<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] 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 (S) 240.14a-11(c) or (S) 240.14a-12
PHOENIX RESOURCES TECHNOLOGIES, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(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:
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(4) Date Filed:
July 7, 2000
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<PAGE>
PHOENIX RESOURCES TECHNOLOGIES, INC.
15945 Quality Trail North
Scandia, MN, 55073
(888) 709-3975
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 21, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Phoenix
Resources Technologies, Inc., a Nevada Company ("Company"), will be held at 2nd
Floor, 827 West Pender Street, Vancouver, BC, Canada on Friday, July 21, 2000 at
10:30 a.m. local time, to consider and act upon:
1. The election of five nominees as Directors to the Company's Board of
Directors who will serve until the Annual Meeting of Shareholders in 2001.
2. To approve the amended and restated Company's 1999 Stock Option Plan
increasing the number of shares of Common Stock available for issuance
thereunder from 900,000 to 1,500,000.
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Shareholders of record at the close of business on May 23, 2000 are entitled to
notice of, and to vote at, the Annual Meeting. You are cordially invited to
attend. However, whether you expect to be present at the meeting or not, please
mark, date and sign the enclosed proxy and return it in the envelope, which has
been provided. The proxy, solicited by the Board of Directors, is revocable and
will not affect your right to vote in person if you attend.
By Order of the Board of Directors,
/s/ Ben Traub
BENJAMIN TRAUB, Chairman of the
Board
Vancouver, British Columbia
June 30, 2000
<PAGE>
PHOENIX RESOURCES TECHNOLOGIES, INC.
15945 Quality Trail North
Scandia, Minnesota 55073
June 30, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders of
Phoenix Resources Technologies, Inc. (the "Company") to be held on July 21, 2000
at 10:30 a.m. (local time) at the Company's business office at: Second Floor,
827 West Pender Street, Vancouver, B.C., Canada. At this meeting, you will be
asked to vote, in person or by Proxy, on the following matters: (i) the
election of five Directors to the Board of Directors; (ii) the approval of the
amended and restated Company's 1999 Stock Option Plan increasing the number of
shares of Common Stock available for issuance thereunder from 900,000 to
1,500,000; and (iii) any other business as may properly come before the meeting
or any postponement or adjournment thereof. The matters listed in the Notice of
Meeting are described in detail in the accompanying Proxy Statement. Included
with these soliciting materials is a Proxy for voting, with instructions. A
copy of the Company's 10KSB accompanies this proxy statement. Regardless of
your plans for attending in person, it is important that your shares be
represented and voted at the 2000 Annual Meeting. Accordingly, please give
careful consideration to the items to be voted upon, complete and sign the Proxy
and return it by mail or fax as directed on the Proxy. We look forward to
receiving your vote and seeing you at the meeting.
Sincerely,
Benjamin Traub
Chairman of the Board
<PAGE>
PHOENIX RESOURCES TECHNOLOGIES, INC.
15945 Quality Trail North
Scandia, MN, 55073
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON JULY 21, 2000
Shareholders Meeting
This Proxy Statement and enclosed Proxy are furnished in connection with the
solicitation of proxies by the Board of Directors of PHOENIX RESOURCES
TECHNOLOGIES, INC. (the "Company"), to be used at the Annual Meeting of
Shareholders of the Company to be held on Friday, July 21, 2000 at 10.30 A.M.,
or at any adjournment or postponement thereof, for the purposes set forth herein
and in the accompanying Notice of Annual Meeting of Shareholders. Any
shareholder giving a proxy in the accompanying form may revoke it at any time
prior to its exercise. The expense of solicitation of proxies will be borne by
the Company. This Proxy Statement and form of proxy are being first sent to or
given to shareholders entitled to vote at the Annual Meeting of the Company on
or about July 21, 2000. The mailing address of the Company's business offices is
2nd Floor, 827 West Pender Street, Vancouver BC V6C 3G8, Canada.
Shareholders Entitled To Vote
Only shareholders of record of the Company's Common Stock at the close of
business on May 23, 2000 will be entitled to vote at the meeting or any
adjournment thereof. On that date, 9,697,100 shares of Common Stock of the
Company (the "Common Stock") were issued and outstanding. Each shareholder is
entitled to one vote for each share held of record on the record date. The
holders of a majority of the total shares of common stock outstanding at the
record date whether present at the Annual Meeting in person or represented by
proxy, will constitute a quorum for the transaction of business at the Annual
Meeting. The shares held by each shareholder who signs and returns the enclosed
Proxy will be counted for the purposes of determining the presence of a quorum
at the Annual Meeting, whether or not the shareholder abstains on all or any
matter to be acted on at the Annual Meeting. Abstentions and broker non-votes
both will be counted toward fulfillment of quorum requirements. A broker non-
vote occurs when a nominee holding shares for a beneficial owner does not vote
on a particular proposal because the nominee does not have discretionary voting
power with respect to that proposal and has not received instructions from the
beneficial owner. Shares cannot be voted at the Annual Meeting unless the holder
is present in person or represented by proxy. A complete list of shareholders
entitled to vote at the Annual Meeting will be open to examination by any
shareholder during the meeting.
<PAGE>
Voting at the Annual Meeting
Shares represented by a proxy in the accompanying form, unless previously
revoked, will be voted at the meeting if the proxy, properly executed, is
received by the Company before the close of business on July 18, 2000. Shares
represented by a proxy received after that time will be voted if the proxy is
received by the Company in sufficient time to permit the necessary examination
and tabulation of the proxy before a vote is taken. A proxy may be revoked at
any time prior to the voting at the Annual Meeting by giving written notice to
the Secretary of the Company bearing a later date than the proxy, by submitting
a later-dated proxy, or by voting the shares represented by such proxy in person
at the Annual Meeting.
The election of Directors will require the affirmative vote of a plurality of
the shares of Common Stock represented and voting in person or by proxy and
entitled to vote at the Annual Meeting. Abstentions and broker non-votes will
not be counted as votes cast in connection with determining the plurality
required to elect a Director and will have no effect on the outcome of that
vote.
The affirmative vote of a majority of the shares of Common Stock voted in person
or by proxy at the Annual Meeting is required to approve the adoption of the
Company's 1999 Stock Option Plan. Consequently, abstentions and broker non-
votes will have no effect on the proposal to adopt the Company's 1999 Stock
Option Plan.
Proxies
Proxies for use at the Annual Meeting are being solicited by the Board of
Directors of the Company from its Shareholders.
When the enclosed Proxy is properly signed and returned, the shares which it
represents will be voted at the Annual Meeting in accordance with the
instructions noted thereon. In the absence of such instructions, the shares
represented by a signed Proxy will be voted in favor of the nominees for
election to the Board of Directors, and in favor of Proposal 2.
Shareholders who hold their shares through an intermediary must provide
instructions on voting as requested by their bank or broker. A Shareholder who
signs and returns a Proxy may revoke it at any time before it is voted by taking
one of the following actions: (i) giving written notice of the revocation to the
Secretary of the Company; (ii) executing and delivering a Proxy with a later
date; or (iii) voting in person at the Annual Meeting.
MATTERS TO COME BEFORE THE MEETING
ELECTION OF DIRECTORS
Five Directors will be elected, each to hold office until the Company's 2001
Annual Meeting and until his or her successor is elected and qualified, or until
the Director's resignation or removal. Three of the nominees (Traub, Seitz and
Luthy) are currently Directors of the Company.
-2-
<PAGE>
The individuals who will be nominated by the Board of Directors for election at
the Annual Meeting are listed below. If, as a result of circumstances not now
known or foreseen, any of such nominees shall be unavailable to serve as a
Director, proxies will be voted for the election of such other person or persons
as Benjamin Traub and Robert Seitz and each of them with full power of
substitution may select.
Directors will be elected by a plurality of the votes of the shares present in
person or represented by proxy entitled to vote at the meeting. Abstentions and
broker non-votes will not be counted as votes cast in connection with
determining the plurality required to elect a Director and will have no effect
on the outcome of that vote. PROXIES WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES LISTED BELOW UNLESS THE SPECIFICATION IS MARKED ON THE PROXY INDICATING
THAT AUTHORITY TO DO SO IS WITHHELD.
<TABLE>
<CAPTION>
NAME AND AGE OF FIRST ELECTED OR
DIRECTOR PRINCIPAL OCCUPATION APPOINTED
-------------- -------------------- ----------------
<S> <C> <C> <C>
Benjamin Traub 36 Chairman of the Board 1999
Robert Seitz 30 Director 1999
Ellen Luthy 55 Secretary/Treasurer 2000
Richard Monson 54 Businessman/Professor Nominee
Warren Gacsi 43 Consultant/Businessman Nominee
</TABLE>
Nominated Directors:
--------------------
Benjamin E. Traub
Mr. Traub is presently Chairman of the Board and has served as a Director since
November, 1999. From November 1999 until June 2000 he served as President and
Chief Executive Officer of the Company. From 1991 to 1997, Mr. Traub was
President of the Vancouver, British Columbia based, Imagenation Media Corp., a
marketing consulting firm in relationship and direct marketing. Mr. Traub
presently serves as Chief Executive Officer of Cyclone Financing Group, Inc., a
Vancouver, British Columbia based consulting firm, specializing in incubating
public companies and in corporate management. Mr. Traub is responsible for
developing corporate strategies and overall business development. Mr. Traub is
the beneficial owner of Wealthy Investor Network Inc., the Company's largest
shareholder.
Ellen Luthy
Ms. Luthy was appointed a Director June 29, 2000 to fill the vacancy created by
Ms. Judee Fayle's resignation and brings over 20 years of accounting and
securities experience to the Company including: four years with The Gujral
Group, a private management Company, where she was responsible for the
accounting and administrative functions of six public companies and a private
management Company, as well as filings for the public companies with the SEC;
three years with Seaboard Auto Leasing; and three years with International
Medical Systems in San Mateo, California as an Accountant. Ms Luthy graduated
from San Jose State University, San Jose, California, with a Bachelor of Science
in Accounting/Finance.
-3-
<PAGE>
Robert Seitz
Mr. Seitz has served as Director of the Company since November, 1999. From
November 1999 until June 2000 Mr. Seitz served as a Vice President of the
Company. From April of 1998 until August of 1999, Mr. Seitz designed and set up
various web pages for the Vancouver based Company Public Image Inc., a Company
that provides contract labor for client firms, including dissemination of
information and development of corporate overviews. From November 1996 to
February 1998, Mr. Seitz provided customer relations and event co-ordination
services to the Vancouver Trade and Convention Center. From June of 1994 to
October of 1996, Mr. Seitz provided customer relations, promotion and marketing
services to Host International Canada, a Vancouver, British Columbia based
Company which provides airport services.
Richard Monson
Mr. Monson has been the owner of an IT/IS staffing and management consulting
Company in Kansas City since 1996. Prior to this, he worked for AT&T for thirty
years, as a process engineer, supervisor and Project Manager. Among his
accomplishments in this latter role he identified and implemented major changes
to an existing hardware deployment plan, which resulted in reducing capital
costs by $10 million; he created and implemented a plan to transfer the project
management function, which resulted in reducing the development cycle by 30%;
and he created and implemented functional team concepts into the systems
development process, which resulted in reducing the cycle time for enhancements
by 25%. His particular strengths are in process definition and improvement
organizational structure and staffing. Since 1992 he has been Adjunct Professor,
Ottawa University, Kansas City, teaching courses in Behavior in Organizations,
Small Business Administration and New Business Ventures. He graduated from
Ottawa University with a Bachelor of Arts in Business Administration and from
Webster University with a Master of Arts in Business Administration.
Warren Gacsi
MIRA CONSULTING owner Warren Gacsi has served business and industry since 1979.
He has provided consulting services in the areas of business startups,
investment proposals, private placements, SBA loan packages and construction
projects. His strengths include business planning, market research and
competitive intelligence including strategic planning for numerous companies.
Mr. Gacsi has managed operations and production for two electronic firms and
also held Design Engineering positions in the electronics industry.
Mr. Gacsi's military service in the 1970's was devoted to electronic
surveillance and intelligence operations for the US Army, Joint Chiefs of Staff,
and the National Security Agency. He holds Masters and Bachelors degrees in
Business Administration from the University of Phoenix as well as an Associates
degree in Architecture. Mr. Gacsi's expertise includes project management,
strategic planning, organizational management, marketing, finance, economics,
distribution channels, and partnering.
-4-
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD
During the Company's fiscal year ended October 31, 1999, the Board of Directors
held no meetings. The Board of Directors approved various corporate actions
pursuant to unanimous consent of the Directors.
On June 20, 2000 the Company appointed a Compensation Committee comprised of
Robert Seitz and Judee Fayle. The Compensation Committee is responsible for
recommending salaries and other compensation arrangements for officers of the
Company and performing such functions as may be delegated to it under the
provisions of any bonus, stock option or other compensation plan adopted by the
Company. Due to Ms. Fayle's resignation of her Directorship on June 29, 2000 the
Company will be appointing her replacement to the Compensation Committee after
the Annual Meeting.
The Company does not currently have an Audit Committee but intends to establish
an Audit Committee subsequent to this Annual Meeting.
Directors of the Company do not receive any compensation for services performed
in their capacity as Directors other than as described herein. During the
current fiscal year, Directors have received grants of options to purchase the
Company's Common Stock. The Board of Directors will determine the vesting
schedule for options to be granted to Directors, based on the recommendations of
the Compensation Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL PERSONS
NOMINATED BY THE BOARD.
ADOPTION OF THE PHOENIX RESOURCES TECHNOLOGIES INC.
STOCK OPTION PLAN
The Board has approved, subject to shareholder approval, a proposal to amend and
restate the Company's 1999 Stock Option Plan ("1999 Plan"). The amendment will
increase the number of shares of Common Stock available for grant under such
plan from 900,000 to 1,500,000, an increase of 600,000 shares of Common Stock.
As of June 30, 2000, there were approximately 273,500 outstanding options to
purchase shares of Common Stock under the 1999 Plan. The number of options
exercised to date is 299,000. Therefore, in the event that the proposed
amendment is approved, approximately 927,500 options would be available for
grant under the 1999 Plan. The text of the proposed Amended/Restated 1999 Plan
is attached to this Proxy Statement. The 1999 Plan description below is
qualified in its entirety by reference to the text of the 1999 Plan.
The 1999 plan provides for the grant of non-qualified stock options and
incentive stock options to employees, consultants and Directors of the Company.
Shares of Common Stock may be authorized but unissued, or reacquired shares.
-5-
<PAGE>
Participants in the 1999 Plan are determined by a Committee consisting of not
fewer than two Non-Employee Directors within the meaning of Rule 16b-3 of the
Exchange Act. All stock options granted under the 1999 Plan will be evidenced by
Agreements that will be subject to the applicable provisions of the Plan and to
such other provisions as the Committee may adopt. The Agreements will specify
the duration of the stock option. However, no stock option will be exercisable
later then the tenth anniversary of its grant. Such Agreements will also specify
whether the options are intended as incentive stock options or non-qualified
stock options. The 1999 Plan will terminate on November 28, 2009, unless sooner
determined by the Board.
The proposed amendment and restatement will (i) clarify the Board's powers under
the 1999 Plan; (ii) increase the number of shares available for stock incentives
under the 1999 Plan; (iii) provide for the granting of incentive stock options
to employees; (iv) continue rewarding and giving incentives to employees and key
persons affiliated with the Company by providing such persons with an interest
in the Company which corresponds to that of the Company's shareholders; and (v)
make other changes to the 1999 Plan as reflected in the attached copy of the
1999 Plan.
FEDERAL INCOME TAX CONSEQUENCES
INCENTIVE STOCK OPTIONS. An optionee who is granted an incentive stock option
does not recognize taxable income at the time the option is granted or upon its
exercise, although the exercise is an adjustment item for alternative minimum
tax purposes and may subject the optionee to the alternative minimum tax. Upon
a disposition of the shares more than two years after grant of the option and
one year after exercise of the option, any gain or loss is treated as long-term
capital gain or loss. Net capital gains on shares held more than 12 months may
be taxed at a maximum federal rate of 20%. Capital losses are allowed in full
against capital gains and up to $3,000 against other income. If these holding
periods are not satisfied, the optionee recognizes ordinary income at the time
of disposition equal to the difference between the exercise price and the lower
of (i) the fair market value of the shares at the date of the option exercise or
(ii) the sale price of the shares. Any gain or loss recognized on such a
premature disposition of the shares in excess of the amount treated as ordinary
income is treated as long-term or short-term capital gain or loss, depending on
the holding period. A different rule for measuring ordinary income upon such a
premature disposition may apply if the optionee is also an officer, Director, or
10% stockholder of the Company. Unless limited by Section 162(m) of the Code,
the Company is entitled to a deduction in the same amount as the ordinary income
recognized by the optionee.
NON-STATUTORY STOCK OPTIONS. An optionee does not recognize any taxable income
at the time he or she is granted a nonstatutory stock option. Upon exercise,
the optionee recognizes taxable income generally measured by the excess of the
then fair market value of the shares over the exercise price. Any taxable
income recognized in connection with an option exercise by an employee of the
Company is subject to tax withholding by the Company. Unless limited by Section
162(m) of the Code, the Company is entitled to a deduction in the same amount as
the ordinary income recognized by the optionee. Upon a disposition of such
shares by the optionee, any difference between the sale price and the optionee's
exercise price, to the extent not recognized as taxable income as provided
above, is treated as long-term or short-term capital gain or loss, depending on
the holding period. Net capital gains on shares held more than 12 months may be
taxed at a maximum federal rate of 20%. Capital losses are allowed in full
against capital gains and up to $3,000 against other income.
-6-
<PAGE>
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION UPON
OPTIONEES AND THE COMPANY WITH RESPECT TO THE GRANT AND EXERCISE OF OPTIONS
UNDER THE 1999 PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS
THE TAX CONSEQUENCES OF THE EMPLOYEE'S OR CONSULTANT'S DEATH OR THE PROVISIONS
OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH
THE EMPLOYEE OR CONSULTANT MAY RESIDE.
The proposed amended & restated 1999 Plan will be adopted upon receiving the
affirmative vote of holders of a majority of the shares present or represented
by proxy at the Annual Meeting. Proxies will be voted in accordance with the
specifications marked thereon, and if no specification is made, will be voted
"FOR" adoption of the proposed amendment and restatement of the 1999 Plan. The
Board has determined that the amended and restated 1999 Plan is in the best
interest of the Company and its shareholders.
The Board of Directors recommends a vote FOR the adoption of the Phoenix
Resources Technologies, Inc. 1999 Stock Option Plan.
PRINCIPAL SHAREHOLDERS
The Common Stock is the only voting security of the Company. See "Stock
Ownership of Certain Beneficial Owners" for information regarding persons who,
to the knowledge of the Company, beneficially own five percent or more of such
stock as of May 23, 2000.
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the amount and percent of shares of Common Stock
that, as of May 23, 2000, are deemed under the rules of the Securities and
Exchange Commission (the "Commission") to be beneficially owned by any person or
"group"(as that term is used in the Securities Exchange Act of 1934, as amended)
known to the Company as of that date to be a beneficial owner of more than 5% of
the outstanding shares of Common Stock of the Company, by each Executive Officer
of the Company, by each member of the Board of Directors of the Company, by each
nominee to become a member of the Board of Directors, and by all Directors and
Executive Officers of the Company as a group.
<TABLE>
<CAPTION>
Common stock of
THE COMPANY PERCENT
NAME AND ADDRESS owned beneficially of class
---------------- ------------------ ---------
<S> <C> <C>
Benjamin Traub 6,011,250 (*) 62.0%
240 - 11948 207th St.
Maple Ridge, B.C. V2X 1X7
(*) Includes 5,828,350 shares owned by
Wealthy Investor Network Inc. of which Ben
Traub is the beneficial owner.
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK PERCENT
OF THE COMPANY OF
NAME OWNED BENEFICIALLY (1) CLASS
---- ---------------------- -------
<S> <C> <C>
Benjamin Traub 6,011,250* 62.0%
Robert Seitz 25,000 1.00%
Ellen Luthy Nil Nil
Richard Monson 8,500 1.00%
Warren Gacsi 1,580 1.00%
Ronald J. Wilkins (2) 762,000 7.9 %
Judee Fayle (3) 25,000 1.00%
All Directors and Executive Officers 6,833,330 70.47%
as a Group (6 persons)
</TABLE>
(1) To the best of the Company's knowledge, based on information reported by
such Directors and officers or contained in the Company's stockholder
records, unless otherwise indicated by any additional information included
in the footnotes to the table, each of the named persons is presumed to
have sole voting and investment power with respect to all shares shown.
(2) Mr. Wilkins' 762,000 shares have been issued by Wealthy Investor Network
Inc. and placed in escrow to be released at the rate of 31,750 per month
over a period of 24 months in consideration of a note payable in the amount
of $6,477,000. In the event that Mr. Wilkins' employment terminates, any
shares remaining in escrow will either be returned to WIN and the
associated note payable will be cancelled, or 25% of the shares remaining
in escrow will be released to him, according to the contractual obligations
under the stock acquisition agreement.
(3) Ms. Fayle was a Director and the Treasurer/Secretary of the Company until
her resignation on June 29, 2000.
EXECUTIVE OFFICERS
The persons listed below are currently the executive officers of the Company.
<TABLE>
<CAPTION>
NAME OFFICE(S) AGE
---- --------- ---
<S> <C> <C>
Benjamin Traub Chairman of the Board 36
Ronald J. Wilkins President and Chief Executive Officer 44
Ellen Luthy Secretary/Treasurer 55
</TABLE>
Mr. Traub was appointed President and Chief Executive Officer of the Company in
October 1999. (See "Election of Directors" for further information concerning
Mr. Traub). Mr. Traub resigned as President and Chief Executive Officer on
June 13, 2000 and was appointed Chairman of Board.
-8-
<PAGE>
Mr. Wilkins has 22 years of successful planning, business development, business
process re-engineering (executive and operational), sales, marketing and product
management experience in both New Venture and Fortune-50 companies in the
Computing and Telecommunications industry. Before joining the Company, Mr.
Wilkins served from 1998 until 2000 as Managing Director, Corporate Sr. Vice
President of Porta Systems, a global provider of ADSL technologies. Prior to
this he was President/CEO of Sycom Technologies from 1997 to 1998, Vice
President of Alliances at Conxus Communications from 1995 to 1997, and in senior
marketing management positions with Digital Equipment (NYSE:CPQ) and IBM
(NYSE:IBM).
In addition to twenty-two years of leadership in the high-tech industry, Mr.
Wilkins attended Executive programs at Harvard Business School, Wharton School
of Business and the MIT Sloan School of Management. He graduated Bachelor of
Science cum laude with majors in Mathematics and Philosophy, from MWC of
University of Virginia.
Ms. Luthy has served as Secretary/Treasurer of the Company since May 2000.
Mr. Seitz served as Vice President of the Company from October, 1999 until he
resigned his position on June 13, 2000.
See "Election of Directors" for further information concerning Mr. Seitz and Ms.
Luthy.
The executive officers serve at the pleasure of the Board of Directors.
DIRECTOR COMPENSATION
There was no Director compensation paid during fiscal 1999. Currently Directors
of the Company do not receive any compensation for services performed in their
capacity as Directors other than stock options. During the 2000 fiscal year to
date, Directors have received grants of options to purchase the Company's Common
Stock as described below.
EXECUTIVE COMPENSATION
The following table provides summary information concerning compensation paid by
the Company to (or accrued on behalf of) the Company's Chief Executive Officer
who served as executive officer at the end of fiscal year 1999. The Company did
not have significant operations during fiscal year 1999. On October 29, 1999 the
Company entered into a Stock Acquisition Agreement pursuant which the previous
Directors and officers resigned on October 30, 2000.
-9-
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
No compensation was paid to Mr. William C. Nichols, the President and Chief
Executive Officer of the Company during the fiscal year ended on October 31,
1999. Compensation to Mr. Benjamin Traub, the Company's President and Chief
Executive Officer from November 3, 1999 to June 13, 2000 was as follows: Mr.
Traub received and exercised 82,000 stock options as disclosed in a footnote to
the following Compensation Table.
Mr. Traub's wholly owned management Company, Cyclone Financing Group Inc.
(Cyclone) has entered into a management services contract with the Company under
which the Company pays Cyclone $35,000 per month for management and
administrative services.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
NAME AND ANNUAL STOCK ALL OTHER
OFFICE HELD SALARY BONUS COMPENSATION
----------- ------ ----- ------------
<S> <C> <C> <C>
BENJAMIN TRAUB NIL NIL $866,250 /(1)/
PRESIDENT
JUDEE FAYLE NIL NIL $ 83,750 /(2)/
SECRETARY/TREASURER
ROBERT SEITZ NIL NIL $ 83,750 /(3)/
VICE PRESIDENT
</TABLE>
(1) Mr. Traub was granted 100,000 stock options @ $3.00 exercise price on
November 29, 1999 and 100,000 options @ $3.00 exercise price on December
17, 1999 and had exercised 82,000 options @ $3.00 as at February 14, 2000.
The Company and Mr. Traub agreed to cancel the remaining 118,000 options on
April 28, 2000 and was granted and exercised 160,000 options @ $12.25 on
April 28, 2000.
(2) Ms. Fayle resigned as Secretary/Treasurer on May 5, 2000 and as a Director
on June 29, 2000. Ms. Fayle was granted 100,000 stock options on November
29, 1999 @ $3.00 exercise price and had exercised 10,000 options @ $3.00 as
at January 28, 2000. On April 28, 2000 the Company and Ms. Fayle cancelled
the remaining 90,000 options.
(3) Mr. Seitz resigned as Vice President on June 13, 2000. Mr. Seitz was
granted 100,000 stock options on November 29, 1999 @ $3.00 exercise price
and had exercised 10,000 options @ $3.00 as at January 28, 2000. On April
28, 2000 the Company and Mr. Seitz cancelled the remaining 90,000 options.
OPTION GRANTS IN LAST FISCAL YEAR
No Executive Officer received Stock Options for the Fiscal year ended October
31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR - END OPTION VALUES
No Executive Officer received Stock Options for the Fiscal year ended October
31, 1999.
-10-
<PAGE>
EMPLOYMENT AND TERMINATION/CHANGE IN CONTROL ARRANGEMENTS
There is currently no change of control agreements in place with any Directors
or employees. The Company entered into an employment agreement with Ronald J.
Wilkins, our President and Chief Executive Officer, on June 1, 2000, which is
automatically renewable for additional one year periods unless terminated by
either party by providing 90 days notice prior to the anniversary date. The
agreement provides for an initial base salary of $380,000 (reduced to $17,000
per month until the Company receives at least $2,000,000 of proceeds from an
offering) for the first twelve months of the agreement and $380,000 for the
second twelve months of the agreement. The employment agreement may be
terminated by the Company for cause or other than for cause, death or disability
and Mr. Wilkins may terminate the agreement for good reason as such terms are
defined in the employment agreement. The Company has granted Mr. Wilkins
incentive stock options to purchase 200,000 shares of the Company's common stock
at an exercise price of $10.125 per share. In addition, Mr. Wilkins entered into
an agreement with Wealthy Investors Network, Inc., the majority shareholder of
the Company and an affiliate of Benjamin Traub, to purchase 762,000 shares of
common stock at a price of $8.50 per share for a total price of $6,477,000 plus
interest to be paid to WIN on or before June 21, 2003. In addition, if Mr.
Wilkins' employment agreement is terminated, a portion of these shares will be
returned to WIN and the remaining balance due to WIN will be forgiven. WIN
intends to forgive certain principal payments due from Mr. Wilkins upon the
happening of certain events. The Company has also agreed to issue to Mr. Wilkins
an annual bonus in an amount equal to the interest due to WIN by Mr. Wilkins
pursuant to the stock acquisition agreement.
INDUSTRY COMPARISON DATA
Data produced by Research Data Group, Inc.
[LOGO GOES HERE]
-11-
<PAGE>
The information presented in the graph above was obtained by the Company from
sources it considered to be reliable but has not been independently verified by
the Company. This performance graph assumes that $100 was invested on October
31, 1999 in the Company's Common Stock at a price of $2.25 per share and at the
closing sales price for each index on that date. No cash dividends have been
declared on the Company's Common Stock. Shareholder returns should not be
considered indicative of future shareholder returns.
PHOENIX RESOURCES TECHNOLOGIES, INC PEER GROUP TOTAL RETURN WORKSHEET
<TABLE>
<CAPTION>
Cumulative Total Return
-----------------------
10/31/1999 4/30/2000
---------- ---------
<S> <C> <C>
PHOENIX RESOURCES TECHNOLOGIES, INC. 100.00 544.44
RUSSELL 2000 100.00 108.20
CHASE H & Q INTERNET 100.00 137.81
</TABLE>
This stock performance graph and table shall not be deemed to be incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
CERTAIN TRANSACTIONS AND RELATED TRANSACTIONS
The Company has executed a management agreement with Cyclone Financing Group,
Inc. of 2nd Floor, 827 West Pender Street, Vancouver, British Columbia, Canada
V6C 3G8, an entity owned by Benjamin Traub, in the amount of $35,000 (US
Dollars) per month, effective November 1, 1999. This amount represents a
management fee related to the acquisition of projects, administration (i.e.
bookkeeping, photocopying, faxing, office space, telephone charges, supplies,
news dissemination) and other related operational costs. Cyclone has billed the
Company a total of $280,000 for the period from November 1, 1999 through June
30, 2000 and the Company has an outstanding balance due Cyclone of approximately
$10,000 as of June 30, 2000.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Scott Hatfield CPA to audit the financial
statements of the Company for the fiscal year ending October 31, 2000.
-12-
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Under the securities laws of the United States, the Company's Directors, its
executive officers, and any persons holding more than 10% of the Company's
Common Stock are required to report their ownership of the Company's Common
Stock and any changes in that ownership with the SEC. The Company believes, to
the best of its knowledge, that the former Directors, Officers and 10%
Shareholders complied with these filing requirements during the Fiscal Year
ended October 31, 1999.
Benjamin Traub, Robert Seitz and Judee Fayle were each required to file a Form 3
(Initial Statement of Beneficial Ownership of Securities) to report their
shareholdings on their appointment to the Board and as Officers of the Company
during the 2000 fiscal year. They failed to do so by the required date. They
have since filed these reports.
Benjamin Traub was required to file Forms 3 & 4. Mr. Traub failed to do so by
the required dates. Mr. Traub has since filed the reports during the 2000 fiscal
year.
Robert Seitz and Judee Fayle were required to file two Forms 4 covering
transactions. Mr. Seitz and Ms. Fayle failed to file these forms by the required
dates. Mr. Seitz and Ms. Fayle have since filed the reports during the 2000
fiscal year.
In making this statement, the Company has relied on the written representations
of its incumbent Directors and Executive Officers and copies of the reports
received by it.
OTHER MATTERS AND SHAREHOLDER PROPOSALS
At the date of this Proxy Statement, management is not aware of any matters to
be presented for action at the Annual Meeting other than those described above.
However, if any other matters should come before the Annual Meeting, it is the
intention of the persons named in the accompanying Proxy to vote in accordance
with their judgment on such matters.
Shareholder proposals intended to be presented at the 2001 Annual Meeting which
are eligible for inclusion in the Company's Proxy Statement for that meeting
under Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as
amended, must be received by the Company not later than February 6, 2001 if they
are to be included in the Company's Proxy Statement relating to that meeting.
Such proposals should be addressed to the Secretary at the Company's principal
executive offices and should satisfy the requirements applicable to shareholder
proposals contained in the Company's bylaws.
By Order of the Board of Directors,
/s/ Ben Traub
BENJAMIN TRAUB, Chairman of the Board
Vancouver, British Columbia
June 30, 2000
-13-
<PAGE>
Annex A
PHOENIX RESOURCES TECHNOLOGIES, INC.
1999 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Phoenix Resources
Technologies, Inc. 1999 Stock Option Plan (the "Plan") are to attract and retain
the best available personnel for positions of substantial responsibility, to
provide additional incentive to Employees and Consultants of the Company and to
promote the success of the Company's business. Options granted under the Plan
may be incentive stock options (as defined under Section 422 of the Code) or
non-statutory stock options, as determined by the Administrator at the time of
grant of an option and subject to the applicable provisions of Section 422 of
the Code, as amended, and the regulations promulgated thereunder. This Plan is
an amendment and restatement of the Phoenix Resources Technologies, Inc. 1999
Nonqualifying Stock Option Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees appointed
pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a committee appointed by the Board.
(e) "Common Stock" means the Common Stock of the Company, $0.001 par
value per share.
(f) "Company" means Phoenix Resources Technologies, Inc., a Nevada
corporation.
(g) "Consultant" means (i) any person, including an advisor, who is
engaged by the Company to render consulting or advisory services and is
compensated for such services; and (ii) any director of the Company who is
compensated for such services.
(h) "Continuous Status as an Employee or Consultant" means that the
employment or consulting relationship with the Company, any Parent or Subsidiary
is not interrupted or terminated. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, any Parent, any Subsidiary, or any successor.
A leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave. For purposes of Incentive Stock Options, no
such leave may exceed ninety (90) days, unless reemployment upon expiration of
such leave is guaranteed by statute or contract, including Company policies. If
reemployment upon expiration
<PAGE>
of a leave of absence approved by the Company is not so guaranteed, on the
ninety-first (91/st/) day of such leave any Incentive Stock Option held by the
Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option.
(i) "Covered Employee" means an Optionee who is or is expected to be a
"covered employee" within the meaning of Code Section 162(m) and the related
treasury regulations for the year in which the Option is taxable to the Optionee
and for whom the Administrator intends that such Option qualify for the
performance-based compensation exemption under Code Section 162(m).
(j) "Disability" means an inability to perform the duties assigned to
such Employee or Consultant, as determined in the sole discretion of the
Administrator, for a period of one hundred twenty (120) days.
(k) "Employee" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of the Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the
Nasdaq National Market, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system for the last market trading day prior to
the time of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the Nasdaq System (but not
on the Nasdaq National Market) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean between the high bid and low asked prices for the
Common Stock on the last market trading day prior to the day of
determination;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
-2-
<PAGE>
(p) "Option" means a stock option granted pursuant to the Plan.
(q) "Optioned Stock" means the Common Stock subject to an Option.
(r) "Optionee" means an Employee or Consultant who receives an Option.
(s) "Parent" means a "parent corporation" with respect to the Company
whether now or hereafter existing, as defined in Section 424(e) of the Code.
(t) "Share(s)" means a share or shares of Common Stock, as adjusted in
accordance with Section 11 below.
(u) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is One Million Five Hundred Thousand (1,500,000) Shares. The
maximum aggregate number of Shares subject to an Option granted in any one
Fiscal Year to a Covered Employee may not exceed Five Hundred Thousand (500,000)
Shares. Optioned Stock may be authorized, but unissued, or reacquired Shares.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares that were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan.
Should the Company reacquire Shares which were issued pursuant to the
exercise of an Option, such Shares shall not become available for future grant
under the Plan.
4. Administration of the Plan.
(a) In General. The Plan shall be administered by the Committee. The
Committee shall be composed solely of not fewer than two (2) "Non-Employee
Directors" within the meaning of Rule 16b-3 promulgated under the Exchange Act.
To the extent required to comply with the performance-based compensation
exemption under Code Section 162(m) and the related treasury regulations, each
member of the Committee shall also qualify as an "outside director," as defined
therein.
(b) Powers of the Administrator. Subject to the approval of any
relevant authorities, including the approval, if required, of any stock exchange
upon which the Common Stock is listed, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock in
accordance with Section 2(m) of the Plan;
-3-
<PAGE>
(ii) to select the Consultants and Employees to whom Options may
from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of a written option agreement ("Option
Agreement") for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions,
and any restriction or limitation regarding any Option or the Shares
relating thereto, including canceling Option awards due to the Optionee
engaging in conduct inimical to the best interests of the Company as
provided in Section 19, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(vii) to determine whether and under what circumstances an Option
may be settled in cash under Section 8(b) instead of Common Stock;
(viii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option has declined since the date the Option was granted;
and
(ix) to provide for the early exercise of Options for the
purchase of unvested Shares, subject to such terms and conditions as the
Administrator may determine.
(c) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options. Subject to the express
provisions of the Plan, the Administrator may interpret the Plan, prescribe,
amend and rescind rules and regulations relating to it, determine the terms and
provisions of awards to Optionees under the Plan (which need not be identical)
and make such other determinations as it deems necessary and advisable for the
administration of the Plan. The decision of the Administrator under the Plan
shall be conclusive and binding. No member of the Board or the Administrator
shall be liable for any action taken or determination made hereunder in good
faith. The Board and the Administrator shall be entitled to indemnification and
reimbursement to the maximum extent permitted by applicable law. Such
-4-
<PAGE>
indemnification shall be in addition to any rights of indemnification the
members may have as members of the Board or under the bylaws of the Company.
5. General Provisions
(a) Eligibility. Nonstatutory Stock Options may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees. An Employee or Consultant who has been granted an Option may, if
otherwise eligible, be granted additional Options.
(b) Option Designation. Options shall be evidenced by Option
Agreements in such form as the Administrator shall approve from time to time.
Each Option shall be designated in the Option Agreement as either an Incentive
Stock Option or a Nonstatutory Stock Option. However, notwithstanding such
designations, for those Incentive Stock Options exercisable for the first time
by any Optionee during any calendar year (under all plans of the Company or any
Parent or Subsidiary) with underlying shares having an aggregate Fair Market
Value exceeding $100,000, such excess shall be treated as Nonstatutory Stock
Options.
(c) Option Identification. For purposes of Section 5(b), Incentive
Stock Options shall be taken into account in the order in which they were
granted, and the Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted.
(d) No Employment Guarantee. The Plan shall not confer upon any
Optionee any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with his or her
right or the Company's right to terminate his or her employment or consulting
relationship at any time, with or without cause.
6. Term of Plan. The Plan, as amended and restated, was adopted by the
Board effective as of November 29, 1999 and shall continue in effect for a term
of ten (10) years from November 29, 1999 unless sooner terminated pursuant
Section 13.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. However, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted,
owns, or is deemed to own within the meaning of Section 424(d) of the Code,
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.
-5-
<PAGE>
8. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as is determined by
the Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns, or is deemed to own within the
meaning of Section 424(d) of the Code, stock representing more
than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than one hundred ten percent
(110%) of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee or Covered Employee, other than
an Employee described in the preceding paragraph, the per Share
exercise price shall be no less than one hundred percent (100%)
of the Fair Market Value per Share on the date of grant.
(ii In the case of a Nonstatutory Stock Option, the per share
exercise price shall be determined by the Administrator, provided that the
per share exercise price of any Nonstatutory Stock Option granted to any
Covered Employee shall be no less than one hundred percent (100%) of the
Fair Market Value per share on the date of grant.
(b) Consideration. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock Option,
shall be determined at the time of grant) and may consist of one or more of the
following, provided such form of payment is acceptable to the Administrator:
(i) cash, (ii) check, (iii) promissory note of Optionee, (iv) other Shares that
(x) in the case of Shares acquired upon exercise of an Option have been owned by
the Optionee for more than six (6) months on the date of surrender, and (y) have
a Fair Market Value on the date of surrender equal to or greater than the
aggregate exercise price of the Shares as to which said Option is exercised, (v)
authorization from the Optionee duly accepted by the Company to retain from the
total number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised, (vi) any
combination of the foregoing methods of payment, or (vii) such other
consideration and method of payment for the issuance of Shares to the extent
permitted under applicable laws.
-6-
<PAGE>
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions,
including performance criteria with respect to the Company and/or the Optionee,
as determined by the Administrator, in its sole and absolute discretion.
An Option shall be deemed to be properly exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option Agreement by the person entitled to exercise the Option and full payment
for the Shares with respect to which the Option is exercised has been received
by the Company pursuant to Section 8(b). However, (i) an Option may not be
exercised for a fraction of a Share, and (ii) an Option may not be exercised for
less than one hundred (100) Shares, unless the number purchased is the total
number available at the time for purchase.
Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the grant and/or exercise of the Option. The Company shall
issue (or cause to be issued) such stock certificate promptly upon the proper
exercise of the Option. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 11. Exercise of an Option in any manner shall
result in a decrease in the number of Shares which thereafter may be available,
both for purposes of further grants under the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
As a condition to the exercise of an Option, the Company and/or the
Administrator may require the person exercising such Option to represent and
warrant at the time of any such exercise that such exercise does not violate any
law, regulation or rule if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant provisions of
law.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
(b) Termination of Employment or Consulting Relationship for a Reason
Other than Death, Disability or Retirement. Upon termination of an Optionee's
Continuous Status as an Employee or Consultant, other than upon the Optionee's
death, Disability or retirement, the Optionee may exercise his or her Option,
but only within such period of time as is specified in the Option Agreement (but
in no event later than the expiration of the term of such Option as set forth in
the Option Agreement and subject to Section 19), and only to the extent
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<PAGE>
that the Optionee was vested and otherwise entitled to exercise the Option at
the date of termination as set forth in the Option Agreement. In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. In the case of an
Incentive Stock Option, such period of time for exercise shall not exceed three
(3) months from the date of termination. Notwithstanding the above, in the event
of an Optionee's change in status from Consultant to Employee or Employee to
Consultant, an Option held by the Optionee shall not automatically terminate
solely as a result of such change in status. However, an Incentive Stock Option
shall cease to be treated as an Incentive Stock Option and shall be treated for
tax purposes as a Nonstatutory Stock Option on the day that is three (3) months
and one (1) day following the change of status from Employee to Consultant. To
the extent the Optionee is not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time provided in the Option Agreement, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee. In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of his or
her Disability, Optionee may, but only within twelve (12) months from the date
of such termination (but in no event later than the expiration date of the term
of such Option as set forth in the Option Agreement), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination as set
forth in the Option Agreement; provided, however, that if such Disability is not
a "disability" as such term is defined in Section 22(e)(3) of the Code, in the
case of an Incentive Stock Option such Incentive Stock Option shall
automatically convert to a Nonstatutory Stock Option on the day three (3) months
and one (1) day following such termination. To the extent that Optionee is not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option to the extent so entitled within the time provided in
the Option Agreement, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Option Agreement), by the Optionee's estate or by a person
who has acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was vested and entitled to exercise the
Option at the date of death as set forth in the Option Agreement. To the extent
the Optionee was not entitled to exercise the Option at the time of death, or if
after death, the Optionee's estate or a person who has acquired the right to
exercise the Option by bequest or inheritance does not exercise the Option to
the extent so entitled within the time provided in the Option Agreement, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.
(e) Retirement of Optionee. In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of his or
her retirement on or after age sixty-five (65), Optionee may exercise his or her
Option, but only for the lesser of five (5)
-8-
<PAGE>
years from the date of retirement or such period of time as is specified in the
Option Agreement and only to the extent otherwise entitled to exercise it at the
date of retirement as set forth in the Option Agreement; provided, however, in
the case of an Incentive Stock Option, such period of time for exercise shall
not exceed the lesser of three (3) months from the date of retirement or such
period of time as is specified in the Option Agreement. To the extent that
Optionee is not entitled to exercise the Option at the date of termination, or
if Optionee does not exercise such Option to the extent so entitled within the
time provided in the Option Agreement, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(f) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish, in its sole and
absolute discretion, and communicate to the Optionee at the time that such offer
is made.
(g) Rule 16b-3. Options granted to persons subject to Section 16(b)
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
10. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. Adjustments Upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding
Option, and the number of Shares which have been authorized for issuance under
the Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as
the price per share of Shares covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares of that class resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Shares of that class, or any
other increase or decrease in the number of issued Shares of that class effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of Shares subject to an Option.
-9-
<PAGE>
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee at least fifteen (15) days prior to such proposed action. To the
extent it has not been previously exercised, the Option will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
with or into another entity and the Company is not the surviving entity, or the
sale of all or substantially all of the assets of the Company, the Option shall
be assumed or an equivalent option shall be substituted by such successor entity
or a parent or subsidiary of such successor entity. In the event that such
successor entity does not agree to assume the Option or to substitute an
equivalent option, the Administrator shall, in lieu of such assumption or
substitution, provide for the Optionee to have the immediate right to exercise
the Option as to all of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable. If the Administrator makes an Option
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee that the Option will
be fully exercisable for a period of fifteen (15) days from the date of such
notice, and the Option shall terminate upon the expiration of such period. For
the purposes of this paragraph, the Option shall be considered assumed if,
following the merger, the Option confers the right to purchase, for each Share
of Optioned Stock subject to the Option immediately prior to the merger, the
consideration (whether stock, cash, or other securities or property) received in
the merger or asset sale by holders of shares of the same class on a per-share
basis for their shares held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares of that class); provided,
however, that if such consideration received in the merger or asset sale was not
solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of an Option, for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or asset sale.
12. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option is so granted within a reasonable time after the date of such
grant.
13. Amendment and Termination of the Plan. The Board may at any time, in
its sole and absolute discretion, amend, alter, suspend or discontinue the Plan,
but no amendment, alteration, suspension or discontinuation shall be made which
would impair the rights of any Optionee with respect to any grant theretofore
made, without his or her consent, and no amendment, as it applies to a Covered
Employee, shall be made that would cause an Option granted to such Covered
Employee to fail to satisfy the performance-based compensation exemption under
Code Section 162(m) and the related treasury regulations (to the extent such
Option is intended to satisfy this exemption when granted). In addition, to the
extent necessary
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<PAGE>
and desirable to comply with Rule 16b-3 under the Exchange Act or with Section
422 of the Code (or any other applicable law or regulation, including the
requirements of the NASD or an established stock exchange), the Company shall
obtain shareholder approval of any Plan amendment in such a manner and to such a
degree as required.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed.
15. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
16. Agreements. Options shall be evidenced by written agreements in such
form as the Administrator shall approve from time to time.
17. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any stock exchange upon which the Common Stock is listed.
18. Withholding of Taxes. To the extent that the exercise of any Option
or the disposition of any Shares shall result in income to the Optionee or any
other person in whom ownership of the Option or Shares has vested in accordance
with the terms of the Plan, the Company to the extent required by law will
withhold from the proceeds of such disposition an appropriate amount for
federal, state and local taxes. The Company's obligation to honor an exercise
of the Options or disposition of Shares acquired hereunder shall be subject to
the holder of the Option making appropriate arrangements with the Company for
the satisfaction of all federal, state or local income tax withholding
requirements.
19. Inimical Conduct or Voluntary Termination. Notwithstanding anything
to the contrary in the Plan, if the Administrator finds that the Optionee has
been engaged in fraud, embezzlement, theft, commission of a felony or proven
dishonesty in the course of his/her association with the Company or any
Subsidiary which damaged the Company or any Subsidiary, or for disclosing trade
secrets of the Company or any Subsidiary, the Optionee shall forfeit all
unexercised Options and all exercised Options under which the Company has not
yet delivered the certificates. Unless the Optionee has entered into a written
employment agreement with the Company which provides for a contrary treatment,
if the Optionee voluntarily terminates employment with the Company, the Optionee
shall forfeit all unexercised Options.
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<PAGE>
20. Applicable Law. All questions pertaining to the validity,
construction and administration of the Plan and the Options granted hereunder
shall be determined in accordance with the laws of the State of Nevada and the
general corporation law of the State of Nevada to the extent not inconsistent
with Code Section 422 and regulations thereunder.
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<PAGE>
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
PHOENIX RESOURCES TECHNOLOGIES, INC.
ANNUAL MEETING OF SHAREHOLDERS
July 21, 2000
10.30 A.M. LOCAL TIME
The undersigned hereby appoints Benjamin Traub and Robert Seitz and each of
them, with full power of substitution, to act as proxy for the undersigned and
to vote all shares of Common Stock of the Company that the undersigned is
entitled to vote at the Annual Meeting of Shareholders, to be held on July 21,
2000, at 10:30 a.m., local time at 2nd Floor, 827 Pender Street, Vancouver, BC,
Canada, and any and all adjournments thereof, as indicated on the reverse side
of this proxy.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS LISTED. IF ANY
OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, INCLUDING WHETHER OR NOT TO
ADJOURN THE MEETING, THIS PROXY WILL BE VOTED BY THE BOARD OF DIRECTORS IN THEIR
BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
PLEASE COMPLETE, DATE, AND SIGN AND FAX OR MAIL THIS PROXY PROMPTLY TO:
MS. ELLEN LUTHY, PHOENIX RESOURCES TECHNOLOGIES, INC., 827 WEST PENDER STREET,
SECOND FLOOR, VANCOUVER, BC V6C 3G8 CANADA. FAX: (604) 646-5521.
<PAGE>
PHOENIX RESOURCES TECHNOLOGIES, INC.
2000 ANNUAL MEETING OF SHAREHOLDERS
PHOENIX RESOURCES TECHNOLOGIES INC.
JULY 21, 2000
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES IN
PROPOSAL 1 AND "FOR" PROPOSAL 2.
[X] Please mark your vote as this example.
PROPOSAL 1: ELECTION OF DIRECTORS.
[ ] FOR all nominees listed at the right: NOMINEES:
Benjamin Traub
Robert Seitz
Ellen Luthy
Richard Monson
Warren Gacsi
[ ] WITHHOLD AUTHORITY for the nominees listed at the right:
SHAREHOLDER MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY STRIKING OUT THE
NAME OF THAT NOMINEE
To hold office until the 2001 Annual Meeting or until their successors are
appointed.
PROPOSAL 2: APPROVAL OF THE COMPANY'S AMENDED AND RESTATED STOCK OPTION PLAN
[ ] FOR [ ] AGAINST
SIGNATURE: NAME:
------------------------------ -----------------------
(PLEASE PRINT)
SIGNATURE: NAME:
------------------------------ -----------------------
(IF HELD JOINTLY) (PLEASE PRINT)
NUMBER OF SHARES HELD: DATE: JULY, 2000
------------------- ------------------------
PLEASE MARK, DATE AND SIGN AS YOUR NAME APPEARS ABOVE AND MAIL OR FAX (604)
646-5521 SO THAT THE COMPANY RECEIVES YOUR PROXY BY JULY 18, 2000.
