<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NORTH AMERICAN TECHNOLOGIES GROUP, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
NORTH AMERICAN TECHNOLOGIES GROUP, INC.
May 7, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Meeting") of North American Technologies Group, Inc. (the "Company") which will
be held at The Houstonian Hotel, 111 North Post Oak Lane, Houston, Texas, on
Thursday, June 12, 1997 at 10:00 A.M. Your Board of Directors and management
look forward to personally greeting those stockholders able to attend.
At the Meeting, stockholders will be asked to elect two directors, to
ratify the appointment of BDO Seidman, LLP as the Company's independent auditors
and to consider such other matters as may properly come before the Meeting or at
any adjournment(s) thereof. These matters are discussed in greater detail in
the accompanying Proxy Statement.
Your Board of Directors recommends a vote FOR the election of directors and
FOR the ratification of BDO Seidman, LLP as the Company's independent auditors.
Regardless of the number of shares you own or whether you plan to attend,
it is important that your shares be represented and voted at the Meeting. You
are requested to sign, date and mail the enclosed proxy promptly.
We wish to thank our stockholders for their participation and support.
Sincerely,
/s/ Tim B. Tarrillion
Tim B. Tarrillion
Chairman of the Board
and Chief Executive Officer
<PAGE>
NORTH AMERICAN TECHNOLOGIES GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 12, 1997
May 7, 1997
To the Stockholders of NORTH AMERICAN TECHNOLOGIES GROUP, INC.:
The Annual Meeting of Stockholders (the "Meeting") of North American
Technologies Group, Inc. (the "Company") will be held at The Houstonian Hotel,
111 North Post Oak Lane, Houston, Texas, on Thursday, June 12, 1997, at 10:00
A.M. for the following purposes:
(1) to elect two directors;
(2) to ratify the appointment of BDO Seidman, LLP as independent auditors
for the Company; and
(3) to transact such other business as may properly come before the
Meeting and at any adjournment(s) thereof.
A copy of the Annual Report for the fiscal year ended December 31, 1996 is
enclosed for your information.
Only stockholders of record as of the close of business on May 5, 1997 will
be entitled to vote at the Meeting and any adjournment or adjournments thereof.
Enclosed is a Proxy Statement, a form of proxy and an addressed return
envelope. All stockholders, whether or not they expect to be present at the
Meeting, are requested to date and sign the proxy and return it in the enclosed
envelope promptly. The return of the proxy will not affect your right to vote
if you attend the Meeting.
By Order of the Board of Directors,
/s/ David M. Daniels
David M. Daniels
Secretary
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO SIGN, DATE AND PROMPTLY
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.
<PAGE>
NORTH AMERICAN TECHNOLOGIES GROUP, INC.
PROXY STATEMENT
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of North American Technologies Group, Inc.
(the "Company") to be voted at the Annual Meeting of Stockholders of the Company
on June 12, 1997 and at any adjournment or adjournments of the meeting (the
"Meeting") for the purposes described in the foregoing notice of Meeting.
Proxies which are validly executed by stockholders and which are received by the
Company no later than the business day preceding the Meeting will be voted in
accordance with the instructions contained thereon. If no instructions are
given, a proxy will be voted FOR the election of the two nominees proposed for
election as directors, FOR the ratification of BDO Seidman, LLP as the Company's
independent auditors and in the discretion of the persons named in the proxy, if
granted, on all other matters presented to the Meeting.
The execution of a proxy will not affect a stockholder's right to attend
the Meeting and vote in person. A stockholder who has given a proxy may revoke
it at any time before it is exercised at the Meeting by filing with the
Secretary of the Company a written notice of revocation or a proxy bearing a
later date or by attendance at the Meeting and voting in person. Attendance at
the Meeting will not, by itself, revoke a proxy.
The securities entitled to vote at the Meeting consist of the Company's
shares of Common Stock, Cumulative Convertible Preferred Stock, Series F (the
"Series F Shares"), and Cumulative Convertible Preferred Stock, Series G,
Subseries I (the "Series G Shares"). The numbers of outstanding shares of
Common Stock, Series F Shares and Series G Shares at the close of business on
May 5, 1997 were 28,102,618, 101,404 and 16,400, respectively. Each share of
Common Stock is entitled to one vote, and each Series F Share and Series G Share
is entitled to 100 votes. Nominees receiving a plurality of the votes cast,
with the Common Stock, Series F Shares and Series G Shares, voting together as a
single class, will be elected as directors. Only holders of record at the close
of business on May 5, 1997 will be entitled to vote at the Meeting. The holders
of a majority of the shares entitled to vote at the meeting must be present in
person or represented by proxy at the Meeting in order to constitute a quorum
for the transaction of business. Abstentions and broker non-votes will be
counted for the purpose of determining a quorum but neither will be counted in
the election of directors or in the voting on the ratification of the Company's
independent auditors, as described herein.
A copy of the Company's Annual Report for the fiscal year ended December
31, 1996 accompanies this Proxy Statement. No material contained in the Annual
Report is to be considered a part of the proxy solicitation material. The
mailing address of the Company's executive office is 4710 Bellaire Boulevard,
Suite 301, Bellaire, Texas 77401. The approximate
<PAGE>
date on which this Proxy Statement and the form of proxy was first mailed or
given to stockholders was May 7, 1997.
PROPOSAL 1 - ELECTION OF DIRECTORS
- ----------
Nominees for Consideration at the Meeting
- -----------------------------------------
David M. Daniels and Edwin H. Knight have been nominated by the Board of
Directors to serve as directors of the Company until the 2000 Annual Meeting of
Stockholders. It is the intention of the persons named in the accompanying form
of proxy to vote such proxy for the election as directors of the nominees of the
Board of Directors. In the event that any nominee is unable to serve or will
not serve as a director, it is intended that the proxies solicited hereby will
be voted for such other person or persons as may be nominated by management. It
is not expected that any nominee will be unable or will decline to serve as a
director. Vacancies in the Board of Directors may be filled by the Board of
Directors (except that vacancies caused by the resignation or removal of
nominees of holders of the Series F Shares and Series G Shares shall be filled
by persons selected by such holders) and any director chosen to fill a vacancy
would hold office until the next election of the class for which such director
had been chosen.
<TABLE>
<CAPTION>
Directors Whose Terms Year in Which
Expire at the 2000 Service as a
Annual Meeting Principal Occupation Director Began
- --------------------------------------------------------------------------------
<S> <C> <C>
David M. Daniels, 40 Executive Vice President and 1994
Secretary of the Company;
President of Industrial Pipe
Fittings, Inc.
Edwin H. Knight, 44 General Manager, 1996
Harrison Interests, Ltd.
- --------------------------------------------------------------------------------
</TABLE>
DAVID M. DANIELS
Mr. Daniels joined the Company in July 1994, after working with the Company
as a consultant for several years. Mr. Daniels served as Vice President of
Corporate Development from 1993 to 1994, Vice President of Finance from 1994 to
1995, and Senior Vice President and Chief Operating Officer from January 1995 to
June 1995. He currently holds the positions of Executive Vice President and
Secretary. Mr. Daniels also serves as President of Industrial Pipe Fittings,
Inc. ("IPF") (1993 to present). Prior to his current position with the Company,
Mr. Daniels was employed by Dean Witter Reynolds for ten years, of which he held
the position of Vice President for eight years. Mr. Daniels holds a Bachelor's
Degree in Finance from the University of Houston, as well as an Associate Degree
from Georgia Military Academy.
2
<PAGE>
EDWIN H. KNIGHT
Mr. Knight was elected to the Board of Directors in 1996. Mr. Knight
manages Harrison Interests, Ltd., a privately held Texas limited partnership
whose lines of business are oil and gas exploration and production, real estate
and cattle ranching. He has managed Harrison Interests, Ltd. for thirteen years
and holds a Bachelor's Degree from Louisiana State University and is a certified
public accountant.
Other Members of the Board of Directors
- ---------------------------------------
The following is an identification and business experience of the Company's
directors who are not being voted upon at the Meeting.
<TABLE>
<CAPTION>
Directors Whose Terms Year in Which
Expire at the 1998 Service as a
Annual Meeting Principal Occupation Director Began
- --------------------------------------------------------------------------------
<S> <C> <C>
Donovan W. Boyd, 44 Senior Vice President and Chief 1995
Operating Officer of the Company
Mark E. Leyerle, 32 Principal, CCG Venture Partners, 1996
LLC
Henry W. Sullivan, 57 Vice President of Product 1997
Development of the Company;
President of GAIA Technologies,
Inc.
- --------------------------------------------------------------------------------
</TABLE>
DONOVAN W. BOYD
Mr. Boyd joined the Company as Senior Vice President in April 1995, and was
appointed Chief Operating Officer in July 1995. Prior to his position with the
Company, Mr. Boyd was Vice President of Sales and Marketing (1994 to 1995) and
Regional Vice President (1993 to 1994) for the Industrial Services division of
Rust International. Before Rust, Mr. Boyd was a Regional Vice President with
EnClean, Inc. (1991 to 1993). He holds a Bachelor's Degree in Chemical
Engineering from Tulane University and an MBA from Harvard University.
3
<PAGE>
MARK E. LEYERLE
Mr. Leyerle was elected to the Board of Directors in 1996. Mr. Leyerle is
a principal of CCG Venture Partners, LLC, a private investment firm. Prior to
his current position, Mr. Leyerle was an investment banker at Simmons & Co.
International, where he advised oilfield service and equipment companies, and a
commercial banker with Texas Commerce Bancshares. He holds a BBA degree from
Baylor University and an MBA from Harvard University.
HENRY W. SULLIVAN
Dr. Sullivan was elected to the Board of Directors in April 1997. Dr.
Sullivan became Vice President of Product Development of the Company in July
1996, and, after the Company bought GAIA Technologies, Inc. ("GAIA") in December
1995, the President of GAIA in January 1996. Prior to holding these positions,
Dr. Sullivan was the President and Chief Executive Officer of GAIA (1991 to
1995). He holds a Bachelor's degree in Chemical Engineering from Cooper Union
and Master's and Ph.D. degrees in Chemical Engineering from New York University.
<TABLE>
<CAPTION>
Directors Whose Terms Year in Which
Expire at the 1999 Service as a
Annual Meeting Principal Occupation Director Began
- --------------------------------------------------------------------------------
<S> <C> <C>
Tim B. Tarrillion, 46 Chief Executive Officer and 1995
President of the Company
Douglas C. Williamson, 46 Senior Vice President 1996
NationsBanc Capital Corporation
Robert H. Chaney, 38 Chairman and Chief Executive 1996
Officer, R. Chaney & Co.
- --------------------------------------------------------------------------------
</TABLE>
TIM B. TARRILLION
Mr. Tarrillion became Chief Executive Officer, President and a Director of
the Company on March 7, 1995. Mr. Tarrillion was most recently the President of
EET, Inc. ("EET") (1993 to 1995). Prior to starting EET, Mr. Tarrillion was co-
founder, President and Chief Operating Officer of EnClean, Inc. (1984 to 1993).
EnClean provided industrial and environmental cleaning services to companies in
the refining, petrochemical, steel, paper and utility industries, and was
acquired by Rust International in 1993. Mr. Tarrillion holds an MBA from
Harvard University and a Master's Degree and Bachelor's Degree in Chemical
Engineering from Rice University. Mr. Tarrillion received the 1991 Merrill
Lynch, Inc. Magazine's Entrepreneurial award for the Houston area in connection
with his role in building EnClean from $1 million in sales in 1984 to more than
$100 million in 1992.
4
<PAGE>
DOUGLAS C. WILLIAMSON
Mr. Williamson was elected to the Board of Directors in 1996. Mr.
Williamson is a Senior Vice President of NationsBanc Capital Corporation
("NBCC"), a position he has held since 1989. In this position, Mr. Williamson
manages venture capital investments. Mr. Williamson earned his MBA from
Columbia University and his Bachelor's Degree from Denison University.
ROBERT H. CHANEY
Mr. Chaney was elected to the Board of Directors in 1996. Mr. Chaney
currently holds the positions of Chairman and Chief Executive Officer of R.
Chaney and Co., an investment management firm, a position he has held since
1993. Prior thereto, Mr. Chaney was the President and Chief Executive Officer
of Paramount Petroleum Company.
BOARD MEETINGS AND COMMITTEES
- -----------------------------
There are currently eight members of the Board of Directors. During the
fiscal year ended December 31, 1996, there were four meetings of the Board and
nine actions by unanimous consent. All directors attended in 1996 at least 75%
of the meetings of the Board and committees of which they were a member.
In late 1996, the Board of Directors decided to establish three standing
committees to allow the Board to focus specific attention of critical areas of
the Board's management and monitoring of the Company's activities. From time
to time, the committees will make recommendations to the Board as necessary.
The three committees that were established and the current Board members
assigned to the committees are as follows:
Financial Audit:
Edwin H. Knight
Mark E. Leyerle
Donovan W. Boyd
Merger and Acquisition Review:
Tim B. Tarrillion
David M. Daniels
Henry W. Sullivan
Compensation:
Robert H. Chaney
Douglas C. Williamson
The purpose of the Financial Audit Committee is to oversee the financial
reporting procedures of the Company, ensure adequate financial and internal
controls, review the scope of
5
<PAGE>
the Company's annual audit, and recommend the selection of independent auditors.
The primary responsibilities of this committee include: meeting with the
Company's Chief Financial Officer on a quarterly basis to review the adequacy of
quarterly and annual SEC filings, reviewing in consultation with the independent
auditors their reports of audit and accompanying management letters, reviewing
the financial statements, financial controls, internal controls and accounting
practices of the Company, evaluating the performance and cost of the Company's
independent auditors and recommending to the Board of Directors the selection of
the next year's auditors, and monitoring compliance by the Company's management
and employees with major company policies and financial controls. The membership
of this committee is designed to include a minimum of three directors. The
Company's Chief Financial Officer serves as an ex-officio member of the
committee and attends all meetings except the annual review of the Company's
financial controls and accounting procedures with the Company's independent
auditors. Regular meetings of the committee are held once per quarter just prior
to the regularly scheduled Board meetings. The Audit committee met once during
1996.
The purpose of the Merger and Acquisition Review Committee is to monitor
and review the Company's policies and strategies regarding mergers and
acquisitions, and review the structure and terms of acquisitions proposed and
negotiated by the Company's senior management. The primary responsibilities of
this committee include: establishing key criteria for the Company's acquisition
strategy, advising management in recommended structure and terms for proposed
acquisitions, reviewing proposed acquisitions and making recommendations to the
Board of Directors for approval or rejection of proposals, monitoring the
assimilation of completed acquisitions into the Company and making
recommendations to management for improvements when needed, and establishing
policies and procedures for merger and tender offers received by the Company.
Meetings are held as needed to meet the schedule of proposed acquisitions. No
meetings of this committee were held in 1996.
The purpose of the Compensation Committee is to recommend compensation
policies for Company's senior management and to establish and administer the
Company's stock-based compensation plans and employee stock purchase plan. The
primary responsibilities of this committee include: reviewing all new employment
agreements with senior management and key employees of the Company, establishing
criteria for annual incentive bonus plans for the Company and senior management
(in concert with the recommendations of the Company's Chief Executive Officer)
and recommending amounts and payment of annual bonuses earned in accordance with
those criteria, recommending the issuance of incentive stock options to key
management personnel, assisting with and reviewing the establishment of an
employee stock option plan and director stock option plan when and if requested
by the Board of Directors, and monitoring and reviewing the Company's
compensation policies for all employees. Member ship of this Committee is
designed to include at least two outside (non-employee) directors. This
committee will meet at least once per year beginning in 1997 to establish annual
bonus plans and criteria for each new fiscal year.
The directors of the Company receive no fees or other compensation in connection
with their services as directors.
6
<PAGE>
AGREEMENTS WITH HOLDERS OF PREFERRED STOCK
- ------------------------------------------
Pursuant to agreements relating to the purchase of the Series F Shares and
Series G Shares (the "Purchase Agreements") between the Company, NBCC and
certain other investors (collectively, with NBCC, the "Investors"), the Company
has agreed to nominate to the Board of Directors, for as long as the Series F
Shares and Series G Shares are owned by the Investors or permitted assignees or
permitted transferees, (i) four (4) members designated by the holders of a
majority in interest of the Series F Shares and Series G Shares, at least one
(1) of which shall be designated by NBCC so long as NBCC owns at least fifty
percent (50%) of the Series F Shares and Series G Shares, taken together as a
group, (ii) four (4) members designated by the holders of Common Stock and (iii)
one (1) member designated jointly by the holders of the Common Stock and the
holders of a majority in interest of the Series F Shares and Series G Shares.
The requisite holders of the Series F Shares and Series G Shares have agreed,
for so long as the number of Directors constituting the Board shall be eight,
that there will be no jointly nominated director. If the Company shall breach
any of the covenants or obligations set forth in the Purchase Agreements and
such breach remains uncured, the holders of a majority in interest of the Series
F Shares and Series G Shares shall be entitled then and thereafter to nominate
and elect a majority of directors to the Company's Board of Directors, at least
two (2) of which shall be designees of NBCC. Pursuant to the Purchase
Agreements, the Investors' nominees are: Douglas C. Williamson, Robert H.
Chaney, Mark E. Leyerle and Edwin H. Knight, with only Mr. Knight's term to
expire at the 1997 Annual Meeting.
CHANGES IN CONTROL
- ------------------
If the Company were to breach any of its covenants or obligations set forth
in the Purchase Agreements and such breach were to remain uncured, the holders
of a majority in interest of the Series F Shares and Series G Shares would be
entitled then and thereafter to nominate and elect a majority of directors to
the Company's Board of Directors, at least two (2) of which shall be designees
of NBCC.
EXECUTIVE COMPENSATION
- ----------------------
The following table sets forth a summary of the compensation paid or
accrued for the years 1994 through 1996 by the Company to or for the benefit of
the named executive officers.
7
<PAGE>
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
Long Term Compensation
----------------------------------
Annual Compensation Awards Payouts
-------------------------------------- ---------- ----------
Other
Name Annual Restricted Stock All Other
and Compen- Stock Options/ LTIP Compen-
Principal Position Year(s) Salary($) Bonus($) sation($) Award(s)($) SARS (#) Payouts($) sation($)
- ------------------ ------- --------- -------- ---------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Tim B. 1996 185,903 - - - 5,940(3)
Tarrillion(2) 1995 146,537 - 25,000(4) - 500,000 -
Chief Executive 1994 - - - - - - -
Officer, -
President and
Director
Donovan W. 1996 139,178 - - - - - 3,543(3)
Boyd 1995 98,655(5) - - - 300,000 - 26,417(6)
Senior Vice 1994 - - - - - - -
President, COO
David M. 1996 137,928 - - - - - 2,654(3)
Daniels(7) 1995 130,529 _ - - 200,000 - -
Executive Vice 1994 125,000 - - - 300,000 - -
President,
Secretary and
Director
Judith K. 1996 122,602 - - - - - 2,662(3)
Shields 1995 92,308(8) - - - 300,000 - -
Senior Vice 1994 - - - - - - -
President-
Finance, CFO
and Treasurer
- ---------------------------
</TABLE>
(1) Based upon the fiscal years ended December 31, 1996, 1995 and 1994.
(2) Mr. Tarrillion became Chief Executive Officer, President and a Director of
the Company on March 7, 1995.
(3) Represents life insurance premiums paid by the Company on policies on the
executives' lives and matching contributions to the Company's 401K plan.
(4) Payments received in January and February 1995 as a consultant to the
Company.
(5) Mr. Boyd's employment began on April 1, 1995.
(6) Payments made to relocate Mr. Boyd to Houston, Texas.
(7) Mr. Daniels became a Director during August 1994 and became an Executive
Vice President, and Secretary of the Company during January 1995.
(8) Ms. Shield's employment began on March 20, 1995.
8
<PAGE>
STOCK OPTIONS
During the 1996 fiscal year, the Company did not grant any stock options to
any of the named executive officers. No stock appreciation rights have been
granted to employees. The following table sets forth for each of the named
executive officers information regarding stock options exercised by such
officers during the 1996 fiscal year, together with the number and value of
stock options held at 1996 fiscal year-end, each on an aggregated basis.
<TABLE>
<CAPTION>
Aggregated Option Exercises in the 1996 Fiscal Year
and Fiscal Year-End Option Value
Value of
Unexercised
Number of In-the-Money
Unexercised ------------------
Options at Options at
Number of Fiscal Year-End Fiscal Year-End(1)
Shares --------------- ------------------
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
- ---- ------------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Tim B. Tarrillion -- -- 200,000/300,000 --
David M. Daniels -- -- 230,000/270,000 --
Donovan W. Boyd -- -- 150,000/150,000 --
Judith K. Shields -- -- 150,000/150,000 --
Henry W. Sullivan -- -- 50,000/150,000 --
- ----------
</TABLE>
(1) Market value of underlying securities at year-end ($.56), minus the
exercise price.
In February 1997, the Compensation Committee of the Board of Directors
initiated discussions concerning the repricing of stock options granted to
certain members of the management of the Company between February 1995 and
September 1996 at exercise prices of $2.50 per share and terms of nine years
(the "Repriced Options"). It is anticipated that those members of the
management of the Company who would agree to forego any right to receive a cash
bonus or salary increase of any kind, whether based on performance or otherwise,
during 1997 would be entitled to exercise their Repriced Options at $1.00 per
share. The remaining terms of the Repriced Options would not be changed. As of
the date of this Proxy Statement, the Compensation Committee has not made a
specific recommendation to the Board of Directors regarding this matter.
EMPLOYMENT AGREEMENTS
- ---------------------
In February 1995, the Company entered into employment agreements with Tim
B. Tarrillion as Chief Executive Officer and President, Donovan W. Boyd as
Senior Vice President, David M. Daniels as Executive Vice President and
Secretary, and Judith Knight Shields as Senior Vice President - Finance, Chief
Financial Officer and Treasurer. Mr. Tarrillion's employment agreement provides
for a base salary of $180,000, plus bonuses and cost of living
9
<PAGE>
increases, and stock options to purchase 500,000 shares of the Company's Common
Stock which vest over four years commencing on March 31, 1996. His agreement has
a term of five years.
Mr. Boyd's employment agreement provides for a base salary of $135,000,
plus bonuses and cost of living increases, as well as options to purchase
300,000 shares of the Company's Common Stock which vest over a period of four
years commencing March 31, 1996. His agreement has a term of five years.
Mr. Daniels' employment agreement provides for a base salary of $135,000,
plus bonuses and cost of living increases, as well as options to purchase
200,000 shares of the Company's Common Stock which vest over a period of four
years commencing March 31, 1996. His agreement has a term of five years.
Ms. Shields' employment agreement provides for a base salary of $120,000,
plus bonuses and cost of living increases, as well as options to purchase
300,000 shares of the Company's Common Stock which vest over a period of four
years, commencing on March 31, 1996. Her agreement is for a term of five years.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
CERTAIN BENEFICIAL OWNERS
The following table sets forth information with respect to the securities
holdings of all persons which the Company, by virtue of filings with the
Securities and Exchange Commission, has reason to believe may be deemed the
beneficial owners of more than 5% of the Company's outstanding Common Stock and
Preferred Stock as of May 5, 1997.
10
<PAGE>
COMMON STOCK
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percentage
Name and Address of Beneficial Owner Ownership of Class(1)
- -------------------------------------- ----------------- -------------
<S> <C> <C>
NationsBanc 13,534,004 32.5%
Capital Corporation(2)
901 Main Street
66th Floor
Dallas, Texas 75202
Robert H. Chaney(3) 3,383,501 10.8%
R. Chaney & Partners, 1993 L.P.
909 Fannin, Suite 1275
Two Houston Center
Houston, Texas 77010-1006
The CCG Charitable 2,030,101 6.7%
Remainder Unitrust #1(4)
14450 T.C. Jester Boulevard
Suite 170
Houston, Texas 77014
William T. Aldrich(5) 1,791,667 6.4%
10406 Memorial Drive
Houston, Texas 77024
Henry W. Sullivan(6) 1,737,667 6.2%
10814 Jaycee Lane
Houston, TX 77024
- ---------------------
</TABLE>
(1) Calculated in accordance with the General Rules and Regulations of the
Securities and Exchange Commission, and includes shares of Common Stock
which can be acquired upon exercise of conversion of outstanding options,
warrants or other convertible securities (such as the Series F Shares and
Series G Shares) which are exercisable within sixty days of May 5, 1997.
(2) Includes 6,311,782 shares of Common Stock issuable upon conversion of the
Series F Shares, 2,222,222 shares of Common Stock which may be issued upon
conversion of the Series G Shares, and 5,000,000 shares of Common Stock
which may be acquired upon exercise of Common Stock purchase warrants.
(3) Includes 1,577,946 shares of Common Stock issuable upon conversion of the
Series F Shares, 555,555 shares of Common Stock which may be acquired upon
conversion of the Series
11
<PAGE>
G Shares, and 1,250,000 shares of Common Stock which may be acquired upon
exercise of Common Stock purchase warrants.
(4) Includes 946,768 shares of Common Stock issuable upon conversion of the
Series F Shares, 333,333 shares of Common Stock which may be issued upon
conversion of the Series G Shares, and 750,000 shares of Common Stock which
may be acquired upon exercise of Common Stock purchase warrants.
(5) Mr. Aldrich is a former director of the Company who was employed by the
Company through March 31, 1997. Mr. Aldrich is deemed the beneficial owner
of 1,666,667 shares of Common Stock by virtue of his positions as a
principal executive officer of Thor Ventures, L.C. ("Thor"), which owns
1,111,111 shares of Common Stock, and GAIA Holdings, Inc. ("GHI"), which
owns 555,556 shares of Common Stock. By virtue of his personal and family
holdings in Thor and GHI, Mr. Aldrich and his family have a direct
pecuniary interest in 397,633 shares of Common Stock and disclaim
beneficial ownership of all remaining shares. Also includes options to
purchase 125,000 shares of Common Stock.
(6) Dr. Sullivan is deemed a beneficial owner of 1,666,667 shares of Common
Stock by virtue of his positions as a principal executive officer of Thor,
which owns 1,111,111 shares of Common Stock, and GHI, which owns 555,556
shares of Common Stock. Dr. Sullivan has a direct pecuniary interest in
527,889 shares of Common Stock and disclaims beneficial ownership of all
remaining shares. Includes options to purchase 50,000 shares of Common
Stock. Does not include options to purchase 150,000 shares of Common Stock
that do not commence vesting until December 29, 1997.
12
<PAGE>
SERIES F SHARES
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percentage
Name and Address of Beneficial Owner Ownership of Class
- -------------------------------------- -------------------- -----------
<S> <C> <C>
NationsBanc 54,913 54.1%
Capital Corporation
901 Main Street
66th Floor
Dallas, Texas 75202
Robert H. Chaney 13,728 13.5%
R. Chaney & Partners, 1993 L.P.
909 Fannin, Suite 1275
Two Houston Center
Houston, Texas 77010-1006
The CCG Venture Partners, LLC 8,237(1) 8.1%
14450 T.C. Jester Boulevard
Suite 170
Houston, Texas 77014
Harrison Interests, Ltd. 5,491 5.4%
Texas Commerce Bank Bldg.
Suite 1900
Houston, Texas 77002
- ---------------------
</TABLE>
(1) Registered in the name of The CCG Charitable Remainder Unitrust No. 1 for
which CCG Venture Partners, LLC provides investment management services.
CCG Venture Partners, LLC disclaims beneficial ownership of these shares.
13
<PAGE>
SERIES G SHARES
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percentage
Name and Address of Beneficial Owner Ownership of Class
- -------------------------------------- -------------------- -----------
<S> <C> <C>
NationsBanc 10,000 61.0%
Capital Corporation
901 Main Street
66th Floor
Dallas, Texas 75202
Robert H. Chaney 2,500 15.2%
R. Chaney & Partners, 1993 L.P.
909 Fannin, Suite 1275
Two Houston Center
Houston, Texas 77010-1006
The CCG Venture Partners, LLC 1,500(1) 9.1%
14450 T.C. Jester Boulevard
Suite 170
Houston, Texas 77014
Harrison Interests, Ltd. 1,000 6.1%
Texas Commerce Bank Bldg.
Suite 1900
Houston, Texas 77002
</TABLE>
- ---------------------
(1) Registered in the name of The CCG Charitable Remainder Unitrust No. 1 for
which CCG Venture Partners, LLC provides investment management services.
CCG Venture Partners, LLC disclaims beneficial ownership of these shares.
14
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY DIRECTORS AND MANAGEMENT
The following table sets forth the beneficial ownership of all of the
Company's outstanding Common Stock as of such date by all officers and
directors, individually and as a group.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percentage
Name and Address of Beneficial Owner Ownership of Class(1)
- --------------------------------------- ----------------- -------------
<S> <C> <C>
Tim B. Tarrillion(2) 981,630 3.5%
10102 Cedar Creek
Houston, Texas 77042
Donovan W. Boyd(3) 201,959 *
4710 Bellaire Boulevard, Suite 301
Houston, Texas 77401
David M. Daniels(4) 1,115,164 3.9%
5717 Hogue Street
Houston, Texas 77087
Robert H. Chaney(5) 3,383,501 10.8%
R. Chaney & Partners, 1993 L.P.
909 Fannin, Suite 1275
Two Houston Center
Houston, Texas 77010
Mark E. Leyerle(6) 2,030,101 6.7%
CCG Venture Partners, LLC
14450 T.C. Jester Boulevard
Suite 170
Houston, Texas 77014
Douglas C. Williamson(7) 0 -
NationsBanc Capital Corporation
901 Main Street
66th Floor
Dallas, Texas 75202
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percentage
Name and Address of Beneficial Owner Ownership of Class(1)
- --------------------------------------- ----------------- -------------
<S> <C> <C>
Edwin H. Knight(8) 0 -
Harrison Interests, Ltd.
707 Travis
Suite 1900
Houston, Texas 77002
Henry W. Sullivan(9) 1,737,667 6.2%
10814 Jaycee Lane
Houston, TX 77024
Judith Knight Shields(10) 217,500 *
4710 Bellaire Boulevard, Suite 301
Houston, Texas 77401
All officers and directors as a group 9,667,522 28.0%
(9) persons
- ---------------------
</TABLE>
* Less than 1%.
(1) Calculated in accordance with the General Rules and Regulations of the
Securities and Exchange Commission, and includes shares of Common Stock
which can be acquired upon exercise of conversion of outstanding options,
warrants or other convertible securities (such as the Series F Shares and
Series G Shares) which are exercisable within sixty days of May 5, 1997.
(2) Includes 530,500 shares of Common Stock and 50,000 common stock purchase
warrants received by Mr. Tarrillion in conjunction with a merger
transaction between the Company and EET in March 1995. Includes 91,130
shares owned through a profit sharing plan for the benefit of Mr.
Tarrillion. Includes options to purchase 300,000 shares of Common Stock.
Does not include options to purchase 200,000 shares which do not commence
vesting until March 31, 1998. Also does not include 51,000 shares received
by trusts on behalf of Mr. Tarrillion's minor children in connection with
the EET merger which are held by an independent trustee as to which Mr.
Tarrillion disclaims any beneficial ownership.
(3) Includes 1,959 shares of Common Stock owned through a profit sharing plan
for the benefit of Mr. Boyd. Includes options to purchase 200,000 shares
of Common Stock. Does not include options to purchase 100,000 shares which
do not commence vesting until March 31, 1998.
(4) Includes 600,000 shares of Common Stock received by Mr. Daniels in
conjunction with a merger transaction between the Company and IPF in June
1995. Includes 10,164 shares of Common Stock owned through a profit
sharing plan for the benefit of Mr. Daniels. Includes options to purchase
340,000 shares of Common Stock. Does not include options to purchase
16
<PAGE>
60,000 shares which do not commence vesting until January 1, 1998 or
options to purchase 100,000 shares that do not commence vesting until March
31, 1998.
(5) Includes 1,557,946 shares of Common Stock issuable upon conversion of
shares of Series F Shares, 555,555 shares of Common Stock which may be
issued upon conversion of the Series G Shares and 1,250,000 shares of
Common Stock which may be acquired upon exercise of Common Stock purchase
warrants.
(6) Includes 946,768 shares of Common Stock issuable to The CCG Charitable
Remainder Unitrust No. 1 upon conversion of shares of the Series F Shares,
333,333 shares of Common Stock which may be issued upon conversion of the
Series G Shares and 750,000 shares of Common Stock which may be acquired
upon exercise of Common Stock purchase warrants. CCG Venture Partners, LLC
provides investment management services to CCG Charitable Remainder
Unitrust No. 1. Mr. Leyerle, a principal of CCG Venture Partners, LLC,
disclaims any beneficial ownership of these shares.
(7) Does not include 6,311,782 shares of Common Stock issuable to NBCC upon
conversion of the Series F Shares, 2,222,222 shares of Common Stock which
may be issued upon conversion of the Series G Shares, and 5,000,000 shares
of Common Stock which may be acquired by NBCC upon exercise of Common Stock
purchase warrants.
(8) Does not include 631,178 shares of Common Stock issuable to Harrison
Interests, Ltd. upon conversion of the Series F Shares, 222,222 shares of
Common Stock which may be issued upon conversion of the Series G Shares and
500,000 shares of Common Stock which may be acquired by Harrison Interests,
Ltd. upon exercise of Common Stock purchase warrants.
(9) Includes 555,556 shares of Common Stock owned by GHI and 1,111,111 shares
of Common Stock owned by Thor. Dr. Sullivan, a principal executive officer
of Thor and GHI, disclaims beneficial ownership of these shares. Dr.
Sullivan has a direct pecuniary interest in 527,889 shares of Common Stock
and disclaims beneficial ownership of all remaining shares. Includes
options to purchase 50,000 shares of Common Stock. Does not include
options to purchase 150,000 shares of Common Stock that do not commence
vesting until December 29, 1997.
(10) Includes 10,000 shares received by Ms. Shields and her husband in
connection with the merger transaction between the Company and EET in March
1995. Includes options to purchase 200,000 shares of Common Stock. Does
not include options to purchase 100,000 shares that do not commence vesting
until March 31, 1998.
Involvement in Certain Legal Proceedings
- ----------------------------------------
To the best of the Company's knowledge, there have been no events under any
state or federal bankruptcy laws, no criminal proceedings, no judgments, orders,
decrees or injunctions entered against any officer or director, and no
violations of federal or state securities or
17
<PAGE>
commodities laws material to the ability and integrity of any director or
executive officer during the past five years.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Consulting Agreement with John W. Parrott
- -----------------------------------------
Effective as of July 28, 1995, John W. Parrott terminated his employment
agreement with the Company and entered into a consulting agreement (the
"Consulting Agreement"). The Consulting Agreement provided that Mr. Parrott
would provide advice to the Company with respect to the Company's transition in
management and certain litigation and financing matters through December 31,
1995. In addition, the Company agreed to indemnify Mr. Parrott for any
liabilities he may have as a result of his tenure as an officer of the Company,
to the fullest extent permitted by law. Pursuant to the Consulting Agreement,
Mr. Parrott received $15,000 a month through December 31, 1995 for his
consulting services, and payments during 1996 in settlement of his five-year
employment contract totaling $250,000.
Transactions with Directors, Officers and Certain Affiliates
- ------------------------------------------------------------
In January 1996, Mr. Tarrillion loaned $250,000 to IPF under the terms of a
promissory note. The note bears interest at 13% per annum, requires monthly
payments of $5,700 and matures in January 1999. During 1996 IPF paid $28,158 in
interest to Mr. Tarrillion in respect of this note. Proceeds from the note were
used by IPF to purchase a machine for fabricating wyes, tees and els. The
equipment purchased serves as collateral for the note.
In June 1995, the Company acquired by merger IPF, a company owned by Mr.
David Daniels, a director and officer of the Company and two other individuals
who were subsequently hired by the Company. The Company issued 1,300,000 shares
of the Company's Common Stock in conjunction with the merger, 600,000 of which
were issued to Mr. Daniels. Mr. Daniels was also released from a personal
guaranty of certain debts of IPF in the amount of $50,000. The Company also
agreed to repay certain outstanding loans made by Mr. Daniels to IPF on or
before December 31, 1995. The outstanding balance of such loans at December 31,
1995, was $120,000. Mr. Daniels was repaid the $120,000 by Mr. Tarrillion. IPF
then executed a note in the amount of $120,000 due to Mr. Tarrillion. The note
bears interest at twelve (12%) percent per annum, and is due January 31, 1998.
The balance at December 31, 1996 was $120,000. During 1996 IPF paid $13,200 in
interest to Mr. Tarrillion in respect of this note. Further, Mr. Daniels
entered into an amendment to his existing employment agreement with the Company
to serve as President of IPF.
The Company has employment agreements with Messrs. Tarrillion, Boyd and
Daniels, and Ms. Shields.
The Company has granted certain options and warrants to directors and
officers of the Company.
18
<PAGE>
The manufacturing facilities of IPF are owned by Mr. David Daniels, a
director and officer of the Company. IPF occupies these facilities pursuant to
a verbal lease agreement and pays rentals of $2,900 per month.
VOTE REQUIRED
A plurality of votes cast by holders of shares eligible to vote at the
meeting is required to elect a nominee as a director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
THE TWO NOMINEES TO THE BOARD OF DIRECTORS
PROPOSAL 2 - RATIFICATION OF THE COMPANY'S INDEPENDENT AUDITORS
- ----------
BDO Seidman, LLP has audited the Company's financial statements since 1992.
BDO Seidman, LLP has been selected by the Board of Directors and the Financial
Audit Committee to serve as the independent auditors for the Company for the
fiscal year ending December 31, 1997. Representatives of BDO Seidman, LLP are
expected to be present at the Meeting to make a statement if they so desire and
will be available to respond to appropriate questions.
The Board of Directors shall consider the selection of another accounting
firm to serve as the Company's independent auditors in the event that the
stockholders do not approve the selection of BDO Seidman, LLP as the Company's
independent auditors.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the shares present in person or by
proxy is required for ratification of BDO Seidman, LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
BDO SEIDMAN, LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
1997 FISCAL YEAR
OTHER MATTERS
The Board of Directors does not know of any other matter which is intended
to be brought before the Meeting, but if such matter is presented, the persons
named in the enclosed proxy intend to vote the same according to their best
judgment.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the knowledge of the Company, each of the Company's directors, executive
officers and 10% beneficial owners has complied with the requirements of Section
16(a) of the Securities and Exchange Act of 1934.
19
<PAGE>
EXPENSES OF SOLICITATION
The cost of this proxy solicitation will be borne by the Company. In
addition to the use of mail, proxies may be solicited in person or by telephone
by employees of the Company without additional compensation. The Company will
reimburse brokers and other persons holding stock in their names or in the names
of nominees for their expenses incurred in sending proxy material to principals
and obtaining their proxies.
1998 STOCKHOLDER PROPOSALS
In order for stockholder proposals for the 1998 Annual Meeting of
Stockholders to be eligible for inclusion in the Company's 1998 proxy statement,
they must be received by the Company at its principal office in Bellaire, Texas
on or before January 9, 1998.
By Order of the Board of Directors
/s/ Tim B. Tarrillion
Tim B. Tarrillion
Chairman of the Board and
Chief Executive Officer
Dated: May 7, 1997
20
<PAGE>
NORTH AMERICAN TECHNOLOGIES GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Tim B. Tarrillion and Donovan W. Boyd as
proxy with power to appoint a substitute and hereby authorizes either of them
to represent and to vote all shares of Common Stock of North American
Technologies Group, Inc. held of record by the undersigned on May 5, 1997 at
the Annual Meeting of Stockholders of North American Technologies Group, Inc.
to be held on June 12, 1997 and at any adjournments or postponements thereof,
and to vote as directed on the reverse side of this form and, in their
discretion, upon such other matters not specified as may come before said
meeting.
ELECTION OF DIRECTORS
Nominees: David M. Daniels, Edwin H. Knight Change of Address and Comments
-------------------------------
-------------------------------
-------------------------------
-------------------------------
(If you have written in the
above space, please mark the
corresponding box on the
reverse side of this form.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOX (SEE
REVERSE SIDE), BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD
SEE REVERSE SIDE
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES FOR DIRECTOR AND FOR APPROVAL OF THE RATIFICATION OF BDO SEIDMAN, LLP
AS AUDITORS FOR NORTH AMERICAN TECHNOLOGIES GROUP, INC.
1. Proposal 1--Election of Directors
FOR [_] WITHHELD [_] CHANGE OF ADDRESS [_]
Comments on Reverse Side
(See reverse)
For, except vote withheld from
the following nominee(s):
- -----------------
- -----------------
2. Proposal 2--Approval of the ratification of BDO Seidman, LLP as auditors for
the Company.
FOR [_] AGAINST [_] ABSTAIN [_]
PLEASE SIGN, DATE AND RETURN
YOUR PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE
REQUIRED IF MAILED IN THE UNITED
STATES.
SIGNATURE(S)
-----------------------
----------------------------------
DATE
NOTE: PLEASE SIGN NAME(S)
EXACTLY AS PRINTED HEREON. JOINT
OWNERS SHOULD EACH SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE
AS SUCH.
