NAVTECH, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 13, 2000
To the Shareholders
of NAVTECH, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of NAVTECH, INC., a Delaware corporation ("Navtech"), will be held in
Salon B of the Best Western St. Jacob's Country Inn, located at 50 Benjamin
Road, Waterloo, Ontario, Canada, on Thursday, July 13, 2000 at 1:00 p.m., local
time, for the following purposes:
(1) To elect a board of six directors.
(2) To transact such other business as may properly come before the
Meeting.
Only shareholders of record at the close of business on May 31, 2000 are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
Denis L. Metherell
Secretary
June 15, 2000
================================================================================
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 NAVTECH, 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.
================================================================================
<PAGE>
NAVTECH, INC.
PROXY STATEMENT
This Proxy Statement is being mailed on or about June 15, 2000, to all
shareholders of record of Navtech, Inc. (the "Company" or "Navtech") at the
close of business on May 31, 2000, 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 Thursday, July 13, 2000, in Salon B 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 with respect to the
election of directors in accordance with the specifications made in such
proxies. In the absence of specified instructions, proxies so received will be
voted FOR the named nominees to the Company's Board of Directors.
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 Navtech
(the "Common Shares") outstanding as of May 31, 2000 was 2,651,980. Each Common
Share is entitled to one non-cumulative vote. The Common Shares are the only
class of securities of Navtech entitled to vote. A majority of the Common Shares
outstanding and entitled to vote as of May 31, 2000, or 1,325,991 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 May 31, 2000 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 six 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.
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 Navtech 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-Canada"), 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. Navtech
will bear the cost of the solicitation of proxies 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
Navtech 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-Canada'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
Summary Compensation Table
The following table sets forth certain information concerning the
compensation of all executive officers of the Company as of October 31, 1999 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, 1999:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
Awards Payouts
-------------------------------------------------------------------------------------------------------------
Common
Name and Restricted Stock
Principal Other Annual Stock Underlying LTIP All Other
Position Year Salary Bonus Compensation Award(s) Options Payouts Compensation
-------------------------------------------------------------------------------------------------------------
Duncan
Macdonald, 1999 $ 5,000 $20,000 $ 28,927(1) -0- -0- -0- -0-
Chief 1998 -0- -0- $106,486(1) -0- -0- -0- -0-
Executive 1997 -0- -0- $118,826(1) -0- -0- -0- -0-
Officer
-------------------------------------------------------------------------------------------------------------
Russell K. 1999 $148,780 -0- $ 14,800(2)(3) -0- -0- -0- -0-
Thal, 1998 $143,683 -0- $ 14,800(2)(3) -0- -0- -0- -0-
Chairman 1997 $139,526 -0- $ 14,800(2)(3) -0- -0- -0- -0-
-------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents amounts paid as an independent advisor to the Company.
Excludes amounts paid to Kintyre and Company Limited, an entity
controlled by Mr. Macdonald, for consulting services rendered to
Navtech-Canada. 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.
Option Grants Table
The following table sets forth certain information with regard to the
grants of stock options during the fiscal year ended October 31, 1999 to the
persons named in the above Summary Compensation Table:
<TABLE>
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
Shares of Percent of
Common Stock Total Options
Underlying Granted to Exercise
Options Employees in Price/ Expiration
Name Granted Fiscal Year Share Date
----------------------------------------------------------------------------------------------------------
Duncan Macdonald -0- -0- N/A N/A
----------------------------------------------------------------------------------------------------------
Russell K. Thal -0- -0- N/A N/A
----------------------------------------------------------------------------------------------------------
</TABLE>
Fiscal Year-End Option Value Table
The following table sets forth certain information concerning the value
as of October 31, 1999 of unexercised options held by the persons named in the
above Summary Compensation Table:
<TABLE>
<S> <C> <C>
----------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Options at In-the-Money Options
October 31, 1999 at October 31, 1999
Name Exercisable/Unexercisable Exercisable/Unexercisable
----------------------------------------------------------------------------------------------------------
Duncan Macdonald -0-/ 200,000 -0-/-0-
----------------------------------------------------------------------------------------------------------
Russell K. Thal 75,938/-0- -0-/-0-
----------------------------------------------------------------------------------------------------------
</TABLE>
No options were exercised by either of the named persons during the fiscal year
ended October 31, 1999.
<PAGE>
Compensation of Directors
The By-Laws of the Company 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. No Directors' fees
have been paid to date. The 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 a certain Employment Agreement between the Company and Mr. Macdonald.
Mr. Thal was employed by the Company pursuant to an employment
agreement, as amended (the "Thal Employment Agreement"), which expired on July
31, 1999 (the "Expiration Date") and provided for a minimum annual salary of
$125,000 effective December 1, 1993, with annual cost of living increases.
Effective August 25, 1999, with a commencement date of August 5, 1999, the
Company entered into a retirement agreement (the "Retirement Agreement") with
Mr. Thal. The Retirement Agreement replaces the Thal 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 the payment of $600,000 in 96 semimonthly
payments commencing after Mr. Thal's retirement.
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 prepay 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.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
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 May
31, 2000 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 Approximate
Owner Number of Shares Beneficially Owned Percentage of
Outstanding Shares
----------------------------------------------------------------------------------------------------------
Dorothy A. English 1,257,766(1)(2)(3) 43.3%
175 Columbia Street West
Waterloo, Ontario,
Canada
----------------------------------------------------------------------------------------------------------
Robert N. Snyder 665,000(4) 23.9%
7200 Wisconsin Avenue
Suite 601
Bethesda, Maryland
----------------------------------------------------------------------------------------------------------
Duncan Macdonald 477,503(5) 15.3%
275 Slater Street
Ottawa, Ontario,
Canada
----------------------------------------------------------------------------------------------------------
Kenneth M. Snyder 350,000(6) 11.7%
1751 Westwood Drive
Minden, Nevada
----------------------------------------------------------------------------------------------------------
St. Andrews Capital Limited 277,503(5) 9.5%
Partnership
300 Glenwood Circle, #129
Monterey, California
----------------------------------------------------------------------------------------------------------
Republic Electronics Corporation 250,000(7) 9.4%
5801 Lee Highway
Arlington, VA
----------------------------------------------------------------------------------------------------------
Denis L. Metherell 156,000 5.9%
175 Columbia Street West
Waterloo, Ontario,
Canada
----------------------------------------------------------------------------------------------------------
Russell K. Thal 17,875(8) 0.7%
26 Ridge Drive
Port Washington, NY
----------------------------------------------------------------------------------------------------------
All executive officers and
directors as a group (7 persons) 2,299,144(1)(5)(6)(8) 61.6%
----------------------------------------------------------------------------------------------------------
</TABLE>
* Less than 1%
(1) Represents (i) 802,766 shares beneficially owned by Navtech Applied
Research Inc. ("NARI") (see footnote (3) below), (ii) 205,000 shares
beneficially owned by Ms. English and (iii) 250,000 shares that are
issuable to Ms. English upon exercise of options that are currently
exercisable.
(2) Such person may be deemed a parent of the Company.
(3) The Company has been advised that Ms. English is the Chairman, Chief
Executive Officer and sole shareholder of NARI. Furthermore, the Company
has been advised that the 802,766 shares owned by NARI 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) Based upon Schedule 13D filed with the Securities and Exchange Commission.
Includes (i) 125,000 shares that are issuable upon the exercise of a
warrant that is currently exercisable and (ii) 40,000 shares owned by
Cambridge Information Group, of which Mr. Snyder is the majority
stockholder and Chairman of the Board of Directors.
(5) Represents 200,000 shares that are issuable to Mr. Macdonald upon exercise
of options that are currently exercisable and, as discussed in "Certain
Relationships and Transactions", a maximum of 277,503 shares issuable to
St. Andrews Capital Limited Partnership, an entity controlled by Mr.
Macdonald, pursuant to the terms of a convertible loan made by such entity
to the Company.
(6) Represents shares issuable upon exercise of options that are currently
exercisable.
(7) Based upon Schedule 13G filed with the Securities and Exchange Commission.
(8) Includes 17,563 shares owned by Mr. Thal 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.
<PAGE>
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; Indebtedness
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 on June 29, 1998, as
discussed above, and RE&A and NARI merged, the voting trust agreement was
terminated and the shares returned to NARI. Concurrently with the share transfer
to Ms. English, NARI executed a promissory note to Raymond English in the
original principal amount of $600,000 Canadian (the "NARI Note") evidencing
amounts owed by NARI to Mr. English. Pursuant to the NARI Note, NARI is
obligated to make 120 consecutive monthly payments of $5,000 Canadian. NARI has
placed the 802,766 shares in escrow as security for amounts payable by NARI to
Mr. English, and should the payments go into default, Mr. English has the option
to sell the requisite number of shares held in escrow to remedy the default. As
of May 31, 2000, the principal balance of the NARI Note was $376,231 Canadian.
RE&A/Navtech-Canada Transactions
In 1993, Navtech-Canada 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-Canada
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-Canada a promissory note in the principal amount of $750,000 Canadian
(the "RE&A Note") to evidence certain obligations to Navtech-Canada as of such
date. The RE&A Note is payable on July 15, 2000 (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-Canada, RE&A agreed to provide software marketing services to the
Company. Navtech-Canada 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-Canada. As of May 31, 2000, the principal balance of the
RE&A Note was $750,000 Canadian.
Advances
During the fiscal year ending October 31, 1999, the Company made
additional advances to NARI aggregating approximately $263,000, which carry no
repayment terms. For the six months ended April 30, 2000, a further $28,096 was
advanced to NARI.
<PAGE>
Global Weather Dynamics, Inc.
On July 15, 1998, NARI acquired from Global Weather Dynamics, Inc.
("GWDI") all of the assets of GWDI's Weather Services Division ("WSD") for
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 Navtech 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 Navtech 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, Navtech 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. During the fiscal year ended October 31, 1999, $92,000 was payable
pursuant to the License Agreement. Such amount was deducted from amounts owing
to the Company as discussed below. Concurrently with the execution of the
License Agreement, NARI also assigned to Navtech 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 Navtech 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 (the "$134,700 Note"), payable in 36 monthly
installments and bearing interest at the rate of 10% per annum. The note
provides that payments may be made by offsetting royalties due under the
License Agreement. The $134,700 Note has been paid in full.
2. Navtech 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-Canada 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. The note evidencing the loan (the
"$150,000 Note") provides that royalties payable to NARI under the License
Agreement may be used to offset amounts payable to the extent they have not
already been used to repay the $134,700 Note. As of April 30, 2000, the
outstanding principal balance of the $150,000 Note, together with accrued
interest, was $159,921.
4. During the fiscal year ended October 31, 1999, the Company advanced an
additional $112,000 to NARI. The additional advance is repayable commencing
with the payment in full of the $150,000 Note. The note evidencing the
additional advance (the "$112,000 Note") bears interest at a rate of 10%
per annum and is repayable in 22 monthly installments. The $112,000 Note
provides that royalties payable to NARI under the License Agreement may be
used to offset amounts payable to the extent they have not already been
used to repay the $150,000 Note. As of April 30, 2000, the outstanding
principal of the $112,000 Note, together with accrued interest, was
$124,813.
The payment of each of the above NARI notes is secured by the grant of
a security interest in the weather and NOTAMs software acquired by NARI from
GWDI.
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 "Executive Compensation - 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 and of which Mr. Metherell's
wife is the controlling shareholder, leased certain computer equipment to
Navtech-Canada. 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.
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 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 was entitled
to receive a base quarterly fee of $1,250 commencing with the fiscal quarter
ended January 31, 1999. Mr. Macdonald had agreed to make 30% of his working time
available to the Company. The Macdonald Employment Agreement was terminated on
April 30, 2000. Mr. Macdonald continues to serve as the Company's Chief
Executive Officer as provided for below.
Effective January 1, 1999, Navtech-Canada entered into a two year
Services Agreement (the "Kintyre - Navtech-Canada Agreement") with Kintyre &
Company Limited ("Kintyre"), a company controlled by Mr. Macdonald. Under the
Kintyre - Navtech-Canada Agreement, Kintyre had agreed to provide the services
of Mr. Macdonald, as well as other Kintyre staff as needed, to assist
Navtech-Canada in its strategic corporate structuring and corporate finance and
accounting activities. Kintyre was entitled to receive a base monthly fee of
$13,000 Canadian, plus an annual bonus of $8,700 Canadian. Effective April 30,
2000, the base monthly fee was reduced to $11,000 Canadian to account for Mr.
Macdonald's removal from the Agreement.
During the fiscal year ended October 31, 1999, Navtech-Canada paid
approximately $78,000 and $64,000 to Kintyre for the services of Mr. Macdonald
and Mr. Vietze (then Chief Financial Officer of the Company), respectively.
Effective May 1, 2000, Mr. Macdonald joined the staff of Navtech -
Canada as Chief Executive Officer at a base salary of $225,000 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 19.562% per annum, in 22
monthly installments. The repayment of the loan is to be secured by the grant of
a security interest in substantially all of the assets of Navtech-UK and a
pledge of the Navtech-UK shares held by Navtech-Canada.
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, and the repayment of the loan is to be secured by the grant of
a security interest in substantially all of the assets of Navtech-UK and a
pledge of the Navtech-UK stock held by Navtech-Canada. 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. The Company held an annual meeting
of shareholders on January 14, 2000 at which meeting a proposal to increase the
authorized share capital of the Company was approved, thus providing sufficient
share capital to permit such conversion.
As of May 31, 2000, the outstanding principal balance of the loan was
$104,064. Accordingly, such principal amount is convertible, effective June 1,
2000, into 277,503 Common Shares of the Company. Since the loan is to be repaid
in monthly installments, as described above, as installments are paid, the
number of shares issuable upon conversion of the principal amount will be
reduced.
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees
Six 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 Navtech by each nominee for election as director, his age as of May 31,
2000, and the year in which he 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 Navtech Director
-------------------------------------------------------------------------------------------------------------
Thomas D. Beynon 58 - -
-------------------------------------------------------------------------------------------------------------
Prashant Gupta 39 - -
-------------------------------------------------------------------------------------------------------------
Martin J. Hamrogue 59 - -
-------------------------------------------------------------------------------------------------------------
Duncan Macdonald 41 Chairman of the Board of Directors and 1999
Chief Executive Officer
-------------------------------------------------------------------------------------------------------------
James McGinty 57 - -
-------------------------------------------------------------------------------------------------------------
Denis L. Metherell 67 Secretary and Director 1994
-------------------------------------------------------------------------------------------------------------
</TABLE>
Thomas D. Beynon is a partner in the Waterloo law firm of McCarter
Grespan Robson & Beynon and a member of the Law Society of Upper Canada. He has
previously served as Navtech-Canada's Secretary. Mr. Beynon spent sixteen years
with a Canadian national firm, primarily in the areas of commercial, corporate
and finance law with a diverse client base of both public and private Canadian
corporations. He also served on the Board of Waterloo Microsystems Inc. from
1986 to 1990. Mr. Beynon also holds memberships in the Institute of Corporate
Directors and the American Bar Association and he is a founding member and
director of Communitech, a technology association in Southwestern Ontario.
Prashant Gupta is the Chief Technology Officer of CrossWorlds Software
Inc. of Burlingame, California. In addition, Mr. Gupta sits on the Board of
Directors for the Open Architecture Group (OAG), a standards organization, as
well as the Board of Directors for Global Weather Dynamics, Inc., Intyc
Solutions and Wizards. Mr. Gupta has published 8 papers and filed 10 patents in
the areas of networking, telecommunications and database technology. Prior to
joining CrossWorlds, Mr. Gupta was the software architect at Illustra/Informix
where he designed the server interface that provides specialized and
user-defined data type extensibility to Informix's Universal Data Server. During
his tenure at Sybase he served as the chief technical architect for several key
middleware and connectivity projects that established the company as the market
leader in this technology segment. In addition, Mr. Gupta spent four years with
Global Weather Dynamics, Inc. as chief engineer for message switching systems.
Earlier, he designed a core part of the dynamic routing algorithm for the
Cellular Data Inc. data network.
Martin J. Hamrogue is CEO and Chairman of the Board of Virgin Express
Ireland Ltd. ("Virgin"), an airline serving markets throughout Europe. He has
served as Virgin's CEO since its formation in 1998. Prior to Virgin, Mr.
Hamrogue served in various capacities at Trans World Airlines (""TWA"),
including most recently as General Manager Operations Control from 1995 to 1998.
Prior to this position, he served as Director Operations Systems where he was
responsible for all computer and communications systems for TWA's operations
department. In total, Mr. Hamrogue has over 35 years of airline management
experience.
Duncan Macdonald has served as Chairman of the Board of the Company
since January 2000, a director of the Company since December 1999, and Chief
Executive Officer of the Company since March 1996. 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.
James McGinty is the President of Cambridge Information Group ("CIG"),
a corporate holding company managing several text and internet-based information
companies. Mr. McGinty is responsible for the strategic direction and overall
management of all CIG companies. He previously served as President of Cambridge
Scientific Abstracts ("CSA") from 1992 to 2000. Prior to CSA, Mr. McGinty spent
over 20 years with Dun & Bradstreet Corporation. In his last assignment with
D&B, Mr. McGinty was Managing Director of D&B North Pacific with responsibility
for Business Information Group operations in Hong Kong, Korea, Singapore,
Malaysia, The Philippines and China. Mr. McGinty has been active in the
Information Industry Association, serving on IIA's Board of Directors from 1984
to 1988.
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 - Canada
(see "Certain Relationships and Related Transactions"). From 1976 to 1992, Mr.
Metherell served as a technical consultant to Northwest Airlines where he was a
major contributor to the IATA standard computerization Aircraft Performance
specifications. He has also been a standing member of numerous committees with
the FAA, ATA and IATA.
Directors Whose Terms are Expiring
The following table sets forth the positions and offices presently held
with Navtech by each current director whose term is expiring at the Annual
Meeting of Shareholders, his/her age as of May 31, 2000, and the year in which
he/she became a director:
<TABLE>
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
Positions and Offices Year Became
Name Age Presently Held with Navtech Director
-------------------------------------------------------------------------------------------------------------
Dorothy A. English 57 Executive Vice President and Director 1994
-------------------------------------------------------------------------------------------------------------
Kenneth M. Snyder 54 Director 1994
-------------------------------------------------------------------------------------------------------------
Russel K. Thal 65 Director 1981
-------------------------------------------------------------------------------------------------------------
</TABLE>
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-Canada, 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-Canada 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.
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-Canada. 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.
Russell K. Thal, a founder of the Company, served as Chairman of the
Board of the Company from October 1994 to January 2000 and has served as 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.
Committees
The Compensation Committee of the Board of Directors is responsible for
(i) the interpretation of the Company's 1999 Stock Option Plan; (ii)
determinations regarding the timing and amount of option grants to employees
(including officers) and non-employee directors of, and consultants and advisors
to, the Company; and (iii) determinations regarding the amount and form of
compensation to be granted to officers of the Company. The members of the
Compensation Committee currently are Messrs. Macdonald and Metherell.
There are no other committees of the Board of Directors, all other
functions being performed by the Board as a whole. The Board will consider
shareholder recommendations for Board positions which are made in writing to
Navtech's Chief Executive Officer.
Meetings
The Board held four meetings during the fiscal year ended October 31,
1999. Each of Navtech's then directors attended all such meetings, except for
Kenneth Snyder who did not attend one meeting. The Compensation Committee was
not in existence as of October 31, 1999.
Family Relationships
There is no family relationship among any of Navtech'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, 1999, all
Section 16(a) filing requirements applicable to the Company's officers,
directors and 10% shareholders were complied with, except that Derek Dawson and
David Strucke, officers of the Company, and Rainer Vietze, a former officer of
the Company, filed their respective Form 3 late.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
On April 25, 2000, Navtech dismissed Grant Thornton LLP as its
independent certified public accountants. Such determination was made by the
Company's Board of Directors.
The reports of Grant Thornton LLP on the Company's financial statements
as of October 31, 1998 and 1999 and for the years then ended neither contain an
adverse opinion or a disclaimer of opinion nor is modified as to uncertainty,
audit scope or accounting principles, except that the opinions included an
explanatory paragraph that there were conditions that raised substantial doubt
about the Company's ability to continue as a going concern.
During the fiscal years ended October 31, 1998 and 1999 and the period
from November 1, 1999 to April 25, 2000, there were no disagreements with Grant
Thornton LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which, if not resolved to
the satisfaction of such firm, would have caused it to make reference to the
subject matter of the disagreement in connection with its report.
Effective April 27, 2000, the Company engaged Deloitte & Touche LLP as
its independent certified public accountants with respect to the fiscal year
ended October 31, 2000. The engagement of Deloitte & Touche LLP was approved by
the Board of Directors of the Company.
It is not expected that a representative from either Deloitte & Touche
LLP or 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-Canada in, Waterloo, Ontario, Canada by February 15, 2001 for inclusion
in the Company's Proxy Statement and form of proxy relating to such meeting.
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.
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, Suite 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.
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 that listed as Proposal 1 in the notice. However, the
enclosed proxy gives discretionary authority in the event that any other matters
should be presented.
FORM 10-KSB
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, 1999, as amended.
Denis L. Metherell
Secretary
Waterloo, Ontario
June 15, 2000
