SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. 1)
Filed by Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Revised Preliminary Proxy Statement
[X] Revised Definitive Proxy Statement
WORLDWATER CORP.
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(Name of Registrant as Specified In Its Charter)
BOARD OF DIRECTORS OF WORLDWATER CORP.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:(1)
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(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:
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(3) Filing Party:
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(4) Date Filed:
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(5) Set forth the amount on which the filing fee is calculated and
state how it was determined.
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WORLDWATER CORP.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 20, 2000
As a stockholder of WorldWater Corp. (the "Company"), you are hereby given
notice of and invited to attend in person or by proxy the Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held at the Hopewell
Valley Golf Club, Hopewell, New Jersey, on Tuesday, June 20, 2000, at 1:00 p.m.,
local time, for the following purposes:
1. To amend the Company's Restated Articles of Incorporation (the "Current
Articles") to provide for staggered terms for directors.
2. (a) If Proposal 1 is approved, to elect a staggered Board of Directors
consisting of three classes to serve initially for one, two and three-year
terms, converting into three year terms upon expiration of the original
term, and until their successors are elected; or
(b) if Proposal 1 is not approved, to elect six (6) directors to serve
one-year terms and until their successors are elected;
3. To consider and act upon a proposal to adopt a Plan of Merger between the
Company, a Nevada corporation, and a to-be-formed company named WorldWater
Corp., a Delaware corporation (the "Delaware Company"), pursuant to which
(i) the Company's state of incorporation will be changed from Nevada to
Delaware and (ii) all of the outstanding shares of the Company will be
converted into an equal number of shares of the Delaware Company.
4. To approve the selection of DeAngelis & Higgins, LLC as the Company's
independent public accountants for the year 2000.
5. To transact such other business as may properly come before the Annual
Meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on May 15, 2000 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting and any adjournment thereof. Only stockholders of
record at the close of business on the record date are entitled to notice of and
to vote at the Annual Meeting. The transfer books of the Company will not be
closed.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, MANAGEMENT DESIRES TO HAVE THE
MAXIMUM REPRESENTATION AT THE ANNUAL MEETING AND RESPECTFULLY REQUESTS THAT YOU
DATE, EXECUTE AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED STAMPED
ENVELOPE FOR WHICH NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
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A proxy may be revoked by a stockholder any time prior to its use as
specified in the enclosed proxy statement.
By Order of the Board of Directors
QUENTIN T. KELLY,
Chairman and Chief
Executive Officer
Pennington, New Jersey
April 25, 2000
YOUR VOTE IS IMPORTANT.
PLEASE EXECUTE AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED HEREIN.
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WORLDWATER CORP.
Pennington Business Park
55 Route 31 South
Pennington, New Jersey 08534
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PROXY STATEMENT
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FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 20, 2000
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TO OUR STOCKHOLDERS:
This Proxy Statement is furnished to stockholders of WorldWater Corp. (the
"Company") for use at the Annual Meeting of Stockholders to be held at the
Hopewell Valley Golf Club, Hopewell, New Jersey, on Tuesday, June 20, 2000, at
1:00 p.m., local time, or at any adjournment or adjournments thereof (the
"Annual Meeting"). The enclosed proxy is being solicited by the Board of
Directors of the Company (the "Board") and is subject to revocation at any time
prior to the voting of the proxy. Unless a different choice is indicated, all
duly executed proxies received by the Company will be voted in accordance with
the instructions set forth on the back side of the proxy card. The record of
stockholders entitled to vote at the Annual Meeting was taken at the close of
business on May 15, 2000 (the "Record Date"). This Proxy Statement and the
enclosed proxy card are being sent or given to stockholders on or about May 18,
2000.
VOTING PROCEDURES AND REVOCABILITY OF PROXIES
The accompanying proxy card is designed to permit each stockholder of
record at the close of business on the Record Date to vote with respect to the
amendment of the Restated Articles of Incorporation to provide for staggered
terms for directors, the election of directors and on any other proposal
properly brought before the Annual Meeting. The proxy card provides space for a
stockholder to (a) vote for or against the amendment of the Restated Articles of
Incorporation to provide for staggered terms for directors, (b) in favor of or
to withhold voting for each nominee for the Board, (b) vote for or against each
proposal to be considered at the Annual Meeting, or (c) abstain from voting on
any proposal other than the election of directors. The election of the directors
will be decided by a plurality of the votes cast at the Annual Meeting by the
holders of the Common Stock. For all matters, the affirmative vote of a majority
of the votes present or represented by proxy and entitled to be cast at the
Annual Meeting by holders of the Common Stock is required to take stockholder
action.
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the votes entitled to be cast by all holders of the Common
Stock will constitute a quorum for the transaction of business at the Annual
Meeting. If a quorum is not present, in person or by proxy, the Annual Meeting
may be adjourned from time to time until a quorum is obtained. In the case of
any meeting called for the election of directors, those
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who attend the second such adjourned meetings, although less than a majority,
shall constitute a quorum for the purpose of electing directors. Shares as to
which authority to vote has been withheld with respect to any matter brought to
a vote before the stockholders will not be counted as a vote in favor of such
matter.
Abstentions and broker nonvotes will be counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
With respect to all matters other than the election of directors, an abstention
will have the same effect as a vote against any specified proposal. Stockholders
are urged to sign the accompanying proxy card and return it promptly.
When a signed proxy card is returned with choices specified with respect
to voting matters, the shares represented will be voted by the proxies
designated on the proxy card in accordance with the stockholder's instructions.
The proxies for the stockholders are Quentin T. Kelly and Terri Lyn Harris. A
stockholder wishing to name another person as his or her proxy may do so by
crossing out the names of the designated proxies and inserting the name of such
other person to act as his or her proxy. In that case, it will be necessary for
the stockholder to sign the proxy card and deliver it to the person named as his
or her proxy and for the person so named to be present and vote at the Annual
Meeting. Proxy cards so marked should not be mailed to the Company.
If a signed proxy card is returned and the stockholder has made no
specifications with respect to voting matters, the shares will be voted (a) for
the amendment of the Restated Articles of Incorporation, (b) for the election of
the nominees for director and (c) at the discretion of the proxies, on any other
matter that may properly come before the Annual Meeting or any adjournment of
the Annual Meeting. Valid proxies will be voted at the Annual Meeting and at any
adjournment of the Annual Meeting in the manner specified.
Any stockholder giving a proxy has the unconditional right to revoke it at
any time before it is voted by any act inconsistent with the proxy, including
notifying the Secretary of the Company in writing, executing a subsequent proxy
or personally appearing at the Annual Meeting and casting a contrary vote.
However, no revocation will be effective unless notice of such revocation has
been received by the Company at or prior to the Annual Meeting.
The total issued and outstanding shares of common stock, $.001 par value
per share (the "Common Stock"), as of December 31, 1999 consisted of 27,125,854
shares.
MATTERS TO BE BROUGHT BEFORE THE MEETING
PROPOSAL ONE
AMENDMENT TO CURRENT ARTICLES TO PROVIDE FOR
STAGGERED TERM FOR DIRECTORS
The Board of Directors of the Company has adopted a resolution proposing
an amendment to the Current Articles that would provide for staggered terms of
the directors, effective immediately and affecting the Board of Directors
elected at the Annual Meeting. Under the proposed amendment, the Board of
Directors shall be divided into three classes if the number of directors is four
or more, with the classes to be as equal in number as may be possible. Any
director or directors in excess of the number divisible by three shall be first
assigned to Class 1, and any additional director shall be assigned to Class 2,
as the case may be. (For example, if there are five directors, the fourth
director shall be in Class 1 and the fifth director in Class 2.) If the proposed
amendment
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is approved by the stockholders, the Board of Directors shall be divided into
three classes with each Class 1 director elected to serve until the next ensuing
annual meeting of stockholders, each Class 2 director elected to serve until the
second ensuing annual meeting of stockholders, and each Class 3 director elected
to serve until the third ensuing annual meeting of stockholders. At each annual
meeting of stockholders following the Annual Meeting, the number of directors
equal to the number of directors in a class whose term expires at the time of
such meeting shall be elected to serve until the third ensuing annual meeting of
stockholders.
The proposed amendment also provides that notwithstanding the foregoing,
directors shall serve until their successors are elected and qualified or until
their earlier death, resignation or removal from office, or until there is a
decrease in the number of directors; provided, however, that no decrease in the
number of directors shall have the effect of shortening the term of any
incumbent director.
The proposed amendment has both advantages and disadvantages to
stockholders. The proposed amendment does not prevent a purchase of all or a
majority of the equity securities of the Company, whether pursuant to
open-market purchases, negotiated purchases from large stockholders or an
unsolicited bid for all or part of the securities of the Company. Rather, the
Board believes that the proposed amendment would discourage disruptive tactics
and encourage persons who may seek to acquire control of the Company to initiate
such an acquisition through negotiations with the Board. The Board believes that
it will therefore be in a better position to protect the interests of all the
stockholders. Furthermore, the stockholders will have a more meaningful
opportunity to evaluate any such action. Although the proposed amendment is
intended to encourage persons seeking to acquire control of the Company to
initiate such an acquisition through arm's length negotiations with the Board,
the overall effect of the proposed amendment may be to discourage a third party
from making a tender offer for a portion or all of the Company's Common Stock,
or otherwise attempting to obtain a substantial position in the equity
securities of the Company, by preventing such third party from immediately
removing and replacing the incumbent directors.
A staggered Board would make it more difficult to change control of the
Company by removing and replacing all or a majority of the Board. Since not all
directors would stand for election at a single stockholders? meeting, as is the
case now, stockholders desiring to change control would have to vote at multiple
meetings in order to do so, requiring at least two annual meetings to remove and
replace a majority of the directors of the Company, and three annual meetings to
remove and replace the entire Board.
To the extent any potential acquirors are deterred by the proposed
amendment, the proposed amendment may also serve to benefit incumbent management
by making it more difficult to remove management even when the only reason for
the proposed change of control of the stockholder action may be the
unsatisfactory performance of the present directors. In addition, since the
proposed amendment is in part designed to discourage accumulations of large
blocks of the Company's voting shares by purchasers whose objective is to have
such voting shares repurchased by the Company at a premium, its adoption could
tend to reduce the temporary fluctuations in the market price of such voting
shares that are caused by such accumulations. Accordingly, stockholders
conceivably could be deprived of certain opportunities to sell their shares at a
temporarily higher market price.
Takeovers or changes in the Board of Directors that are effected without
prior consultation and negotiation with the Company would not necessarily be
detrimental to the Company and its stockholders. However, the Board feels that
the benefits of seeking to protect the ability of the Company to negotiate
effectively, through directors who have previously been elected by the
stockholders as a whole and are familiar
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with the Company, outweigh any disadvantage of discouraging such unsolicited
proposals. The proposed amendment is not in response to any specific efforts of
which the Company is aware to accumulate shares of Common Stock or obtain
control of the Company. The Board is recommending the adoption of the proposed
amendment in order to further continuity and stability in the leadership and
policies of the Company and to discourage certain types of tactics that could
involve actual or threatened changes of control that are not in the best
interests of the stockholders. Because of the time associated with obtaining
stockholder approval, the Board of Directors believes it is inadvisable to defer
consideration of the proposed amendment until a takeover threat is pending. Once
a specific threat exists, the time required to adopt the proposed amendment may
render its adoption impractical prior to the completion of the takeover.
Further, the absence of a specific threat permits stockholders to consider the
merits of the proposed amendment outside the pressured atmosphere of a takeover
threat. For these reasons, the Company believes it is prudent to consider the
proposed amendment at this time.
THE BOARD URGES STOCKHOLDERS TO VOTE "FOR"
THIS PROPOSAL
Unless Marked to the Contrary, Proxies Will Be Voted For?Approval
PROPOSAL TWO
ELECTION OF DIRECTORS
The Restated By-Laws of the Company provide that the Board of Directors
shall be composed of four (4) to seven (7) Directors. Currently the number of
Directors of the Company is five (5). The Current Articles currently provide
that directors serve one-year terms until the next annual meeting of
stockholders and until their successors are elected and qualified.
(a) IF PROPOSAL 1 IS APPROVED. If Proposal 1 is approved by the
stockholders at the Annual Meeting, the Directors of the Company would be
divided into three classes. Following the Annual Meeting, one class of
directors would be elected each year, and the members of such class would
hold office for a three-year term and until their successors are duly
elected and qualified, or until their death, resignation or removal from
office. At the Annual Meeting, two Class 1 Directors would be elected,
each to serve a one-year term until the 2001 Annual Meeting and until
their successors are elected and qualified. At the 2001 Annual Meeting,
two Class 1 Directors would be elected for a three-year term. The nominees
for Class 1 Directors are Dr. Russell L. Sturzebecker and Dr. Martin G.
Beyer. At the Annual Meeting, two Class 2 Directors would be elected, each
to serve a two-year term until the 2002 Annual Meeting and until their
successors are elected and qualified. At the 2002 Annual Meeting, two
Class 2 Directors would be elected for a three-year term. The nominees for
Class 2 Directors are Rolf Hafeli and Dr. Davinder Sethi. At the Annual
Meeting, two Class 3 Directors would be elected, each to serve a
three-year term until the 2003 Annual Meeting and until their successors
are elected and qualified. At the 2003 Annual Meeting, two Class 3
Directors would be elected for a three-year term. The nominees for Class 3
Directors are Quentin T. Kelly and Joseph Cygler. All of the nominees for
the three classes, except Dr. Davinder Sethi, are currently members of the
Board of Directors of the Company.
(b) IF PROPOSAL 1 IS NOT APPROVED. If Proposal 1 is not approved by the
stockholders at the Annual Meeting, then six (6) Directors will be elected
at the Annual Meeting each to serve for a one-year term until the 2001
Annual Meeting and until their successors are elected and qualified. The
nominees
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are Quentin T. Kelly, Dr. Martin G. Beyer, Joseph Cygler, Dr. Russell L.
Sturzebecker, Rolf Hafeli and Dr. Davinder Sethi, all of whom, except Dr.
Davinder Sethi, are currently members of the Board of Directors of the
Company.
The persons named on the enclosed proxy (the proxy holders) will vote for
election of the Nominees either (a) for staggered terms if Proposal 1 is
approved by the stockholders at the Annual Meeting or (b) for one-year terms if
Proposal 1 is not approved, unless you have withheld authority for them to do so
on your proxy card.
In the unanticipated event that a Nominee is unable or declines for good
cause to serve as a Director at the time of the Annual Meeting, the proxies will
be voted for any nominee named by the current Board of Directors to fill the
vacancy. As of the date of this Proxy Statement, the Board of Directors is not
aware of any Nominee who is unable and/or will decline to serve as a Director.
There is no cumulative voting for election of Directors.
Stockholders are asked to vote for the election of Directors both if
Proposal 1 is approved by the stockholders at the Annual Meeting (indicated on
the attached Proxy as ?2(a)) and if Proposal 1 is not approved (indicated on the
attached Proxy as ?2(b)).
The Board of Directors unanimously recommends a vote for the election of
its nominees as Directors, either (a) for staggered terms if Proposal 1 is
approved by the stockholders at the Annual Meeting or (b) for one-year terms if
Proposal 1 is not approved.
Set forth below is certain information with respect to the persons
nominated by the Board of Directors. Each of the nominees has consented to be
named as a nominee in this Proxy Statement and to serve as a Director if
elected.
The six (6) Directors are required to be elected by a plurality of the
votes cast as to the subject Board seat. Votes may be cast in favor of or
withheld for any or all of the appropriate nominees. Unless otherwise instructed
by a record holder submitting a proxy, the persons named in a proxy will vote
the shares represented thereby for the election of all such appropriate
nominees. Abstentions and broker non-votes will not be counted toward a
nominee's achievement of a plurality and thus will have no effect on the outcome
of the election of Directors.
Other nominations for election to the Board may be made by the Board, or
by any stockholder or shareholder representing at least ten percent of the votes
which all stockholders of the corporation are entitled to cast.
Quentin T. Kelly founded the Company in 1984 and has been Chief Executive
Officer since then. Mr. Kelly was previously Director of Information Services
and Assistant to the President of Westinghouse Electric Corporation from 1965 to
1971 and subsequently became President of Kelly-Jordan Enterprises, Inc., a
leisure products company from 1971 to 1975, and then President of Pressurized
Products, Inc., manufacturers and international marketers of specialized water
systems and products, from 1976 to 1984. Mr. Kelly is an alumnus of Kenyon
College. He has many years' experience in international business relating to
water and
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power needs in the developing world. He has worked on water supply and solar
power projects with governments and several of the international assistance
agencies (USAID, UNDP and UNICEF), particularly in the Philippines, Lebanon,
Sudan, North Africa and Sub-Saharan Africa and India.
Dr. Martin G. Beyer was appointed a Director of the Company in 1995 and
serves as Consultant -International Marketing. He was Secretary-General of the
Global Consultation on Water and Sanitation, sponsored by the United Nations
Development Programme and the World Bank, held in New Delhi, India in 1990 and
attended by over 600 delegates from 115 countries. Previously, Dr. Beyer was
Senior Advisor for Water Supply and Sanitation for UNICEF, Chairman of the
United Nations Intersecretariat Group for Water Resources, Chairman of the
Advisory Panel to the UNDP/World Bank global project for testing and developing
of hand pumps, and Deputy Regional Director for UNICEF in the Americas. Dr.
Beyer has a Ph.D. degree in Economic Geology from the University of Stockholm
and speaks ten languages, including French, Spanish, German, Italian and
Portuguese. He resides in Princeton, New Jersey.
Joseph Cygler has been a Director of the Company since January 1984, and a
former Vice President of Marketing and Executive Vice-President. He has been
Chief Executive Officer of the CE&O Group, an organization assisting companies
in operations management, since 1986. Previously he was an executive at
Kepner-Tregoe, Inc., an international business consulting firm, from 1976 to
1986, an executive with Honeywell Information Systems from 1964 to 1976, and a
marketing representative with International Business Machines from 1961 to 1964.
Mr. Cygler has a BS in Engineering from the U.S. Military Academy at West Point.
Rolf Hafeli is the President of Hafeli Asset Management, which is based in
Hirschthal, Switzerland. He is a graduate in Economics of Zurich University with
an emphasis in Environmental Economics.
Dr. Russell L. Sturzebecker was appointed a Director of the Company in
1997 and serves as Consultant- International Health. He is a retired Director of
Health and Education of West Chester University (Pennsylvania). He is an author
and publisher of histories of World War II-Pacific Theater and of the Olympic
Games. He is a retired Colonel, US Air Force, who accompanied General Douglas
MacArthur's troops in the invasion of the Philippines and is a close associate
of former President Fidel V. Ramos of the Philippines.
Dr. Davinder Sethi is currently an independent advisor and investor in the
fields of information technologies and finance, with experience spanning
academia, research, business and investment banking. Previously, he served as
Director and Senior Advisor to Barclays de Zoete Wedd, advising major global
providers of information technologies to develop and execute corporate
development opportunities. Prior to Barclays de Zoete Wedd, Dr. Sethi spent
seven years at Bell Laboratories in operation research and communications
network planning and seven years in corporate finance at AT&T. He holds a Ph.D.
and M.S. in Operations Research, Economics and Statistics from the University of
California, Berkeley, and is a graduate of the Executive Management Program from
Penn State.
THE BOARD URGES STOCKHOLDERS TO VOTE "FOR"
EACH OF THE NOMINEES FOR DIRECTOR SET FORTH ABOVE
Unless Marked to the Contrary, Proxies Will be Voted For Approval
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PROPOSAL THREE
TO APPROVE THE MERGER AND REINCORPORATION
OF THE COMPANY
APPROVAL BY STOCKHOLDERS OF THE PROPOSED MERGER AND REINCORPORATION WILL
CONSTITUTE APPROVAL OF THE MERGER AGREEMENT, THE DELAWARE CERTIFICATE AND THE
DELAWARE BY LAWS.
The Reincorporation and Merger Proposal will be effected by merging the
Company into a to-be-formed Delaware company pursuant to the terms of a Plan of
Merger (the "Merger Agreement"), a copy of which is attached as Annex I. Upon
completion of the Merger, the Company will cease to exist, and the Delaware
Company will own all of the Company's assets, assume the liabilities and will
operate the Company's business under the name WorldWater Corp.
At the effective time of the Reincorporation and Merger, the Company will
be governed by the Delaware General Corporations Law ("Delaware GCL"), the
Delaware Certificate, and the new Bylaws (the "Delaware Bylaws"). With certain
exceptions, the Delaware GCL is substantially similar to the Nevada General
Corporations Law ("Nevada GCL"). Material differences in stockholder rights and
the powers of management under the Delaware GCL and the Nevada GCL are discussed
below under "Comparison of Corporation Law of Delaware and Nevada and
Application to WorldWater Corp." Except for the imposition of changes required
to conform to applicable Delaware law and, if approved by the Stockholders, the
Charter Amendments, the Delaware Certificate and Delaware Bylaws (collectively,
the "Delaware Charter Documents") will be substantially similar to the Nevada
Certificate and Nevada Bylaws (collectively, the "Nevada Charter Documents") of
the Company.
Principal Reasons for the Proposed Reincorporation.
The primary reason for the Board's recommendation of the reincorporation
is the well-developed case law interpreting the Delaware GCL, which the Board
believes will allow it to perform its duties more effectively. As the Company
plans for the future, the Board of Directors and management believe that it is
essential to be able to draw upon well established principles of corporate
governance in making legal and business decisions. Although the Nevada GCL is
relatively similar to the Delaware GCL, there is a lack of predictability under
Nevada law resulting from the limited body of case law interpreting the Nevada
GCL. By contrast, the prominence and predictability of Delaware corporate law
provide a reliable foundation on which the Company's governance decisions can be
based, and the Company believes that stockholders will benefit from the
responsiveness of Delaware corporate law to their needs and to those of the
Company.
Prominence, Predictability and Flexibility of Delaware Law.
For many years Delaware has followed a policy of encouraging incorporation
in that state and, in furtherance of that policy, has been a leader in adopting,
construing and implementing comprehensive, flexible corporate laws responsive to
the legal and business needs of corporations organized under its laws. Many
corporations have chosen Delaware initially as a state of incorporation or have
subsequently changed corporate domicile to Delaware in a manner similar to that
proposed by the Company. Because of Delaware's prominence as the state of
incorporation for many major corporations, both the legislature and courts in
Delaware have demonstrated an ability and a willingness to act quickly and
effectively to meet changing business needs. The
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Delaware courts have developed considerable expertise in dealing with corporate
issues and a substantial body of case law has developed construing Delaware law
and establishing public policies with respect to corporate legal affairs. The
Board, therefore, believes that the overall effect of the Merger and
Reincorporation will be to enhance the Board's ability to consider all
appropriate courses of action with respect to significant transactions,
including takeover attempts, for the benefit of all stockholders.
Increased Ability to Attract and Retain Qualified Directors.
Both Nevada and Delaware law permit a corporation to include a provision
in its certificate of incorporation which reduces or limits the monetary
liability of directors for breaches of fiduciary duty in certain circumstances.
The Company believes that, in general, Delaware case law regarding a
corporation's ability to limit director liability is more developed and provides
more guidance than Nevada law. The increasing frequency of claims and litigation
directed against directors and officers has greatly expanded the risks facing
directors and officers of corporations in exercising their respective duties.
The amount of time and money required to respond to such claims and to defend
such litigation can be substantial. It is the Company's desire to reduce these
risks to its directors and officers and to limit situations in which monetary
damages can be recovered against directors so that the Company may continue to
attract and retain qualified directors who otherwise might be unwilling to serve
because of the risks involved.
Well Established Principles of Corporate Governance.
There is substantial judicial precedent in the Delaware courts as to the
legal principles applicable to measures that may be taken by a corporation and
as to the conduct of the Board of Directors under the business judgment rule.
The Company believes that its stockholders will benefit from the well
established principles of corporate governance that Delaware law affords.
No Change in Board Members, Business, Management, Employee Benefit Plans or
Location of Principal Facilities of the Company.
In order to accomplish the Merger and Reincorporation, it is necessary to
first form a shell corporation in Delaware into which the Company will be
merged. The Delaware Charter documents will mirror the Nevada Charter Documents
with respect to such things as the name of the Company, the number of shares
authorized, and the number of directors on the Board. The Merger and
Reincorporation Proposal will effect only a change in the legal domicile of the
Company as well as certain other changes of a legal nature, certain of which are
described in this proxy statement. The Proposed Merger and Reincorporation will
NOT result in any change in the business, management, fiscal year, assets or
liabilities (except to the extent of legal and other costs of effecting the
reincorporation) or location of the principal facilities of the Company.
Prior to the Effective Date of the Merger, the Company will obtain any
requisite consents to the Merger from parties with whom it may have material
contractual arrangements (the "Material Agreements"). As a result, the Company's
rights and obligations under such Material Agreements will continue and be
assumed by the Delaware Company.
Comparison of Corporation Law of Delaware and Nevada and Application to
WorldWater Corp.
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The Company is incorporated under the laws of the State of Nevada, and the
Delaware Company will be incorporated under the laws of the State of Delaware.
The Company stockholders, whose rights as stockholders are currently governed by
Nevada law and the Nevada Charter Documents, will become, upon consummation of
the Merger and Reincorporation, stockholders of the Delaware Company whose
rights will be governed by Delaware law and the Delaware Charter Documents. The
following summary does not purport to be a complete statement of the rights of
the Company's stockholders under applicable Nevada law and the Nevada Charter
Documents as compared with the rights of the Delaware stockholders under
applicable Delaware law and the Delaware Charter Documents and is qualified in
its entirety by the Delaware GCL and the Nevada GCL to which stockholders are
referred. Generally, the provisions of the Delaware Charter Documents are
similar to those of the Nevada Charter Documents in many respects.
Authorized Capital Stock. The Company's Restated Articles of Incorporation
currently authorizes the Company to issue up to 50,000,000 shares of Nevada
Common Stock, $.001 par value and 10,000,000 shares of Nevada Preferred Stock,
$0.01 par value. The Company's Restated Articles of Incorporation currently
provide that the designations, preferences and relative, participating, option
or other special rights or qualifications, limitations or restrictions thereof
shall be fixed by resolution of the Board of Directors. The Delaware Certificate
will also provide that the Company is authorized to issue 50,000,000 shares of
Delaware Common Stock, $.001 par value and 10,000,000 shares of Delaware
Preferred Stock, $0.01 par value, and that the designations, preferences and
relative, participating, option or other special rights or qualifications,
limitations or restrictions thereof shall be fixed by resolution of the Board of
Directors.
Amendment to Charter and Bylaws. Delaware and Nevada law require the approval of
the holders of a majority of all outstanding shares entitled to vote (with, in
each case, each stockholder being entitled to one vote for each share so held)
to approve proposed amendments to a corporation's charter. Neither state
requires stockholder approval for the board of directors of a corporation to fix
the voting powers, designation, preferences, limitations, restrictions and
rights of a class of stock provided that the corporation's charter documents
grant such power to its board of directors. The holders of the outstanding
shares of a particular class are entitled to vote as a class on a proposed
amendment if the amendment would alter or change the power, preferences or
special rights of one or more series of any class so to affect them adversely.
The number of authorized shares of any such class of stock may be increased or
decreased (but not below the number of shares then outstanding) by the
affirmative vote of the holders of a majority of the stock entitled to vote
thereon (without a class vote) if so provided in any amendment to the
Certificate of Incorporation or resolutions creating such class of stock.
Business Combinations. The Delaware Company will be subject to the provisions of
Section 203 of the Delaware GCL. That section provides, with certain exceptions,
that a Delaware corporation may not engage in any of a broad range of business
combinations with a person or affiliate, or associate of such person, who is an
"interested stockholder" for a period of three years from the date that such
person became an interested stockholder unless: (i) the transaction resulting in
a person becoming an interested stockholder, or the business combination, is
approved by the Board of Directors of the corporation before the person becomes
an interested stockholder; (ii) the interested stockholder acquires 85% or more
of the outstanding voting stock of the corporation in the same transaction that
makes it an interested stockholder (excluding shares owned by persons who are
both officers and directors of the corporation, and shares held by certain
employee stock ownership plans); or (iii) on or after the date the person
becomes an interested stockholder, the business combination is approved by the
corporation's Board of Directors and by the holders of at least 662/3% of the
corporation's outstanding voting stock at an annual or special meeting,
excluding shares owned by the interested stockholder. An "interested
stockholder" is defined as any person that is (i) the owner of 15% or more of
the outstanding voting stock of the corporation or (ii) an
Page -9-
<PAGE>
affiliate or associate of the corporation and was the owner of 15% or more of
the outstanding voting stock of the corporation at any time within the
three-year period immediately prior to the date on which it is sought to be
determined whether such person is an interested stockholder. Section 203 further
provides that where it specifies a particular stockholder vote required to
approve a matter, no provision in the certificate of incorporation or bylaws may
require a greater vote.
Nevada law regulates combinations more stringently. First, an interested
stockholder is defined as a beneficial owner of 10% or more of the voting power.
Second, the three-year moratorium can be lifted only by advance approval by a
corporation's board of directors, as opposed to Delaware's provision that allows
interested stockholder combinations at the time of the transaction with
stockholder approval. Finally, after the three-year period, combinations remain
prohibited unless (i) they are approved by the board of directors, the
disinterested stockholders or a majority of the outstanding voting power not
beneficially owned by the interested party or (ii) the interested stockholders
satisfy certain fair value requirements. As in Delaware, a Nevada corporation
may opt-out of the statute. The Nevada Certificate does not authorize such an
opt-out.
Classified Board of Directors. Nevada law permits corporations to classify
boards of directors provided that at least one-fourth of the directors is
elected annually. Delaware law also permits any Delaware corporation to classify
its board of directors into as many as three classes with staggered terms of
office. The stockholders must elect only one class each year and each class has
a term of office of at least one year but no longer than three years. If
Proposal 1 and this Proposal 3 are approved by the stockholders at the Annual
Meeting, the Delaware Certificate would provide for a staggered board.
Cumulative Voting. Cumulative voting for directors entitles each stockholder to
cast a number of votes that is equal to the number of voting shares held by such
stockholder multiplied by the number of directors to be elected and to cast all
such votes for one nominee or distribute such votes among up to as many
candidates as there are positions to be filled. Cumulative voting may enable a
minority stockholder or group of stockholders to elect at least one
representative to the Board of Directors where such stockholders would not be
able to elect any directors without cumulative voting. Nevada law permits
cumulative voting in the election of directors as long as certain procedures are
followed. Although Delaware law does not explicitly grant cumulative voting, a
Delaware corporation may provide for cumulative voting in the corporation's
certificate of incorporation. The Nevada Articles do not provide for cumulative
voting. The Delaware Certificate would not provide for cumulative voting.
Vacancies. Vacancies during the year shall be filled by the affirmative vote of
a majority of the remaining directors then in office, even if less than a
quorum. Any director appointed shall hold office for the remainder of the full
term of the class of directors in which the vacancy occurred.
Removal of Directors. Under Delaware law, the holders of a majority of voting
shares of each class entitled to vote at an election of directors may vote to
remove any director or the entire board without cause unless (i) the board is a
classified board in which case directors may be removed only for cause, or (ii)
the corporation has cumulative voting in which case if less than the entire
board is to be removed no director may be removed without cause if the vote cast
against his removal would be enough to elect him. Nevada law requires at least
two-thirds of the majority of voting shares or class entitled to vote at an
election of directors to remove a director. Furthermore, Nevada law does not
make a distinction between removals for cause and removals without cause. Under
Delaware law, a director of a corporation that does not have a classified board
or permit cumulative voting may be removed, without cause, by the affirmative
vote of a majority of the outstanding shares entitled to vote at an election of
directors.
Page -10-
<PAGE>
Actions by Written Consent of Stockholders. Nevada law and Delaware law each
provide that any action required or permitted to be taken at a meeting of the
stockholders may be taken without a meeting if the holders of outstanding stock
having at least the minimum number of votes that would be necessary to authorize
or take such action at a meeting consents to the action in writing. In addition,
Delaware law requires the corporation to give prompt notice of the taking of
corporate action without a meeting by less than unanimous written consent to
those stockholders who did not consent in writing.
Stockholder Vote for Mergers and Other Corporate Reorganizations. In general,
both jurisdictions require authorization by an absolute majority of outstanding
shares entitled to vote, as well as approval by the board of directors with
respect to the terms of a merger or a sale of substantially all of the assets of
the corporation. Neither Nevada law nor Delaware law requires approval by the
stockholders of a surviving corporation in a merger or consolidation as long as
the surviving corporation issues no more than 20% of its voting stock in the
transaction.
Stockholders' Dissenters' Rights. In Delaware, dissenting stockholders of a
corporation engaged in certain major corporate transactions are entitled to
appraisal rights. A similar provision regarding appraisal rights was repealed
from Nevada law by the Nevada legislature. Appraisal rights permit a stockholder
to receive cash equal to the fair market value of the stockholder's shares (as
determined by agreement by the parties or by court), in lieu of the
consideration such stockholder would otherwise receive in any such transaction.
Under Delaware law, appraisal rights are generally available for the
shares of any class or series of stock of the Delaware Company in a merger or
consolidation, provided that no appraisal rights are available for the shares of
any class or series of stock which, at the record date for the meeting held to
approve such transaction, were either (i) listed on a national securities
exchange or designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc.
("NASD") or (ii) held of record by more than 2,000 stockholders. Even if the
shares of any class or series of stock meet the requirements of clause (i) or
(ii) above, appraisal rights are available for such class or series if the
holders thereof receive in the merger or consolidation anything except: (i)
shares of stock of the corporation surviving or resulting from such merger or
consolidation; (ii) shares of stock of any other corporation which at the
effective date of the merger or consolidation is either listed on a national
securities exchange or designated as a national market system security on an
interdealer quotation system by the NASD or held of record by more than 2,000
stockholders; (iii) cash in lieu of fractional shares; or (iv) any combination
of the foregoing. No appraisal rights are available to stockholders of the
surviving corporation if the merger did not require their approval.
Stockholder Inspection Rights. Delaware law grants any stockholder the right to
inspect and to copy for any proper purpose the corporation's stock ledger, a
list of its stockholders, and its other records. A proper purpose is one
reasonably related to such person's interest as a stockholder. Directors also
have the right to examine the corporation's stock ledger, a list of its
stockholders and its other records for a purpose reasonably related to their
positions as directors. Nevada law provides that any person who has been a
stockholder of record of a corporation for at least six months immediately
preceding his demand, or any person who owns or has been authorized by the
holders of at least 5% of all of its outstanding shares, is entitled to inspect
and copy the stock ledger. Furthermore, any person who has been a stockholder of
record of any corporation and owns or has been authorized by the holders of at
least 15% of all of its outstanding shares, is entitled to inspect and copy
other corporate records.
Page -11-
<PAGE>
Derivative Suits. Under Delaware and Nevada law, a stockholder may bring a
derivative action on behalf of the corporation only if the stockholder was a
stockholder of the corporation at the time of the transaction in question or the
stockholder acquired the stock thereafter by operation of law.
Dividends and Distributions. Nevada law prohibits distributions to stockholders
when the distributions would (i) render the corporation unable to pay its debts
as they become due in the usual course of business; and (ii) render the
corporation's total assets less than the sum of its total liabilities plus the
amount that would be needed to satisfy the preferential rights upon dissolution
of stockholders whose preferential rights are superior to those receiving the
distribution.
Delaware law permits a corporation to pay dividends out of either (i)
surplus or (ii) in case there is no surplus, out of its net profits for the
fiscal year in which the dividend is declared and/or the preceding fiscal year,
except when the capital is diminished to an amount less than the aggregate
amount of the capital represented by issued and outstanding stock having a
preference on the distribution of assets. Delaware law defines surplus as the
excess, at any time, of the net assets of a corporation (determined on a fair
market value, as opposed to historical cost, basis) over its stated capital.
To date, the Company has not paid dividends on its common stock. The
payment of dividends, if any, would be within the discretion of the Board of
Directors of the Delaware Company and would depend upon the Delaware Company's
earnings, its capital requirements and financial condition, and other relevant
factors. The Board of the Delaware Company would not declare any dividends in
the foreseeable future, but instead would retain all earnings, if any, for use
in the Delaware Company's business operations.
Limitation of Liability and Indemnification Matters. Nevada law and Delaware law
each permit corporations to adopt provisions in their charter documents that
eliminate or limit the personal liability of directors to the corporation or
their stockholders for monetary damages for breach of a director's fiduciary
duty, subject to the differences discussed below.
In suits that are not brought by or in the right of the corporation, both
jurisdictions permit a corporation to indemnify directors, officers, employees
and agents for attorney's fees and other expenses, judgments and amounts paid in
settlement. The person seeking indemnity may recover as long as he acted in good
faith and believed his actions were either in the best interests of or not
opposed to the best interests of the corporation. Similarly, the person seeking
indemnification must not have had any reason to believe his conduct was
unlawful.
In derivative suits, a corporation in either jurisdiction may indemnify
its agents for expenses that the person actually and reasonably incurred. A
corporation may not indemnify a person if the person was adjudged to be liable
to the corporation unless a court otherwise orders. Delaware law does not permit
corporations to indemnify parties for amounts paid in derivative actions without
court approval.
No corporation may indemnify a party unless it makes a determination that
indemnification is proper. In Delaware, the corporation through its
stockholders, directors or independent legal counsel will determine that the
conduct of the person seeking indemnity conformed with the statutory provisions
governing indemnity. In Nevada, the corporation through its stockholders,
directors or independent counsel must only determine that the indemnification is
proper.
Page -12-
<PAGE>
Delaware law provides that a corporation may advance attorney's fees to a
director, officer or employee upon receipt of an undertaking to repay the
corporation if the person seeking the advance is ultimately found not to be
entitled to indemnification. Nevada law does not require employees to give the
undertaking. Both jurisdictions preclude liability limitation for acts or
omissions not in good faith or involving intentional misconduct and for paying
dividends or repurchasing stock out of other than lawfully available funds.
Nevada law does not expressly preclude a corporation from limiting liability for
a director's breach of the duty of loyalty or preclude a corporation from
limiting liability for any transaction from which a director derives an improper
personal benefit.
Accounting Treatment. The proposed Reincorporation and Merger is intended to be
a tax free organization under Section 368(a)(1)(F) of the Internal Revenue Code
of 1986, as amended. Accordingly, no gain or loss would be recognized by the
holder of Common Stock of the Company as a result of the transaction, and,
likewise, no gain or loss will be recognized by the Delaware Company. Each
former holder of Common Stock of the Company will have the same basis in the
Delaware Common Stock record as such holder has in the Common Stock of the
Company held on the Effective Time of the proposed Reincorporation and Merger.
Each stockholder holding period with respect to the Delaware Common Stock will
include the period during which such holder held the corresponding Common Stock
of the Company, provided the latter is held as a capital asset on the effective
date of the proposed reincorporation and merger.
Although the Company believes that the foregoing summary describes the
material federal income tax consequences of the proposed reincorporation and
merger, there can be no assurance that the actual tax consequences will not be
different. Stockholders should be advised that the Company has not obtained, and
does not intend to request, either a ruling from the Internal Revenue Service or
an opinion of counsel regarding any such tax consequences. Furthermore, the
foregoing is only a summary of the federal income tax consequences of the
proposed Reincorporation and Merger, and does not deal with all the tax
consequences that may be relevant to particular stockholders, such as
stockholders who are dealers in securities, foreign persons or stockholders who
acquired their Common Stock upon the exercise of stock options or in other
compensatory transactions. In view of the individual nature of tax consequences,
stockholders are urged to consult their own tax advisor as to the specific tax
consequences to them of the proposed transaction, including the applicability of
federal, state, local and foreign tax laws.
Exchange of Certificates. Upon the Merger and Reincorporation becoming
effective, each outstanding share of Common Stock of the Nevada Company will be
converted into one fully paid and non-assessable share of Common Stock of the
Delaware Company. Shareholders may, but are not required to, exchange their
current share certificates for shares of the Delaware Company. Shareholders who
desire to exchange their shares may do so following consummation of the Merger
and Reincorporation by surrendering them to the Company's transfer agent,
American Security Transfer and Trust, Inc., who will issue new certificates for
shares of Common Stock upon receipt of old share certificates. Delivery of stock
certificates issued by the Company prior to the effectiveness of the Merger and
Reincorporation will constitute a good delivery of shares in transactions
subsequent to reincorporation. Certificates of the Delaware Company will be
issued with respect to transfers consummated after reincorporation.
THE BOARD URGES STOCKHOLDERS TO VOTE "FOR"
THIS PROPOSAL
Unless Marked to the Contrary, Proxies Will Be Voted "For" Approval.
Page -13-
<PAGE>
PROPOSAL FOUR
TO APPROVE DeANGELIS & HIGGINS, LLC AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE YEAR 2000
DeAngelis & Higgins, LLC., independent certified public accountants, has
been selected by the Board of Directors as the Company's independent auditor for
the current fiscal year. A representative of DeAngelis & Higgins, LLC. is
expected to be present at the Annual Meeting, and will have an opportunity to
make a statement if he or she desires to do so and is expected to be available
to respond to appropriate questions.
THE BOARD URGES STOCKHOLDERS TO VOTE "FOR" THIS PROPOSAL
Unless Marked to the Contrary, Proxies Will Be Voted "For" Approval.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes thereto set forth certain information known
to the Company with respect to the beneficial ownership of the Company's Common
Stock as of April 18, 2000 by (a) the "Named Executive Officers" identified
under the caption "Executive Compensation and Other Information," (b) each
Director of the Company, (c) each person known by the Company to be the
beneficial owner of more than 5% of the Company's Common Stock, and (d) all
executive officers and Directors of the Company as a group.
Page -14-
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature of Beneficial Percent of
Name and Address of Beneficial Owner (1) Ownership(2) Class
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Quentin T. Kelly .................................. 2,800,000 10.3%
George S. Mennen Rev. Trust
William G. Mennen IV, Trustee ................... 1,583,333 5.8%
Joseph Cygler ..................................... 550,000 2.0%
Rolf Hafeli ....................................... 247,530 1.0%
Dr. Martin Beyer .................................. 193,000 *%
Peter Ferguson .................................... 162,000 *%
Dr. Russell Sturzebecker .......................... 136,141 *%
All executive officers and directors as a group
(6 persons) ....................................... 5,672,004 19.1%
</TABLE>
* Less than one percent
(1) The address for each person listed is Pennington Business Park, 55 Route 31
South, Pennington, New Jersey 08534.
(2) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares of Common Stock which such person has the
right to acquire within 60 days of March 31, 2000. For purposes of computing the
percentage of outstanding shares of Common Stock held by each person or group of
persons named above, any security which such person or persons has or have the
right to acquire within such date is deemed to be outstanding but is not deemed
to be outstanding for the purpose of computing the percentage ownership of any
other person. Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the Company believes based on information
supplied by such persons, that the persons named in this table have sole voting
and investment power with respect to all shares of Common Stock which they
beneficially own.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act of 1934, as amended (the "Exchange
Act"), requires the Company's executive officers and directors and persons who
own more than ten percent of a registered class of the Company's equity
securities (collectively, the "Reporting Persons") to file reports of ownership
and changes in ownership with the Securities and Exchange Commission and to
furnish the Company with copies of these reports. The Company believes that all
filings required to be made by the Reporting Persons during the fiscal year
ended December 31, 1999 were made on a timely basis.
MANAGEMENT
The following table sets forth the names, ages and positions of the
executive officers and directors of the Company as of March 1, 2000. Their
respective backgrounds are described in Matters to be Brought Before
Page -15-
<PAGE>
the Meeting - Proposal Two - Election of Directors,?other than Messrs. Pell,
Rangarajan, Ferguson, Salvo and Ms. Harris whose backgrounds are described
following the table:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ------------------------ ----- -------------------------------------------------
<S> <C> <C>
Quentin T. Kelly 65 Chairman of the Board and Chief Executive Officer
John A. Pell 74 President and Chief Operating Officer
James S. Farrin 62 June Successor, President and Chief Operating Office
Dr. Anand Rangarajan 50 Executive Vice President
Peter I. Ferguson 56 Vice President
Terri Lyn Harris 33 Vice President-Controller
Dr. Martin Beyer 67 Director
Joseph Cygler 64 Director
Dr. Russell Sturzebecker 82 Director
Rolf Hafeli 34 Director
Stephen Salvo 50 Secretary
</TABLE>
John A. Pell has served as President and Chief Operating Officer of the
Company since June 23, 1998 and is retiring in June 2000, although he will
continue to assist the company as an Advisor. Mr. Pell was a senior officer with
Chase Manhattan Bank in New York and London where he was in charge of African
banking activities for U.S. Multinationals. He was Managing Director of a
European Bank Consortium and President of a trade finance banking organization
in Hong Kong. He is a graduate of Princeton University and the Wharton School
(MBA) of the University of Pennsylvania.
James S. Farrin, President and Chief Operating Officer in June 2000,
(former Marketing Consultant to WorldWater Corp.), is the former President of
Mennen International, Division of The Mennen Co. (Personal Care Products). Under
his leadership the Division doubled sales and quadrupled profit in four years.
Mr. Farrin has extensive international experience in consumer packaged goods
with Fortune 500 companies.
Dr. Anand Rangarajan, Vice President and General Manager, is a solar and
water pump specialist. He has 20 years experience in all aspects of the solar
electric business and has pioneered the development of several proprietary solar
water pumping systems, products and markets. His systems have been installed in
over 20 countries. He holds his Ph.D. in Engineering from University of
Wisconsin.
Peter I. Ferguson, Vice President of Administration, joined WorldWater in
1989. He previously served as a vice president and general management executive
and accountant for companies in New York and New Jersey. He graduated from
Rutgers University.
Terri Lyn Harris, Vice President-Controller, joined WorldWater in 1999
after 3 years of consulting to the Company. She spent the last 10 years as the
Controller for a publicly traded international manufacturing company. Ms. Harris
graduated from Ursinus College with a degree in Economics and holds an MBA from
Rider University.
Stephen A. Salvo is a partner in the law firm of Salvo, Russell and
Fichter specializing in corporate
Page -16-
<PAGE>
and securities matters and is the Company's SEC counsel.
MEETING ATTENDANCE
The business of the Company is managed under the direction of the Board.
The Board meets during the Company's fiscal year to review significant
developments affecting the Company and to act on matters requiring Board
approval. The Board held four formal meetings and acted by unanimous written
consent ten times during the fiscal year ended December 31, 1999. All of the
Directors attended at least 80% of the Board meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
Strategic Planning Committee
- ----------------------------
Number of Members: 2
Members: Dr. Davinder Sethi (Chairman)
Dr. Martin Beyer.
Number of Meetings in 1999: 1
Functions: Establishes the Company's production and
sales goals.
Makes recommendations regarding the
Company's marketing efforts.
Consults with international experts
regarding product distribution.
Compensation and Finance Committee
- ----------------------------------
Number of Members: 2
Members: Dr. Davinder Sethi (Chairman)
Joseph Cygler
Number of Meetings in 1999: 1
Functions: Establishes the salaries and bonuses for the
Company's executive offices.
Considers and makes recommendations on the
Company's executive compensation plans.
Makes recommendations on grants of stock
options.
Audit Committee
- ---------------
Page -17-
<PAGE>
Number of Members: 2
Members: Joseph Cygler (Chairman)
Dr. Martin Beyer
Number of Meetings in 1999: 1
Functions: Selects independent public accountants to
audit the Company's books and records,
subject to stockholder approval.
Consults with the Company's independent
public accountants during the preparation of
audits.
Reviews internal controls, accounting
practices, financial structure and financial
reporting.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the
compensation paid by the Company to its chief executive officer and to each
other executive officer of the Company who received at least $100,000 in salary
and bonus during 1999 (the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION (1) AWARDS
----------------------- ------
SECURITIES
NAME AND FISCAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#) COMPENSATION
- ------------------ ---- ------ ----- ----------- ------------
<S> <C> <C> <C> <C> <C>
Quentin T. Kelly, 1999 $42,000 $0 300,000 $0
Chairman & Chief Executive
Officer
</TABLE>
During 1999, 498,373 options to purchase shares of Common Stock were
granted under the Company's stock options plans.
DIRECTOR COMPENSATION
The Company does not pay its non-employee directors although they are
eligible for and granted options to purchase shares of Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Included in notes payable and long-term debt at December 31, 1999 and
1998, are amounts payable to employees, directors and their immediate relatives
as follows:
Page -18-
<PAGE>
1999 1998
-------- --------
Directors $ 4,500 $109,400
Employees $110,645 $ 35,000
Immediate relatives $ 17,000 $ 38,000
-------- --------
Total $132,145 $182,400
======== ========
Directors notes payable declined $104,900 primarily due to conversion of
such debt into common stock.
The Company occupied space in 1999 and 1998 that is owned by its
Chairman/CEO and leased this space on a month to month basis. The amount paid to
the Chairman/CEO amounted to $30,000 in 1999 and 1998.
STOCKHOLDER PROPOSALS
A proper proposal submitted by a stockholder in accordance with applicable
rules and regulations for presentation at the Company's next annual meeting that
is received at the Company's principal executive office by December 31, 2000
will be included in the Company's proxy statement and form of proxy for that
meeting.
PERSONS MAKING THE SOLICITATION
The enclosed proxy is solicited on behalf of the Board of Directors of the
Company. The cost of soliciting proxies in the accompanying form will be paid by
the Company. Officers of the Company may solicit proxies by mail, telephone or
telegraph. Upon request, the Company will reimburse brokers, dealers, banks and
trustees, or their nominees, for reasonable expenses incurred by them in
forwarding proxy material to beneficial owners of shares of the Common Stock.
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for
action at the meeting other than the matters set forth herein. Should any other
matter requiring a vote of stockholders arise, the proxies in the enclosed form
confer upon the person or persons entitled to vote the shares represented by
such proxies discretionary authority to vote the same in accordance with their
best judgment in the interest of the Company.
FINANCIAL STATEMENTS
The consolidated balance sheet of the Company as of December 31, 1999, and
the related consolidated statements of operations, stockholders' deficiency, and
cash flows for the year ended December 31, 1999 contained on pages F1 through
F22 of the Company's Annual Report on Form 10-KSB, the Management's Discussion
and Analysis or Plan of Operation contained on pages 11 through 12 of such
Annual Report, and the Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure on page 12 of such Annual Report are
incorporated by reference in this Proxy Statement. The remainder of the Annual
Report does not constitute a part of the proxy solicitation material.
Page -19-
<PAGE>
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON TO WHOM A COPY OF
THIS PROXY STATEMENT IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON AND BY FIRST CLASS MAIL OR OTHER EQUALLY PROMPT MEANS WITHIN ONE BUSINESS
DAY OF RECEIPT OF SUCH REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-KSB. REQUESTS SHOULD BE DIRECTED TO THE ATTENTION OF JOHN A. PELL, WORLDWATER
CORP., PENNINGTON BUSINESS PARK, 55 ROUTE 31 SOUTH, PENNINGTON, NEW JERSEY
08534.
By Order of the Board of Directors,
QUENTIN T. KELLY,
Chairman and Chief
April 25, 2000 Executive Officer
Page -20-
<PAGE>
[FRONT OF PROXY CARD]
WORLDWATER CORP.
BOARD OF DIRECTORS PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS AT
1:00 P.M., TUESDAY, JUNE 20, 2000
The undersigned stockholder of WorldWater Corp. (the "Company") hereby
appoints Quentin T. Kelly and Terri Lyn Harris, or either of them, as proxies,
each with full powers of substitution, to vote the shares of the undersigned at
the above-stated Annual Meeting and at any adjournment(s) thereof:
1. To Approve the proposed amendment of the Restated Articles of
Incorporation of the Company to provide for staggered terms for directors:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2(a). IF PROPOSAL 1 IS APPROVED, election of the following nominees for
directors in the Classes indicated: Class 1: Dr. Russell Sturzebecker and Dr.
Martin Beyer; Class 2: Dr. Davinder Sethi and Rolf Hafeli; Class 3: Quentin T.
Kelly and Joseph Cygler:
[ ] FOR the nominees listed above [ ] WITHHOLD AUTHORITY
to vote for the nominees
listed above
(INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write that nominee's name on the space provided below):
2(b). IF PROPOSAL 1 IS NOT APPROVED, election of the following nominees
for Director for one-year terms:
Quentin T. Kelly Rolf Hafeli Joseph Cygler
Dr. Martin Beyer Dr. Russell Sturzebecker Dr. Davinder Sethi
[ ] FOR the nominees listed above [ ] WITHHOLD AUTHORITY
to vote for the nominees
listed above
(INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write that nominee's name on the space provided below):
3. To Approve the proposed merger and reincorporation of the Company:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To Approve the proposed selection of DeAngelis & Higgins, LLC as the
Company's independent public accountants for the year 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. On any other business that may properly come before the meeting; hereby
revoking any proxy or proxies heretofore given by the undersigned.
(Please sign on the reverse side)
<PAGE>
[BACK OF PROXY CARD]
(Continued from reverse side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE REVERSE SIDE. IF A
CHOICE IS NOT INDICATED WITH RESPECT TO ITEMS (1) AND (2(a)) and (2(b)) THIS
PROXY WILL BE VOTED "FOR" SUCH ITEMS. THE PROXIES WILL USE THEIR DISCRETION WITH
RESPECT TO ANY MATTER REFERRED TO IN ITEM (3). THIS PROXY IS REVOCABLE AT ANY
TIME BEFORE IT IS EXERCISED.
Receipt herewith of the Company's Notice of Meeting and Proxy Statement, dated
on or about May 18, 2000, is hereby acknowledged.
Dated: ______________________________, 2000
____________________________________
____________________________________
____________________________________
(Signature of Stockholder(s))
(Joint owners must EACH sign. Please
sign EXACTLY as your name(s)
appear(s) on this card. When signing
as attorney, trustee, executor,
administrator, guardian or corporate
officer, please give your FULL
title.)
PLEASE SIGN, DATE AND MAIL TODAY.
<PAGE>
ANNEX 1
<PAGE>
PLAN OF MERGER
OF
WOLRDWATER CORP., a Nevada Corporation
WITH AND INTO
WORLDWATER CORP., a Delaware Corporation
Background
----------
WHEREAS, WorldWater Corp. (the "Surviving Corporation") was
originally incorporated as a business corporation under the laws of the State of
Delaware on ____________, 2000; and
WHEREAS, WorldWater Corp. ("WorldWater") was originally incorporated
as a business corporation under the laws of the State of Nevada on April 3,
1985; and
WHEREAS, it has been proposed that WorldWater be merged with and into
the Surviving Corporation pursuant to the Delaware General Corporation Law,
Title 8, Section 263, the Nevada General Corporation Law, Section 92A.100, and
this Plan of Merger, subject to the approval of this Plan of Merger by the board
of directors and stockholders of the Surviving Corporation and the board of
directors and stockholders of WorldWater.
Terms
-----
1. Merger. Upon the Effective Date (as defined in Section 6.2 below) of
the merger (the "Merger"), WorldWater shall be merged with and into the
Surviving Corporation and, thereafter, the separate existence of WorldWater
shall cease and the Surviving Corporation shall continue in existence under and
subject to the laws of the State of Delaware.
2. Certificate of Incorporation and By-laws of Surviving Corporation.
2.1 The Certificate of Incorporation of the Surviving Corporation as
in effect on the date hereof shall remain in effect as the Certificate of
Incorporation of the Surviving Corporation following the Merger, until
thereafter altered, amended or repealed as therein provided or as permitted by
law.
2.2 The By-laws of the Surviving Corporation, as in effect on the
Effective Date, shall remain in effect as the By-laws of the Surviving
Corporation following the Merger, until thereafter altered, amended or repealed
as provided therein.
3. Manner of Conversion of WorldWater Shares into Surviving Corporation
Shares.
3.1 On the Effective Date, all shares of common stock in WorldWater
shall be deemed cancelled and each shareholder of WorldWater common stock (a
"WorldWater Common Stockholder") shall be issued one share of the common stock
of the Surviving Corporation, $.001 par value per share, in exchange for each
share of WorldWater common stock held by that WorldWater Common Stockholder
immediately prior to the Merger.
3.2 On the Effective Date, all shares of preferred stock in
WorldWater shall be deemed cancelled and each shareholder of WorldWater
preferred stock (a "WorldWater Preferred Stockholder") shall be issued one share
of the preferred stock of the Surviving Corporation, $.01 par value per share,
in exchange for each share of WorldWater preferred stock held by that WorldWater
Preferred Stockholder immediately prior to the Merger.
<PAGE>
4. Effect of Merger.
4.1 Upon the Effective Date:
4.1.1 WorldWater and the Surviving Corporation shall become a
single entity which shall be the Surviving Corporation and the existence of
WorldWater shall cease;
4.1.2 All and singular, the rights, privileges, powers and
franchises of WorldWater and the Surviving Corporation, and all property, real,
personal and mixed, and all debts due to either of WorldWater or the Surviving
Corporation on whatever account, as well as for all things in action or
belonging to each of said entities shall be vested in the Surviving Corporation
without further act or deed; and all property, rights, privileges, powers and
franchises, and all and every other interest shall be thereafter as effectually
the property of the Surviving Corporation as they were of WorldWater and the
Surviving Corporation, respectively, and the title to any real estate vested by
deed or otherwise in either of said entities shall not revert or be in any way
impaired;
4.1.3 All rights of creditors and all liens upon any property
of any of WorldWater or the Surviving Corporation shall be preserved unimpaired,
and all fees, debts, liabilities, taxes, obligations and duties of either of
WorldWater or the Surviving Corporation shall thenceforth attach to the
Surviving Corporation, and may be enforced against it to the same extent as if
said debts, liabilities, taxes and duties had been incurred or contracted by it;
and
4.2 From and after the Effective Date, the officers and directors of
WorldWater shall execute or cause to be executed such further assignments,
assurances or other documents as the Surviving Corporation or its successors and
assigns may reasonably determine to be necessary or desirable to confirm the
transfer of title and ownership of WorldWater?s properties and rights to the
Surviving Corporation or to otherwise carry out the purposes of this Plan.
5. Directors and Officers of Surviving Corporation.
5.1 The Directors of the Surviving Corporation on the Effective Date
shall continue as the Directors of the Surviving Corporation and shall hold
office until their respective successors are duly elected and qualified.
5.2 The officers of the Surviving Corporation on the Effective Date
shall be and continue as the officers of the Surviving Corporation and shall
hold office until their respective successors are duly elected and qualified.
6. Adoption of Plan of Merger.
6.1 This Plan of Merger shall be submitted for approval to the board
of directors of the Surviving Corporation and the board of directors of
WorldWater and shall be effective as of the Effective Date, subject to such
approval and subsequent adoption by the stockholders of the Surviving
Corporation and the stockholders of WorldWater and filing of articles of merger
as hereinafter provided. Upon such approval and adoption, articles of merger
shall be prepared, executed and filed in the Offices of the Secretaries of State
of Delaware and Nevada in accordance with the applicable provisions of the
Delaware General Corporation Law and the Nevada General Corporation Law,
respectively. The Surviving Corporation shall comply with the provisions of
article 78.370 of the Nevada General Corporation Law with respect to notice to
stockholders.
<PAGE>
6.2 The Merger provided for by this Agreement shall become effective
on __________, 2000 (the "Effective Date").
7. Binding Agreement. This Plan of Merger may be terminated by the board
of directors of the Surviving Corporation or the board of directors of
WorldWater at any time prior to the filing of the articles of merger as set
forth above. Upon the filing of articles of merger, this Plan of Merger shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
