<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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.
14315 West Hardy Road
Houston, Texas 77060
July 17, 2000
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 La Quinta Inn at 15510 John F. Kennedy Blvd., Houston,
Texas, on Monday, July 31, 2000 at 10:00 A.M. Central Time. 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 (2) directors
to serve until the 2003 Annual Meeting of Stockholders or until their successors
are elected and qualified; to ratify the appointment of BDO Seidman, LLP as the
Company's independent auditors for the fiscal year ending December 31, 2000; and
to consider such other matters as may be properly brought before the Meeting or
at any adjournment(s) or postponement(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 the
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.
A copy of the Annual Report for the fiscal year ended December 31,1999
is enclosed for your information. No material contained in the Annual Report is
to be considered a part of the proxy solicitation material.
We wish to thank our stockholders for their participation and support.
Sincerely,
/s/ Henry W. Sullivan
----------------------------
Henry W. Sullivan
Chief Executive Officer
<PAGE>
NORTH AMERICAN TECHNOLOGIES GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held July 31, 2000
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of North American Technologies Group, Inc. (the "Company") will be
held at the La Quinta Inn at 15510 John F. Kennedy Blvd., Houston, Texas, on
Monday, July 31, 2000 at 10:00 A.M. Central Time, for the following purposes:
(1) to elect two (2) directors to serve until the 2003 Annual
Meeting of Stockholders or until their successors are elected and qualified;
(2) to ratify the appointment of BDO Seidman, LLP as independent
auditors for the Company for the fiscal year ending December 31, 2000; and
(3) to transact such other business as may properly be brought
before the Meeting and at any adjournment(s) or postponement(s) thereof.
A copy of the Annual Report for the fiscal year ended December 31, 1999
is enclosed for your information. No material contained in the Annual Report is
to be considered a part of the proxy solicitation material.
Only stockholders of record as of the close of business on July 17,
2000 will be entitled to vote at the Meeting and any adjournment(s) or
postponement(s) thereof.
All stockholders are cordially invited to attend the Meeting. However,
to assure your representation at the Meeting, you are urged to complete, sign,
date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the Meeting may vote in person even if he or she has returned a proxy.
By Order of the Board of Directors,
/s/ Russell L. Allen
----------------------------------
Houston, Texas Russell L. Allen
July 17, 2000 Assistant 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.
14315 West Hardy Road
Houston, Texas 77060
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Directors of
North American Technologies Group, Inc. (the "Company") to be voted at the
Annual Meeting of Stockholders of the Company to be held at the La Quinta Inn at
15510 John F. Kennedy Blvd., Houston, Texas, on Monday, July 31, 2000 at 10:00
A.M. Central Time, and at any adjournment(s) or postponement(s) thereof (the
"Meeting") for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders. The proxy solicitation materials were mailed on or
about July 19, 2000 to all stockholders entitled to vote at the Meeting.
Record Date and Share Ownership
-------------------------------
Stockholders of record at the close of business on July 17, 2000 (the
"Record Date") are entitled to notice of and to vote at the Meeting. At the
Record Date, 5,992,805 shares of common stock, $0.001 par value per share (the
Common Stock"), 84,898 shares of the Cumulative Convertible Preferred Stock,
Series F, $0.001 par value per share (the "Series F Shares"), 14,846 shares of
Cumulative Convertible Preferred Stock, Series G - Subseries I, $0.001 par value
per share (the "Series G-I Shares"), 20,004 shares of Cumulative Convertible
Preferred Stock, Series G - Subseries II, $0.001 par value per share (the
"Series G-II Shares), and 8,507 shares of Cumulative Convertible Preferred
Stock, Series G - Subseries III, $0.001 par value per share (the "Series G-III
Shares") and 8,102 shares of the Cumulative Convertible Preferred Stock, Series
H, $0.001 par value per share (the "Series H Shares") (collectively, the
"Preferred Stock") were issued and outstanding. The Preferred Stock is entitled
to vote on an "as converted" basis on all items presented to the Meeting. As of
the Record Date, the shares of Preferred Stock were entitled to the following
votes per Share; Series F Shares: 30.23; Series G-I Shares: 46.96; Series G-II
Shares: 115.44; Series G-III Shares: 70.59; Series H Shares: 54.05.
Revocability of Proxies
-----------------------
The execution of a proxy will not affect a stockholder's right to
attend the Meeting and vote in person. Any proxy given pursuant to this
solicitation may be revoked by the person giving it at any time before it is
used at the Meeting by filing with the Secretary of the Company either (i) a
written notice of revocation; (ii) a proxy bearing a later date than the most
recently submitted proxy; or (iii) by attendance at the Meeting and voting in
person. Attendance at the Meeting will not, by itself, revoke a proxy.
Annual Report
-------------
A copy of the Annual Report for the fiscal year ended December 31, 1999
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 14315 West
Hardy Road, Houston, Texas 77060.
Voting and Solicitation
-----------------------
On all matters each share of Common Stock is entitled to one vote. The
Preferred Stock is entitled to vote on an "as converted" basis on all items
presented to the Meeting. As of the Record Date, the shares of Preferred Stock
were entitled to the following votes per Share; Series F Shares: 30.23; Series
G-I Shares: 46.96; Series G-II Shares: 115.44; Series G-III Shares: 70.59;
Series H Shares: 54.05. The affirmative vote of a majority of the shares of
stock present in person or by proxy is required to elect nominees as directors
and to approve the ratification of the appointment of BDO Seidman, LLP as
independent auditors for the Company.
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, the proxy will be voted in accordance with the
recommendations of the Board of Directors and in the discretion of the persons
named in the proxy on all other matters presented to the Meeting. For the
<PAGE>
reasons set forth in more detail in the Proxy Statement, the Board of Directors
recommends a vote FOR the election of the directors and FOR the ratification of
BDO Seidman, LLP as the Company's independent auditors.
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.
Quorum; Abstentions; Broker Non-Votes
-------------------------------------
The Company's Amended and Restated Bylaws (the "Bylaws") provide that
the stockholders holding a majority of the shares entitled to vote on the Record
Date 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 will not
be counted in the election of directors or in the ratification of the Company's
independent auditors.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees for Consideration at the Meeting
-----------------------------------------
The Board of Directors of the Company is currently composed of five
directors and is divided into three classes. The directors are elected to serve
staggered three year terms, with the term of one class of directors expiring
each year. The three classes of directors are identified as Class I, Class II
and Class III based on the expiration of the terms of the directors in each
class. Except with respect to vacancies caused by the resignation or removal of
nominees of holders of the Series F and G Preferred Stock, which shall be filled
by persons selected by such holders, vacancies in the Board of Directors may be
filled by the Board of Directors and any director chosen to fill a vacancy shall
hold office until the next election of the class for which such director has
been chosen. See "Agreements With Holders of Preferred Stock."
Unless otherwise specified, each properly executed proxy received will
be voted for the election of the nominees named below, to serve as a directors
until the 2003 Annual Meeting of Stockholders or until a successor is elected
and qualified. Edwin H. Knight and Frank J. Vella have been nominated by the
Board of Directors and shall be identified as Class I directors. The Company is
not aware of any reason that the nominees will be unable or will decline to
serve as a director. 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 the Board of
Directors.
CLASS I DIRECTORS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
Directors Whose Terms Year in Which
Expire at the 2003 Service as a
Annual Meeting Principal Occupation Director Began
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Edwin H. Knight, 46 General Manager of Harrison 1996
Interests, Ltd.
Frank J. Vella, 58 President and CEO of Veltec 2000
Polymer Services, Inc.
----------------------------------------------------------------------------------------------------------------------
</TABLE>
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 fourteen years
and holds a Bachelors Degree from Louisiana State University and is a Certified
Public Accountant. Mr. Knight serves on the Company's Board of Directors as a
nominee of the holders of the F and G Preferred Shares.
Frank J. Vella
Mr. Vella was elected to the Board of Directors in April 2000. Since 1992,
Mr. Vella has served as President and CEO of Veltec Polymer Services, Inc.
(Veltec), a specialty compounding company in Elkton, Maryland. Mr. Vella is
founder and principal owner of Veltec.
3
<PAGE>
Other Members of the Board of Directors and Executive Officers
--------------------------------------------------------------
The following is an identification and business experience of the
Company's directors who are not being voted upon at the Meeting.
CLASS II DIRECTORS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
Directors Whose Terms Year in Which
Expire at the 2001 Service as a
Annual Meeting Principal Occupation Director Began
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Henry W. Sullivan, 60 President and Chief Executive 1997
Officer of the Company; President
of TieTek, Inc.; Director of the
Company
----------------------------------------------------------------------------------------------------------------------
</TABLE>
Henry W. Sullivan
Dr. Sullivan was elected to the Board of Directors in April 1997. Dr.
Sullivan became Vice President of Technology of the Company in July 1996 and
President of TieTek, Inc. in December 1997. In January 1999, Dr. Sullivan
assumed the additional positions of President and Chief Executive Officer of the
Company. Prior to joining the Company, Dr. Sullivan was employed by Shell Oil
Company where he spent twenty-three years in various positions and, in 1984, was
named Vice President of Shell Chemical Company. Dr. Sullivan joined Huntsman
Petrochemical Corporation in 1988 as its President, and became Vice Chairman of
its parent company, Huntsman Chemical Corporation, a year later. From 1991 to
1995 he was President and Chief Executive Officer of GAIA Holdings, Inc., until
joining the Company as President of GAIA Technologies, Inc. and later TieTek,
Inc. Dr. Sullivan has served as Chairman and Director of several companies and
organizations in manufacturing and polymer technology, including the Executive
Committee of the Society of the Plastics Industry. He currently serves as a
Director of the Sarkeys Energy Center at the University of Oklahoma. Dr.
Sullivan holds a Bachelors degree in Chemical Engineering from Cooper Union and
Masters and Ph.D. degrees in Chemical Engineering from New York University.
CLASS III DIRECTORS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
Directors Whose Terms Year in Which
Expire at the 2002 Service as a
Annual Meeting Principal Occupation Director Began
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Douglas C. Williamson, 49 Senior Vice President and Managing 1996
Director of Bank of America
Capital Investors
William C. Thompson, 46 Senior Director of Derailment 1999
Prevention for Union Pacific
Railroad Company
----------------------------------------------------------------------------------------------------------------------
</TABLE>
Douglas C. Williamson
Mr. Williamson was elected to the Board of Directors in 1996. Mr.
Williamson is currently a Managing Director and Senior Vice President of Bank of
America Capital Investors (BCI). Mr. Williamson joined NationsBanc Capital
Corporation in 1989. Prior to that, he had eight years of experience in senior
management with two operating companies (including roles as president) and six
years of experience in corporate finance and corporate lending with Rotan Mosle,
W.R. Grace and Cleveland Trust. Mr. Williamson serves on the boards of directors
of the following companies: CallWare Technologies, Inc. (develops and markets
open architecture
4
<PAGE>
computer telephony software solutions); Empirical Software, Inc. (develops
software targeted for the market of client/server performance and reliability
management tools); GX Technology Corporation (software developer and imaging
services company that is a leading independent supplier of 2D and 3D seismic
modeling, imaging software products, and imaging services used in oil and gas
exploration); HAHT Software, Inc. (provides enterprise Web application software
development solutions); Med Solutions, Inc. (provides radiology utilization
management services for the health care industry); Memorial Operations Company
(acquires and manages cemeteries and funeral homes); Takeout Taxi Holdings, Inc.
(provides restaurant delivery services through company-owned and franchised
stores); and Z-Tel Technologies, Inc. (provider of telephony-related services to
retail customers, such as inexpensive long-distance, voice-mail and "follow-me"
services). Mr. Williamson earned his MBA from Columbia University and his BA
from Denison University and later earned his CPA. Mr. Williamson serves on the
Company's Board of Directors as a nominee of the holders of the Series F and G
Preferred Shares.
William C. Thompson
Mr. Thompson was elected to the Board of Directors in 1999. In January
1999, Mr. Thompson was appointed Senior Director of Derailment Prevention for
Union Pacific Railroad Company after having completed one year as a Director of
Derailment Prevention. Prior to these appointments, Mr. Thompson served as Union
Pacific's Director of Engineering Research for approximately ten years. He has
been active in many industry organizations, serving as the Chairman of the
National Transportation Research Board's Committee on Railway Maintenance and on
the Board of Directors of the American Railway Engineering and
Maintenance-of-Way Association. Mr. Thompson holds Bachelor of Science degrees
in Civil Engineering and Environmental Engineering from the University of
Wisconsin.
Russell L. Allen
Mr. Allen is a management advisor to the Company and in that capacity has
served as Treasurer and Chief Financial Officer since August 1999. Prior to that
time, Mr. Allen served various clients in the capacity of independent management
advisor. Mr. Allen holds a Bachelors and Masters Degree in Accounting from the
University of Texas at Austin and is a Certified Public Accountant.
Board Meetings And Committees
-----------------------------
During the fiscal year ended December 31, 1999, the Board of Directors met
three times. All directors attended at least 75% of the meetings of the Board
and committees of which they are a member.
The Board of Directors has established two committees to allow the Board to
focus specific attention on critical areas of the Board's management and
monitoring of the Company's business. From time to time, the committees will
make recommendations to the Board as necessary. The committees that were
established and the current directors assigned to each committee are as follows:
Audit:
Douglas C. Williamson
Edwin H. Knight
Compensation:
Douglas C. Williamson
Edwin H. Knight
The Audit Committee's primary duties and responsibilities are to: monitor
the integrity of the Company's financial reporting process and systems of
internal controls regarding finance, accounting, and legal compliance; monitor
the independence and performance of the Company's independent auditors; provide
an avenue of communication among the independent auditors, management, and the
Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to the
independent auditors as well as anyone in the organization. The Audit
5
<PAGE>
Committee has the ability to retain, at the Company's expense, special legal,
accounting, or other consultants or experts it deems necessary in the
performance of its duties.
In June 2000 the company adopted a formal written Audit Committee charter
which complies with Nasdaq's Marketplace Rules and has certified that the Audit
Committee will review and assess the adequacy of the charter on an annual basis.
The membership of the Audit Committee is designed to include a minimum of
two independent directors. The Audit Committee met once during 1999.
The purpose of the Compensation Committee is to recommend compensation
policies for the Company's senior management and to establish and administer the
Company's stock-based compensation 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 and monitoring and reviewing the
Company's compensation policies for all employees.
The membership of the Compensation Committee is designed to include at
least two outside (non-employee) directors. The Compensation Committee did not
meet during 1999.
Directors' Compensation
-----------------------
Mr. Thompson receives $1,000 for each regularly scheduled Board meeting and
$500 for each teleconference Board meeting, special or committee meeting. Mr.
Vella receives $1,000 for each regularly schedule Board meeting. All other
directors of the Company receive no cash compensation in connection with their
services as director. See Security Ownership of Certain Beneficial Owners and
Management for stock options granted to Directors.
Agreements With Holders Of Preferred Stock
------------------------------------------
Pursuant to agreements relating to the purchase of the Series F and G
Preferred Stock (the "Purchase Agreements") between the Company, Bank of America
and certain other investors (collectively, with BCI, the "Investors"), the
Company has agreed to nominate to the Board of Directors, for so long as the
Series F and G Preferred Stock are owned by the Investors or permitted assignees
or permitted transferees, (i) up to four (4) members designated by the holders
of a majority in interest of the Series F and G Preferred Stock taken together
as a group, at least one (1) of whom shall be designated by BCI so long as BCI
owns at least fifty percent (50%) of the Series F and G Preferred Stock; (ii) up
to 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 and G Preferred Stock taken together as a
group. Currently, pursuant to the Purchase Agreements, the Investors' nominees
are Douglas C. Williamson and Edwin H. Knight.
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 and G Preferred Stock taken together as a
group 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
majority shall be designees of BCI.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth a summary of the compensation paid or
accrued for the fiscal years ended December 31, 1997, 1998 and 1999 by the
Company to or for the benefit of its President and Chief Executive Officer. No
other executive officer's compensation exceeded $100,000 for the year ended
December 31, 1999.
<TABLE>
<CAPTION>
================================================================================================================================
Long Term Compensation
----------------------------------------
Annual Compensation Awards Payouts
--------------------------------------------------------------------------------------------------------------------------------
Name Other
and Annual Restricted Stock All Other
Principal Compen- Stock Options/ LTIP Compen-
Position Year(s) Salary($) Bonus($) sation($) Award(s) SARS (#) Payouts($) sation($)
($)
---------------- ------- --------- -------- --------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Henry W. Sullivan 1999 92,481 40,000 3,952(2)
Chief Executive 1998 91,336 2,859(2)
Officer and 1997 90,000 2,970(2)
President
================================================================================================================================
Tim B. Tarrillion 1999 175,318 - - - - - 2,336(2)
Former Chief 1998 193,275 - - - - - 3,504(2)
Executive Officer 1997 184,833 - - - 44,444(1) - 6,951(2)
and President
================================================================================================================================
</TABLE>
(1) Consists of options granted during fiscal year ended December 31, 1995
which were repriced as of July 10, 1997.
(2) Represents life insurance premiums paid by the Company on policies on
the executives' lives and matching contributions to the Company's 401-K
plan.
Stock Options
-------------
The following table sets forth options granted during the year ended
1999 to the named executive officer. No stock appreciation rights (SARs) have
been granted.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
----------------------------------------------------------------------------
Number of Percent Of
Securities Total
Underlying Options/SARs
Options/SARs Granted To Exercise or Expiration
Granted Employees In Base Price Date
Name (#) Fiscal Year ($/Sh)
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------
Henry W. Sullivan 40,000 48% $3.00 2/22/09
----------------------------------------------------------------------------
</TABLE>
7
<PAGE>
The following table sets forth for the named executive officer
information regarding stock options exercised by such officer during the 1999
fiscal year, together with the number and value of stock options held at 1999
fiscal year-end, each on an aggregated basis.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Aggregated Option Exercises in the 1999 Fiscal Year
and Fiscal Year-End Option Value
--------------------------------------------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised In-the-Money
Number of Options at Options at
Shares Fiscal Year-End Fiscal Year-End
--------------- ---------------
Acquired Value Exercisable/ Exercisable/
on Exercise Realized Unexercisable Unexercisable (1)
Name
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
Henry W. Sullivan None -- 32,222/30,000 $0/$0
--------------------------------------------------------------------------------------------------------
</TABLE>
----------
(1) The last sales price of the Company's Common Stock as reported on the
NASDAQ SmallCap Market on December 31, 1999 was $2.938 which was lower
than the exercise price of the options.
Employment Agreements
---------------------
Effective December 23, 1998 the Company entered into an agreement with
Mr. Tarrillion in full settlement of his employment contract. The agreement
provides for the resignation of Mr. Tarrillion's officer positions as of January
22, 1999, with the continuation of his employment as a full-time consultant
through March 31, 1999. From April 1 through December 31, 1999, Mr. Tarrillion
was available on an "as-needed" basis and his salary and benefits continued
through such later date. As part of the agreement, the exercise price of 55,555
options was reduced from $9.00 to $4.50. All of these options are currently
vested. In addition, Mr. Tarrillion agreed that he would not seek re-election to
the Board of Directors when his term expired at the 1999 Annual Meeting of
Stockholders.
1999 Stock Incentive Plan and Repricing of Certain Outstanding Options
----------------------------------------------------------------------
At the annual meeting of the Company in 1999, stockholders approved the
Company's 1999 Stock Incentive Plan (the "Plan"). The Plan authorizes the
Compensation Committee to grant options in the maximum amount of 10% of the
total issued and outstanding shares of the Company or reserved for issuance upon
the conversion or exercise of outstanding convertible securities. Of these
options, up to a maximum of 1,000,000 shares may be issued pursuant to incentive
stock options granted under the Plan.
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth as of July 17, 2000 certain information
with respect to the beneficial ownership of the Company's Common Stock and
Series F, Series G-I, Series G-II, Series G-III and Series H Shares by any
person (including any "group" as that term is used in Section 13(d)-3(d) of the
Exchange Act) known by the Company to be the beneficial owner of more than five
percent (5%) of any class of the Company's voting securities based upon filings
with the Securities and Exchange Commission. As of July 17, 2000, there were
5,992,805 outstanding shares of Common Stock, 84,898 outstanding Series F
Shares, 14,846 outstanding Series G-I Shares, 20,004 outstanding Series G-II
Shares, 8,507 outstanding Series G-III Shares and 8,102 outstanding Series H
Shares.
Common Stock
Amount and Nature
of Beneficial Percentage
Name and Address of Beneficial Owner Ownership/(1)/ of Class/(1)/
------------------------------------ -------------- -------------
Bank of America Capital Investors 4,712,817/(2)/ 44.0%
901 Main Street, 22/nd/ Floor
Dallas, Texas 75202
Avalanche Resources Ltd. 1,000,000 16.7%
P.O. Box 140987
Dallas, Texas 75214
David S. Holland 376,767/(3)/ 5.9%
1 Riverway, Suite 1700
Houston, Texas 77056
Harrison Interests, Ltd. 340,660/(4)/ 5.4%
Chase Bank Bldg.
712 Main, Suite 1900
Houston, Texas 77002
Hobo Partners 328,108/(5)/ 5.2%
c/o Chronos Management
6040 Camp Bowie Blvd.
Suite 1
Fort Worth, TX 76116
____________________
9
<PAGE>
/(1)/ Calculated in accordance with Item 403 of Regulation S-B and Rule
13d-3(d) as promulgated under the Exchange Act. Includes shares of
Common Stock which the holder has the right to acquire upon exercise or
conversion of outstanding options, warrants or other convertible
securities (such as the Series F, Series G-I, G-II and G-III Shares)
within sixty (60) days of July 17, 2000. Calculations were made using
the conversion prices as of July 17, 2000 as follows: Series F -
$3.3075; Series G-I - $2.1293; Series G-II - $.86625; Series G-III -
$1.4166; Series H - $1.85.
/(2)/ Includes 4,145,929 shares of Common Stock issuable upon conversion of
Series F, Series G-I and Series G-II Shares. Includes 555,556 shares of
Common Stock which may be acquired upon exercise of Common Stock
purchase warrants and 11,332 shares of Common Stock which may be
acquired on the exercise of options. Does not include 18,668 shares of
Common Stock issuable upon exercise of options granted to Mr.
Williamson in his capacity as Director which were assigned to Bank of
America Capital Investors and which will vest periodically through
January 31, 2003.
/(3)/ Includes 376,767 shares of Common Stock issuable upon conversion of
Series G-II and G-III Shares.
/(4)/ Includes 285,104 shares of Common Stock issuable upon conversion of
Series F and Series G-I Shares. Includes 55,556 shares of Common Stock
which may be acquired upon exercise of Common Stock purchase warrants.
/(5)/ Includes 328,108 shares of common stock issuable upon conversion of
Series H Shares.
10
<PAGE>
Series F and Series G Subseries I Preferred Stock
<TABLE>
<CAPTION>
Amount and
Amount and Nature of
Nature of Series G
Name and address of Series F Percentage Subseries I Percentage
Beneficial Owner Ownership of Class Ownership Of Class
--------------- --------- -------- --------- --------
<S> <C> <C> <C> <C>
Bank of America Capital 74,069 87.2% 13,023 87.7%
Investors
901 Main Street, 22/nd/ Floor
Dallas, Texas 75202
Harrison Interests, Ltd. 7,407 8.7% 1,302 8.8%
Chase Bank Bldg.
712 Main, Suite 1900
Houston, Texas 77002
</TABLE>
___________________
11
<PAGE>
Series G Subseries II and Series G Subseries III Preferred Stock
<TABLE>
<CAPTION>
Amount and Amount and
Nature of Nature of
Series G Series G
Name and address of Subseries II Percentage Subseries III Percentage
Beneficial Owner Ownership of Class Ownership Of Class
---------------- --------- -------- --------- --------
<S> <C> <C> <C> <C>
Bank of America Capital Investors 11,217 56.1% - -
901 Main Street, 22/nd/ Floor
Dallas, Texas 75202
Dan J. Harrison III 1,055 5.3% - -
Chase Bank Bldg.
712 Main, Suite 1900
Houston, Texas 77002
David S. Holland 2,804 14.0% 751 8.8%
1 Riverway, Suite 1700
Houston, Texas 77056
Bruce F. Harrison, as Trustee 1,110 5.5% - -
Chase Bank Bldg.
712 Main, Suite 1900
Houston, Texas 77002
Richard M. Cutler, Jr. - - 561 6.6%
50 1/2 Legare Street
Charleston, South Carolina 29401
Michael T. Finch - - 1,502 17.7%
Route 1, Box 133
Allendale, South Carolina 29810
David S. Holland Jr. - - 501 5.9%
906 East 5/th/ Street, Suite 202
Austin, Texas 78702
</TABLE>
Continued......
12
<PAGE>
Series G Subseries II and Series G Subseries III Preferred Stock (continued)
<TABLE>
<CAPTION>
Amount and Amount and
Nature of Nature of
Series G Series G
Name and address of Subseries II Percentage Subseries III Percentage
Beneficial Owner Ownership of Class Ownership of Class
---------------- --------- -------- --------- --------
<S> <C> <C> <C> <C>
William I. Franklin - - 1,150 13.5%
5804 Wedgmont Circle N.
Fort Worth, Texas 76133
John H. Wiegman - - 500 5.9%
c/o Founders Capital Management
5 Post Oak Park, Suite 2150
Houston, Texas 77025
</TABLE>
__________________
13
<PAGE>
Series H Preferred Stock
Amount and
Nature of
Name and address of Series H Percentage
Beneficial Owner Ownership of Class
---------------- --------- --------
Hobo Partners 6,070 74.9%
c/o Chronos Management
6040 Camp Bowie Blvd.
Suite 1
Fort Worth, Texas 76116
Andrew M. Grisebaum 1,000 12.3%
c/o Olympia Marketing Systems
2222 Marquart
Houston, Texas 77027
Chris Scully 500 6.2%
5906 Crab Orchard
Houston, Texas 77057
__________________
14
<PAGE>
Security Ownership Of Management
--------------------------------
The following table sets forth as of July 17, 2000 the beneficial ownership
of the Company's Common Stock by (i) the executive officer identified in the
Summary Compensation Table appearing herein; (ii) each director and nominee for
director; and (iii) all directors and executive officers as a group. As of July
17, 2000, there were 5,992,805 outstanding shares of Common Stock, 84,898
outstanding Series F Shares, 14,846 outstanding Series G- I Shares, 20,004
outstanding Series G-II Shares, 8,507 outstanding Series G-III shares and 8,102
outstanding Series H shares.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percentage
Name and Address of Beneficial Owner Ownership(1) of Class(1)
------------------------------------ ---------------------- -----------
<S> <C> <C>
Henry W. Sullivan 298,496/(2)/ 4.9%
14315 W. Hardy Road
Houston, Texas 77060
William C. Thompson 16,664/(3)/ -
1416 Dodge
Omaha, Nebraska 68179
Douglas C. Williamson -/(4)/ -
901 Main Street, 22/nd/ Floor
Dallas, Texas 75202
Edwin H. Knight 11,332/(5)/ -
707 Travis, Suite 1900
Houston, Texas 77002
Frank J. Vella 11,000/(6)/ -
1908 Augusta Landing
Houston, Texas 77057
All Directors and Executive Officers as a Group 402,672 6.5%
(6) persons
</TABLE>
_______________________
/(1)/ Calculated in accordance with Item 403 of Regulation S-B and Rule 13d-
3(d) as promulgated under the Exchange Act. Includes shares of Common
Stock which the holder has the right to acquire upon exercise or
conversion of outstanding options, warrants or other convertible
securities (such as the Series F, Series G-I, Series G-II, Series G-III
and Series H Shares) within sixty (60) days of July 17, 2000.
Calculations were made using the conversion prices as of July 17, 2000 as
follows: Series F - $3.3075; Series G-I - $2.1293; Series G-II -$.86625;
Series G-III - $1.4166; Series H - $1.85.
/(2)/ Dr. Sullivan is deemed to beneficially own 176,851 shares of Common Stock
by virtue of his position as a principal executive officer of Dune
Holdings, L.L.C. which owns 61,728 shares of Common Stock, and Thor
Ventures, L.C. which owns 115,123 shares of Common Stock. Includes 30,505
shares of Common Stock issuable upon the conversion of Series G-II
Shares. Includes 4,585 shares owned through a profit sharing plan and
68,222 shares which may be acquired upon exercise of options. Does not
include 84,000 shares issuable upon exercise of options which vest
periodically through February 21, 2003. Includes 16,000 shares of a
common stock grant dated January 31, 2000; does not include 24,000 shares
of the grant that vest ratably over a three-year period commencing
January 1, 2000.
15
<PAGE>
/(3)/ Includes shares which may be acquired upon exercise of options. Does not
include 33,336 shares issuable upon exercise of options which do not vest
until May 17, 2002 or sooner based on attendance at future Board
meetings.
/(4)/ Mr. Williamson is a Senior Vice President at Bank of America Capital
Investors ("BCI"). Does not include 4,145,929 Shares of Common Stock
issuable to BCI upon conversion of its holdings of Series F, Series G-I
and Series G-II Shares. Does not include 555,556 shares of Common Stock
which may be acquired by BCI upon exercise of Common Stock purchase
warrants. Does not include 30,000 shares of Common Stock issuable upon
the exercise of options granted to Mr. Williamson in his capacity as
Director which were assigned to Bank of America Capital Investors and
which will vest periodically through January 31, 2003.
/(5)/ Includes shares which may be acquired on exercise of options. Mr. Knight
manages Harrison Interests Ltd. Does not include 535,047 shares of Common
Stock issuable to Harrison Interests, Ltd., Bruce F. Harrison, Trustee
and Mr. Dan J. Harrison III, upon conversion of their holdings of Series
F, Series G-I and Series G-II Shares. Does not include 135,135 shares of
Common Stock issuable to Bruce Harrison on conversion of his $250,000
convertible note. Does not include 55,556 shares of Common Stock which
may be acquired by Harrison Interests, Ltd. upon exercise of Common Stock
purchase warrants. Does not include 18,668 shares of Common Stock
issuable upon the exercise of options granted to Mr. Knight in his
capacity as Director which will vest periodically through January 31,
2003.
/(6)/ Includes 8,000 shares of Common Stock which may be acquired on exercise
of options. Does not include 12,000 shares of Common Stock issuable upon
exercise of options granted to Mr. Vella in his capacity as Director
which will vest periodically through April 11, 2003.
Certain Relationships and Related Transactions
----------------------------------------------
In December 1999, the company borrowed $250,000 from an individual that has
a representative on the Board of Directors of the Company and issued a note
payable convertible at the lender's option. The note is convertible at the
lesser of: $1.85 or the market value on the date of notice of conversion, or the
average market value for the twenty trading days preceding notice of conversion,
but not less than $0.40. Additionally, it can be converted, at the lender's
option, into any preferred shares issued by the Company that is convertible into
common shares of the Company.
In July 1999, the Company entered into a Professional Services Agreement
with Mr. Allen whereby he provides financial advice to the Company and serves as
its Treasurer and Chief Financial Officer. Mr. Allen is compensated on an hourly
basis and is paid 40% in cash and 60% in common stock of the Company. The term
of the agreement ended on March 31, 2000, but is extended on a month-to-month
basis. At June 30, 2000, Mr. Allen was due 65,180 shares of the Company's common
stock.
In May 1998, Bank of America Capital Investors purchased 10,000 Series G-II
Shares for cash proceeds of $1,000,000. Mr. Williamson, Chairman of the Board
and Director of the Company, is a Senior Vice President of BCI. In November
1998, Mr. Sullivan and Mr. Tarrillion purchased 250 and 250 shares of the
Company's Series G-II Shares for cash proceeds of $25,000, and $25,000,
respectively. These transactions were completed on terms identical to those
negotiated with third-party investors.
Effective December 23, 1998 the Company entered into an agreement in full
settlement of Mr. Tarrillion's employment contract. See "Executive
Compensation -Employment Agreements."
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the shares of stock present in person
or by proxy is required to elect nominees as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
---
TO THE BOARD OF DIRECTORS
16
<PAGE>
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 Audit
Committee to serve as the independent auditors for the Company for the fiscal
year ending December 31, 2000. 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 of stock present in person
or by proxy is required to approve the ratification of BDO Seidman, LLP as the
Company's independent auditors for the fiscal year ending December 31, 2000.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF BDO SEIDMAN,
---
LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE 2000 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.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors and certain officers of the Company, as well as persons who own more
than 10% of a registered class of the Company's equity securities ("Reporting
Persons"), to file reports with the Securities and Exchange Commission. The
Company believes that during the year ended December 31, 1999 all Reporting
Persons timely complied with all filing requirements applicable to them.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
The Company currently intends to hold its 2001 Annual Meeting of
Stockholders in June 2001 and to mail proxy statements relating to such meeting
in May 2001. In order for proposals of stockholders to be considered for
inclusion in the proxy statement and form of proxy relating to the Company's
2001 Annual Meeting of Stockholders, such proposals must be received by the
Company no later than January 23, 2001 and must otherwise be in compliance with
all applicable laws and regulations.
By Order of the Board of Directors
/s/ Douglas C. Williamson
----------------------------------
Douglas C. Williamson
Chairman of the Board
Dated: July 17, 2000
17
<PAGE>
NORTH AMERICAN TECHNOLOGIES GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Henry W. Sullivan and Russell L. Allen and
each of them proxies 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 July 17,
2000, at the Annual Meeting of Stockholders of North American Technologies
Group, Inc. to be held on July 31, 2000 and at any adjournments or
postponements thereof, and to vote on this form and, in their discretion, upon
such other matters not specified as may come before said meeting.
Proposal 1--Election of Directors
Nominees: Edwin H. Knight, Frank
J. Vella CHANGE OF ADDRESS [_]
Comments on Reverse Side
[_] FOR all nominees [_] (See reverse)
WITHHELD from all nominees
[_] FOR, except vote withheld from the following
nominee: ________________________________________________
Proposal 2--Ratification of the appointment of BDO Seidman, LLP as Independent
Auditors for the Company.
[_] FOR [_] AGAINST [_] ABSTAIN
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 THE RATIFICATION OF BDO SEIDMAN, LLP AS
INDEPENDENT AUDITORS FOR NORTH AMERICAN TECHNOLOGIES GROUP, INC. FOR THE 2000
FISCAL YEAR.
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.
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.)
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.
PLEASE SIGN, DATE AND RETURN YOUR PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE REQUIRED IF MAILED IN THE UNITED
STATES.
