any calendar
year exceeds $100,000, such options will not be Incentive Stock Options. In this
regard, under existing Internal Revenue Service guidelines, the Company may
designate which shares issued upon exercise of such options are Incentive Stock
Options and which shares are Nonstatutory Stock Options. In the absence of such
designation, a pro rata portion of each share issued is to be treated as issued
pursuant to the exercise of an Incentive Stock Option and the balance of each
share treated as granted pursuant to the exercise of a Nonstatutory Stock
Option.
Recommendation and Required Vote
The affirmative vote of the holders of a majority of the outstanding Common
Shares of the Company present at the Meeting in person or by proxy is required
for approval of this proposal. The Board recommends a vote FOR ratification of
the adoption of the 1999 Stock Option Plan.
PROPOSAL 6: AMENDMENT TO CERTIFICATE OF INCORPORATION
TO REQUIRE UNANIMOUS, RATHER THAN MAJORITY,
WRITTEN CONSENT OF SHAREHOLDERS IN LIEU OF A MEETING
UNDER CERTAIN CIRCUMSTANCES
The Board of Directors of the Company, by unanimous vote, has adopted
resolutions approving and submitting to a vote of the shareholders an amendment
to the Company's Certificate of Incorporation pursuant to which if action is to
be taken by the shareholders of the Company without a meeting, then the written
consent of the holders of all of the shares of capital stock of the Company
entitled to vote on such action will be required. However, if the action has
been authorized by the Board of Directors, then the action may be taken by the
written consent of the holders of not less than a majority of the shares of
capital stock entitled to vote on such action.
This amendment, if adopted, would have the effect of narrowing the
provisions of Section 228 of the Delaware General Corporation Law ("Section
228"). Section 228 permits the taking of action by shareholders without a
meeting if, among other things, a written consent or consents to the action are
signed by shareholders holding the minimum number of shares that would be
necessary to authorize the action at an actual meeting at which all shares
entitled to vote on the matter were present and voted. The proposed amendment to
the Company's Certificate of Incorporation would require the written consent of
all of the shareholders, unless the action has been authorized by the Board of
Directors.
The purpose of the provision is to require, in practical effect, that
shareholder proposals that are not authorized by the Board of Directors be
approved only following the opportunity for a full discussion of the matter at a
meeting of shareholders. The proposal is also intended to reduce the
vulnerability of the Company to takeovers by other corporations, groups, or
individuals, which in the judgment of the Board of Directors may not be in the
best interest of the shareholders. Persons seeking control in a hostile takeover
attempt would be deterred since, following their acquisition of such control,
they would not be in a position to remove the then incumbent directors of the
Company until the next annual meeting of shareholders. Management is not
presently aware of any threat of a tender offer or other means of acquiring
control of the Company. Shareholder approval of this proposal is a condition to
the inclusion of the same provision in the Company's By-Laws (see "Amended and
Restated By-Laws").
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Although the objectives of the proposed amendment are desirable,
shareholders should note that there are certain disadvantages stemming from it.
One disadvantage is that the provision could have the effect of deterring a
future takeover attempt which a majority of the shareholders may deem to be in
their best interests or where the shareholders may receive a substantial premium
for their shares over market value. The provision may also make it less likely
that incumbent management will be replaced even though a majority of the
shareholders may deem it desirable. Also, the provision might tend to encourage
persons seeking control of the Company to negotiate terms of the proposed
acquisition with the Company's Board of Directors which may impose an
unavoidable conflict of interest for some members of the Board of Directors. For
example, they may be confronted with the prospect of losing their positions on
the Board of Directors or as officers of the Company if the transaction is
consummated, yet the terms of the proposed transaction may be favorable to
shareholders. Additionally, a determined tender offeror may elect to proceed
with his offer, but the price offered to shareholders may be lower than would be
the case if the proposed provision was not in effect.
Recommendation and Required Vote
The affirmative vote of the holders of a majority of the outstanding Common
Shares of the Company is required for approval of this proposal. The Board
recommends a vote FOR approval of the proposed amendment to the Certificate of
Incorporation.
PROPOSAL 7: AMENDED AND RESTATED BY-LAWS
The Board of Directors has approved and adopted, subject to shareholder
approval, amended and restated By-Laws for the Company (the "By-Laws") in order
to conform to provisions of Delaware law, among other reasons.
The By-Laws will effect several changes in the rights of shareholders of
the Company. Summarized below are certain of the principal changes affecting the
rights of shareholders. This summary does not purport to be a complete statement
of the By-Laws, and is qualified in its entirety by reference to the complete
provisions thereof attached hereto as Exhibit A.
1. Shareholder Proposals (Article II, Section 2). In the event that a
shareholder wishes to make a proposal at a meeting of shareholders, prior notice
is required as discussed in this Proxy Statement under "Shareholder Proposals."
Such prior notice provides the Company with an ample opportunity to evaluate the
shareholder's proposal prior to any vote on the proposal at the meeting.
2. Shareholder Nominees to Board of Directors (Article II, Section 12). In
the event that a shareholder wishes to nominate a person for election to the
Board of Directors, prior notice is required as discussed under "Shareholder
Proposals." Such prior notice provides the Company with an ample opportunity to
evaluate the shareholder's nominee prior to a vote at the meeting.
3. Shareholder Action by Written Consent in Lieu of a Meeting (Article II,
Section 11). Pursuant to Delaware law, unless the Certificate of Incorporation
provides otherwise, whenever a vote of shareholders is required or permitted to
be taken, a meeting and vote of shareholders may be dispensed with if a written
consent is signed by shareholders holding the minimum number of shares that
would be necessary to authorize the action at an actual meeting at which all
shares entitled to vote on the matter were present and voted. As discussed under
"Amendment to Certificate of Incorporation to Require Unanimous, Rather than
Majority, Written Consent of Shareholders in Lieu of a Meeting under Certain
Circumstances," the Company is submitting to a vote of shareholders a proposal
to amend the Company's Certificate of Incorporation with regard to this matter.
In the event the proposed amendment is adopted, the unanimous written consent of
the shareholders to take such action in lieu of a meeting would be required
unless the action has been authorized by the Board of Directors. In the event of
such Board approval, the action could be taken with the written consent of the
holders of a majority of the shares entitled to vote. The Company's By-Laws
contain the same provision. Approval of the proposal to amend the Company's
Certificate of Incorporation is a condition to the inclusion of this provision
in the Company's By-Laws.
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Recommendation and Required Vote
The affirmative vote of the holders of a majority of the outstanding Common
Shares of the Company present at the Meeting in person or by proxy is required
for approval of this proposal. The Board recommends a vote FOR the approval of
the amended and restated By-Laws.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Grant Thornton LLP has served as the Company's independent certified public
accountants since the fiscal year ended October 31, 1986. The Board of Directors
has selected Grant Thornton LLP to continue as the Company's independent
certified public accountants with respect to the fiscal year ending October 31,
1999. It is not expected that a representative from Grant Thornton LLP will
attend the Meeting.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the Company's next Annual
Meeting of Shareholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission, promulgated under the Securities Exchange
Act of 1934 (the "Exchange Act"), must be received at the offices of Navtech in,
Waterloo, Ontario, Canada by August 20, 2000 for inclusion in the Company's
Proxy Statement and form of proxy relating to such meeting. The Company,
however, intends to hold its next annual meeting earlier in 2000 than such date.
Accordingly, the Company suggests that shareholder proposals intended to be
presented at the next annual meeting be submitted well in advance of February
25, 2000, the earliest date upon which the Company anticipates the Proxy
Statement and form of proxy relating to such meeting will be released to
shareholders.
The following requirements with respect to shareholder proposals and
shareholder nominees to the Board of Directors are included in the Company's
By-Laws.
1. Shareholder Proposals. For a proposal to be properly brought before an
annual meeting by a shareholder of the Company, the shareholder must have given
timely notice thereof to the Secretary of the Company. To be timely, such
proposals must be received by the Secretary of the Company at the principal
executive offices of the Company on a date which is not less than 60 days nor
more than 90 days prior to the date which is one year from the date of the
mailing of the Proxy Statement for the prior year's annual meeting of
shareholders. If during the prior year the Company did not hold an annual
meeting, or if the date of the meeting for which a shareholder intends to submit
a proposal has changed more than 30 days from the date of the meeting in the
prior year, then such notice must be received a reasonable time before the
Company mails the Proxy Statement for the current year. A shareholder's notice
must set forth as to each matter the shareholder proposes to bring before the
annual meeting certain information regarding the proposal, including (a) a brief
description of the business desired to be brought before the meeting and the
reasons for conducting such business at such meeting; (b) the name and address
of such shareholder proposing such business; (c) the class and number of shares
of the Company which are beneficially owned by such shareholder; and (d) any
material interest of such shareholder in such business. No business proposed by
a shareholder shall be conducted at an annual meeting except in accordance with
these procedures. These requirements are separate from and in addition to the
requirements a shareholder must meet to have a proposal included in the
Company's Proxy Statement.
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2. Shareholder Nominees. In order for persons nominated to the Board of
Directors, other than those persons nominated by or at the direction of the
Board of Directors, to be qualified to serve on the Board of Directors, such
nomination must be made pursuant to timely notice in writing to the Secretary of
the Company. To be timely, a shareholder's notice must be received at the
principal executive offices of the Company not less than 60 days nor more than
90 days prior to the meeting; provided, however, that, in the event that less
than 70 days' notice of the date of the meeting is given to shareholders and
public disclosure of the meeting date, pursuant to a press release, is either
not made or is made less than 70 days prior to the meeting date, then notice by
the shareholder to be timely must be so received not later than the close of
business on the tenth day following the earlier of (a) the day on which such
notice of the date of the meeting was mailed to shareholders or (b) the day on
which such public disclosure was made. The shareholder filing the notice of
nomination must describe various matters, including such information as (a) the
name, age, business and residence addresses, occupation or employment and shares
held by the nominee; (b) any other information relating to such nominee required
to be disclosed in a Proxy Statement; and (c) the name, address and shares held
by the shareholder.
Any notice given pursuant to the foregoing requirements must be sent to the
Secretary of the Company at c/o Navtech Systems Support Inc., 175 Columbia
Street West, Suit 102, Waterloo, Ontario, Canada, N2L 5Z5. The foregoing is only
a summary of the provisions of the By-Laws of the Company that relate to
shareholder proposals and shareholder nominations for director. A complete copy
of the By-Laws is attached to this Proxy Statement as Exhibit A.
OTHER BUSINESS
While the accompanying Notice of Annual Meeting of Shareholders provides
for the transaction of such other business as may properly come before the
Meeting, the Company has no knowledge of any matters to be presented at the
Meeting other than those listed as Proposals 1 through 7 in the notice. However,
the enclosed proxy gives discretionary authority in the event that any other
matters should be presented.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
This Proxy Statement is accompanied by a copy of the Company's Annual
Report on Form 10-KSB for the fiscal year ended October 31, 1998, as amended
(the "1998 Form 10-KSB"), and Quarterly Report on Form 10-QSB for the period
ended July 31, 1999 (the "July 31, 1999 Form 10-QSB").
The following information from the Company's 1998 Form 10-KSB (File No.
0-15362), as filed with the Securities and Exchange Commission (the "SEC")
pursuant to Section 13 or 15(d) of the Exchange Act, is hereby incorporated by
reference into this Proxy Statement:
(i) "Management's Discussion and Analysis or Plan of Operation,"
included in Item 6 thereof;
(ii) the consolidated financial statements of the Company as of
October 31, 1998 and for the years ended October 31, 1997 and
1998, included in Item 7 thereof; and
(iii)"Changes in and Disagreements with Accountants," included in
Item 8 thereof.
The following additional information from the Company's July 31, 1999 Form
10-QSB (File No. 0-15362), as filed with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act, is hereby incorporated by reference into this Proxy
Statement:
(i) the consolidated financial statements of the Company as of July
31, 1999 and for the nine months ended July 31, 1998 and 1999,
included in Item 1 of Part I thereof; and
(ii) "Management's Discussion and Analysis or Plan of Operation,"
included in Item 2 of Part I thereof.
Any statement contained in a document incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this Proxy
Statement to the extent that a statement contained herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Proxy
Statement.
Denis L. Metherell
Secretary
Waterloo, Ontario
December 17, 1999
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COMPUFLIGHT, INC.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Denis L. Metherell and Duncan Macdonald
as proxies, each with the power to appoint his substitute, and hereby authorizes
them, and each of them, to represent and vote, as designated below, all the
Common Shares of Compuflight, Inc. (the "Company") held of record by the
undersigned at the close of business on December 15, 1999 at the Annual Meeting
of Shareholders to be held on January 14, 2000 or any adjournment thereof.
1.Election of Directors:
FOR all nominees listed below WITHHOLD AUTHORITY to vote
(except as marked to the contrary) for all nominees listed below
(Instruction: To withhold authority to vote for any individual nominee,
strike such nominee's name from the list below.)
Russell K. Thal Duncan Macdonald Dorothy A. English
Denis L. Metherell Kenneth M. Snyder
2.Proposal to amend the Company's Certificate of Incorporation to change the
name of the Company to "Navtech, Inc."
FOR ____ AGAINST ____ ABSTAIN ____
3.Proposal to amend the Company's Certificate of Incorporation to increase the
number of authorized Common Shares from 2,500,000 to 10,000,000.
FOR ____ AGAINST ____ ABSTAIN ____
4.Proposal to amend the Company's Certificate of Incorporation to decrease the
number of authorized Preferred Shares from 10,000,000 to 2,000,0000.
FOR ____ AGAINST ____ ABSTAIN ____
5.Proposal to ratify the adoption of the Company's 1999 Stock Option Plan.
FOR ____ AGAINST ____ ABSTAIN ____
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6.Proposal to amend the Company's Certificate of Incorporation to provide that,
under certain circumstances, if action is to be taken by the shareholders of the
Company without a meeting, then the written consent of the holders of all of the
shares of capital stock of the Company entitled to vote on such action will be
required.
FOR ____ AGAINST ____ ABSTAIN ____
7.Proposal to approve and adopt amended and restated By-Laws for the Company.
FOR ____ AGAINST ____ ABSTAIN ____
8.In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed by
the undersigned shareholder. If no direction is made, this proxy will be voted
FOR the election of the named nominees as directors and FOR Proposals 2, 3, 4,
5, 6 and 7.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Please sign exactly as name
appears below. When shares
are held by joint tenants,
both should sign. When
signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such. If
a corporation, please sign
in full corporate name by
the President or other
authorized officer. If a
partnership, please sign in
partnership name by
authorized person.
Dated:
----------, --------
Signature:
-----------------
Signature if held jointly
-----------------
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APPENDIX A
COMPUFLIGHT, INC.
BY-LAWS
ARTICLE I
OFFICES
Section 1. The principal office of the corporation in the State of
Delaware shall be in the City of Wilmington, County of New Castle.
Section 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders shall be held at such time
and place as may be fixed from time to time by the board of directors of the
corporation.
Section 2. Annual meetings of stockholders shall be held for the
election of directors of the corporation. At such annual meeting, the
stockholders shall elect a board of directors by a plurality vote (as provided
in Section 10 of this Article II), and shall transact such other business as may
properly be brought before the meeting. To be properly brought before an annual
meeting, business must be (a) specified in the notice of meeting (or any
supplement thereto) given by, at the direction of or upon authority granted by
the board of directors, (b) otherwise brought before the meeting by, at the
direction of or upon authority granted by the board of directors, or (c) subject
to Section 12 hereof, otherwise properly brought before the meeting by a
stockholder. For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the secretary of the corporation. To be timely, a stockholder's notice must be
received at the principal executive offices of the corporation not less than 60
days nor more than 90 days prior to the date which is one year from the date of
the mailing of the corporation's Proxy Statement for the prior year's annual
meeting of stockholders. If during the prior year the corporation did not hold
an annual meeting, or if the date of the meeting for which a stockholder intends
to submit a proposal has changed more than 30 days from the date of the meeting
in the prior year, then such notice must be received a reasonable time before
the corporation mails the Proxy Statement for the current year.
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A stockholder's notice to the secretary must set forth as to
each matter the stockholder proposes to bring before the annual meeting (a) a
brief description of the business desired to be brought before the annual
meeting, and the reasons for conducting such business at the annual meeting, (b)
the name and address, as they appear on the corporation's books, of the
stockholder proposing such business, (c) the class and number of shares of the
corporation which are beneficially owned by the stockholder, and (d) any
material interest of the stockholder in such business. Notwithstanding anything
in the By-Laws to the contrary, but subject to Section 12 hereof, no business
shall be conducted at an annual meeting except in accordance with the procedures
set forth in this Section 2. The chairman of an annual meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
Section 2, and, if he should so determine, he shall so declare to the meeting,
and any such business not properly brought before the meeting shall not be
transacted.
Section 3. Written notice of the annual meeting shall be given to each
stockholder entitled to vote thereat not less than ten nor more than 60 days
before the date of the meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every election of
directors, a complete list of the stockholders entitled to vote at said
election, arranged in alphabetical order, showing the address and number of
shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, during ordinary business hours, for a period
of at least ten days prior to the election, either at a place within the city,
town or village where the election is to be held and which place shall be
specified in the notice of the meeting, or, if not specified, at the place where
said meeting is to be held, and the list shall be produced and kept at the time
and place of election during the whole time thereof, and subject to the
inspection of any stockholder who may be present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, shall be called by the secretary of the corporation at the
request in writing of a majority of the entire board of directors. Such request
shall state the purpose or purposes of the proposed meeting.
Section 6. Written notice of a special meeting of stockholders, stating
the time, place and purposes thereof, shall be given to each stockholder
entitled to vote thereat, not less ten nor more than 60 days before the date
fixed for the meeting.
Section 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
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Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which, by express provision of a statute, the
by-laws or the certificate of incorporation, a different vote is required in
which case such express provision shall govern and control the decision of such
question.
Section 10. Except as provided in the certificate of incorporation,
each stockholder shall at every meeting of the stockholders be entitled to one
vote in person or by proxy for each share of the capital stock having voting
power held by such stockholder, but no proxy shall be voted on after three years
from its date, unless the proxy provides for a longer period.
Section 11. Whenever the vote of stockholders at a meeting thereof is
required or permitted to be taken in connection with any corporate action by any
provisions of the statutes or of the certificate of incorporation, the meeting
and vote of stockholders may be dispensed with, if all the stockholders who
would have been entitled to vote upon the action if such meeting were held shall
consent in writing to such corporate action being taken unless such action has
been authorized by the board of directors, in which event such action may be
taken by the written consent of the holders of not less than a majority of the
shares of capital stock entitled to vote upon such action.
Section 12. Only persons who are nominated in accordance with the
procedures set forth in this Section 12 shall be qualified for election as
directors. Nominations of persons for election to the board of directors of the
corporation may be made at a meeting of stockholders by or at the direction of
the board of directors or by any stockholder of the corporation entitled to vote
for the election of directors at the meeting who complies with the procedures
set forth in this Section 12. In order for persons nominated to the board of
directors, other than those persons nominated by or at the direction of the
board of directors, to be qualified to serve on the board of directors, such
nomination shall be made pursuant to timely notice in writing to the secretary
of the corporation. To be timely, a stockholder's notice must be received at the
principal executive offices of the corporation not less than 60 days nor more
than 90 days prior to the meeting; provided, however, that, in the event that
less than 70 days' notice of the date of the meeting is given to stockholders
and public disclosure of the meeting date, pursuant to a press release, is
either not made or is made less than 70 days prior to the meeting date, then
notice by the stockholder to be timely must be so received not later than the
close of business on the tenth day following the earlier of (a) the day on which
such notice of the date of the meeting was mailed to stockholders or (b) the day
on which such public disclosure was made.
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A stockholder's notice to the secretary must set forth (a) as
to each person whom the stockholder proposes to nominate for election or
re-election as a director (i) the name, age, business address and residence
address of such person, (ii) the principal occupation or employment of such
person, (iii) the class and number of shares of the corporation which are
beneficially owned by such person and (iv) any other information relating to
such person that is required to be disclosed in solicitation of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
from time to time (including, without limitation, such documentation as is
required by Regulation 14A to confirm that such person is a bona fide nominee);
and (b) as to the stockholder giving the notice (i) the name and address, as
they appear on the corporation's books, of such stockholder and (ii) the class
and number of shares of the corporation which are beneficially owned by such
stockholder. At the request of the board of directors, any person nominated by
the board of directors for election as a director shall furnish to the secretary
of the corporation that information required to be set forth in a stockholder's
notice of nomination which pertains to the nominee. No person shall be qualified
for election as a director of the corporation unless nominated in accordance
with the procedures set forth in this Section 12. The chairman of the meeting
shall, if the facts warrant, determine and declare to the meeting that a
nomination was not made in accordance with procedures prescribed by the By-Laws,
and, if he should so determine, he shall so declare to the meeting, and the
defective nomination shall be disregarded.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole
board shall be fixed from time to time by the board of directors of the
corporation. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 2 of this Article, and each director
elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, and the directors so
chosen shall hold office until the next annual election and until their
successors are duly elected and shall qualify, unless sooner displaced.
Section 3. The business of the corporation shall be managed by its
board of directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the certificate of
incorporation or by these by-laws directed or required to be exercised or done
by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
25
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Section 5. The first meeting of each newly elected board of directors
shall be held immediately following the close of the annual meeting of
stockholders at the place of the holding of said annual meeting. No notice of
any such meeting shall be necessary to the newly elected directors in order
legally to constitute the meeting, provided a quorum shall be present. In the
event such meeting is not held at such time and place, the meeting may be held
at such time and place as shall be specified in a notice given as hereinafter
provided for special meetings of the board of directors, or as shall be
specified in a written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.
Section 7. Special meetings of the board of directors may be called by
the chairman of the board, the chief executive officer or the president on one
(1) day's notice to each director, either personally, by overnight mail, by
telegram, by telecopier or by telephone. For purposes hereof, one (1) day's
notice shall be satisfied by the delivery of such notice as shall result in the
director receiving notice by 5:00 p.m., New York City time, on the day
immediately preceding the date of the meeting (provided that the time of the
meeting is no earlier than 8:00 a.m., New York City time).
Section 8. At all meetings of the board, a majority of the directors
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors. If a quorum shall not be present at
any meeting of the board of directors, the directors present thereat may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation or these by-laws, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if prior to such action a written consent thereto is signed
by all members of the board or such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the board or
committee.
COMMITTEES OF DIRECTORS
Section 10. The board of directors, by resolution adopted by a majority
of the entire board, may designate from among its members an executive committee
and other committees, which committees shall serve at the pleasure of the board
of directors. The board of directors may designate one or more directors as
alternate members of any such committee, who may replace any absent member or
members of such committee. The board of directors, by resolution adopted by a
majority of the entire board, may remove a member of any such committee with or
without cause. To the extent provided in said resolution and to the extent
permitted by the laws of the State of Delaware, each such committee shall have
and may exercise the powers of the board of directors.
Section 11. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
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COMPENSATION OF DIRECTORS
Section 12. The directors may be paid their expenses, if any, of
attendance at each meeting of the board of directors and may be paid a fixed sum
for attendance at each meeting of the board of directors and such salary or
other compensation as directors, as the board by resolution may determine. No
such payment shall preclude any director from serving the corporation in any
other capacity and receiving compensation therefor. Members of special or
standing committees may be allowed like compensation for attending committee
meetings.
ARTICLE IV
NOTICES
Section 1. Except as provided for herein, notices to directors and
stockholders shall be in writing and delivered personally or mailed to the
directors or stockholders at their addresses appearing on the books of the
corporation.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated herein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board
of directors and shall be a chairman of the board, a chief executive officer, a
president or chief operating officer, a secretary and a treasurer. The board of
directors may also choose a chief financial officer, a chief technology officer,
and one or more executive vice-presidents, vice-presidents, assistant
secretaries and assistant treasurers. Two or more offices may be held by the
same person.
Section 2. The board of directors, at its first meeting after each
annual meeting of stockholders, shall choose a chairman of the board, a chief
executive officer, a president or chief operating officer, a secretary and a
treasurer, none of whom need be a member of the board.
Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 4. The salaries of all officers of the corporation shall be
fixed by the board of directors.
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Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by the
board of directors may be removed at any time by the board of directors. Any
vacancy occurring in any office of the corporation shall be filled by the board
of directors.
CHAIRMAN OF THE BOARD
Section 6. The chairman of the board of directors shall preside at all
meetings of the board of directors and stockholders; shall be ex-officio a
member of all standing committees; and shall perform such other duties as from
time to time may be assigned to him by the board of directors.
CHIEF EXECUTIVE OFFICER
Section 7. The chief executive officer shall have general supervision
and control over the business, management and finances of the corporation,
subject to the control of the board of directors, and shall see that all orders
and resolutions of the board are carried into effect.
PRESIDENT OR CHIEF OPERATING OFFICER
Section 8. The president or chief operating officer shall have general
supervision and control over the day-to-day business and management of the
corporation, subject to the control of the chief executive officer and the board
of directors, and shall see that all orders and resolutions of the board are
carried into effect.
EXECUTIVE VICE-PRESIDENTS
Section 9. The executive vice-president, or, if there shall be more
than one, the executive vice-presidents in the order determined by the board of
directors, shall generally assist the president or chief operating officer in
the management of the day-to-day business and affairs of the corporation and, in
the absence or disability of the president or chief operating officer, shall
perform the duties and exercise the powers of the president or chief operating
officer, and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
VICE-PRESIDENTS
Section 10. The vice-president, or if there shall be more than one, the
vice-presidents in the order determined by the board of directors, shall, in the
absence or disability of the executive vice-president, perform the duties and
exercise the powers of the executive vice-presidents, and shall perform such
other duties and have such other powers as the board of directors may from time
to time prescribe.
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CHIEF FINANCIAL OFFICER
Section 11. The chief financial officer shall have general supervision
and control over the day-to-day finances of the corporation, subject to the
control of the chief executive officer and the board of directors, and shall see
that all orders and resolutions of the board are carried into effect.
CHIEF TECHNOLOGY OFFICER
Section 12. The chief technology officer shall have general supervision
and control over the business and management of the corporation with respect to
technology matters, subject to the control of the president or chief operating
officer and the board of directors, and shall see that all orders and
resolutions of the board are carried into effect.
SECRETARY AND ASSISTANT SECRETARIES
Section 13. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors, under
whose supervision he shall be. He shall keep in safe custody the seal of the
corporation and, when authorized by the board of directors, affix the same to
any instrument requiring it and, when so affixed, it shall be attested by his
signature or by the signature of an assistant secretary.
Section 14. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors, shall,
in the absence or disability of the secretary, perform the duties and exercise
the powers of the secretary and shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
TREASURER AND ASSISTANT TREASURERS
Section 15. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books and belongings to the corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
corporation in such depositories as may be designated by the board of directors.
Section 16. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the chief executive officer, the president or
chief operating officer, the chief financial officer, and the board of
directors, at its regular meetings, or when the board of directors so requires,
an account of all his transactions as treasurer and of the financial condition
of the corporation.
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Section 17. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 18. The assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the board of directors,
shall, in the absence or disability of the treasurer, perform the duties and
exercise the powers of the treasurer and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
ARTICLE VI
CERTIFICATE OF STOCK
Section 1. Every holder of stock in the corporation shall be entitled
to have a certificate, signed by, or in the name of the corporation by, the
chairman of the board, the president, an executive vice-president or a
vice-president and by the treasurer or an assistant treasurer, or the secretary
or an assistant secretary of the corporation, certifying the number of shares
owned by him in the corporation.
Section 2. Where a certificate is signed (a) by a transfer agent or an
assistant transfer agent or (b) by a transfer clerk acting on behalf of the
corporation and a registrar, the signature of any such chairman of the board,
president, executive vice-president, vice-president, treasurer, assistant
treasurer, secretary or assistant secretary may be facsimile. In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on, any such certificate or certificates shall cease to be such
officer or officers of the corporation, whether because of death, resignation or
otherwise, before such certificate or certificates have been delivered by the
corporation, such certificate or certificates may nevertheless be adopted by the
corporation and be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to be such officer or officers
of the corporation.
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LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost or destroyed. When authorizing such issue of a
new certificate or certificates, the board of directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.
TRANSFERS OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
CLOSING OF TRANSFER BOOKS; RECORD DATE
Section 5. The board of directors may close the stock transfer books of
the corporation for a period not exceeding 60 days preceding the date of any
meeting of stockholders or the date for payment of any dividend or the date for
the allotment of rights or the date when any change or conversion or exchange of
capital stock shall go into effect or for a period of not exceeding 60 days in
connection with obtaining the consent of stockholders for any purpose. In lieu
of closing the stock transfer books as aforesaid, the board of directors may fix
in advance a date, which date shall not be more than 60 nor less than ten days
preceding the date of any meeting of stockholders, or the date for the payment
of any dividend, or the date for the allotment of rights, or the date when any
change or conversion or exchange of capital stock shall go into effect, or a
date in connection with obtaining such consent, as a record date for the
determination of the stockholders entitled to notice of, and to vote at, any
such meeting, and any adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of capital stock, or to give
such consent, and in such case such stockholders and only such stockholders as
shall be stockholders of record on the date so fixed shall be entitled to such
notice of, and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
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ARTICLE VII
FINANCIAL MATTERS
CONTRACTS
Section 1. The Board of Directors, except as these By-Laws otherwise
provide, may authorize any officer or officers, agent or agents, to execute and
deliver any contract on behalf of the corporation, and such authority may be
general or confined to specific instances.
LOANS
Section 2. Any two of the officers of the corporation as may from time
to time be designated for such purpose by the Board of Directors, or any two
officers of the corporation duly authorized by the Board of Directors with
respect to a particular loan or advance, acting together, may effect loans and
advances at any time for the corporation from any bank, trust company or other
institution, or from any firm or individual, and for such loans and advances may
make, execute and deliver promissory notes and other evidences of indebtedness
of the corporation. No property whatever owned or held by the corporation shall
be pledged, hypothecated or transferred as security for loans and advances
except by two officers of the corporation, acting together, who shall have been
designated for such purpose by the Board of Directors, or by any two officers
thereunto duly authorized by the Board of Directors with respect to a particular
loan or advance.
CHECKS AND DRAFTING
Section 3. All checks, drafts, orders for the payment of money, bills
of lading, warehouse receipts, obligations, bills of exchange, insurance
certificates and all endorsements (except endorsements for collections for the
account of the corporation or for deposit to its credit) shall be signed by such
officer or officers, employee or employees, of the corporation or by facsimile
signature of such officer or officers, employee or employees, of the corporation
as shall from time to time be determined by resolution of the Board of
Directors.
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DEPOSITS
Section 4. All funds of the corporation, unless otherwise authorized
and directed by a resolution of the Board of Directors duly recorded in the
minutes of the meetings of the Board of Directors, shall be deposited from time
to time to the credit of the corporation in such banks, trust companies or other
depositories as the Board of Directors may elect or as may be selected by any
officer or officers, agent or agents, of the corporation to whom such power may
from time to time be delegated by the Board of Directors; and for the purpose of
such deposit, checks, drafts and other orders for payment of money which are
payable to the order of the corporation may be endorsed, assigned and delivered
by the chief executive officer, president or chief operating officer, or an
executive vice-president, or a vice-president, or the treasurer or an assistant
treasurer, or the secretary or an assistant secretary, or by any agent or
employee of the corporation to whom any of said officers, in writing, or the
Board of Directors, by resolution, shall have delegated such power.
BANK ACCOUNTS
Section 5. The Board of Directors may from time to time authorize the
opening and keeping with such banks, trust companies or other depositories as
the Board may select of general and specific bank accounts, and may make such
special rules and resolutions with respect thereto, not inconsistent with the
provisions of these By-Laws, as it may deem expedient.
DIVIDENDS
Section 6. Dividends upon the capital stock of the corporation, subject
to the provisions of the certificate of incorporation, if any, may be declared
by the board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
Section 7. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 8. The board of directors shall present at each annual meeting,
and at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
FISCAL YEAR
Section 9. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
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ARTICLE VIII
GENERAL PROVISIONS
SEAL
Section 1. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
INDEMNIFICATION
Section 2. The corporation shall to the full extent permitted by
Section 145 of the Delaware General Corporation Law, as amended from time to
time, indemnify all persons whom it may indemnify pursuant thereto. The
indemnifications authorized hereby shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under or through
any agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in the official capacity of those seeking indemnification and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such
persons. The corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of Section 145.
ARTICLE IX
AMENDMENTS
Section 1. These by-laws may be altered or repealed (a) at any regular
meeting of the stockholders or of the board of directors, (b) at any special
meeting of the stockholders or of the board of directors if notice of such
alteration or repeal be contained in the notice of such special meeting or (c)
by unanimous written consent of the stockholders or board of directors.
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