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
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement.
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2)).
[ ] Definitive Proxy Statement
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11 (c) or Rule 14a-12.
-------------------------------------------------------------------------------
FuelNation Inc.
(Name of Registrant as Specified in Its Charter)
-------------------------------------------------------------------------------
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.
<PAGE>
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
FuelNation Inc.
1700 North Dixie Highway
Boca Raton
Florida 33432
October , 2000
To the Shareholders of FuelNation Inc.:
The written consent of the holders of FuelNation Inc.'s (the "Company") Common
Stock, par value $0.01 per share, of record at the close of business on October
20, 2000, is requested in regard to; (A) an amendment to FuelNation Inc.'s
Articles of Incorporation increasing the Company's authorized capital stock from
110,000,000 to 370,000,0000 and (B) the election of three members of the Board
of Directors to hold office until the next Annual Meeting of shareholders and
until their successors have been elected, all as more fully described in the
accompanying Consent Solicitation Statement. It is requested that your written
consent, using the accompanying Consent Card, be delivered to FuelNation Inc. at
1700 North Dixie Highway, Boca Raton, Florida, 33432 on or before [ ], 2000. An
addressed return envelope is enclosed for this purpose, which requires no
postage if mailed in the United States.
By Order of the Board of Directors,
Christopher R. Salmonson
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
FuelNation Inc.
1700 North Dixie Highway
Boca Raton
Florida 33432
CONSENT SOLICITATION STATEMENT
FOR
THE SOLICITATION OF WRITTEN CONSENTS
This Consent Solicitation Statement is furnished to the shareholders of
FuelNation Inc., a Florida corporation (the "Company"), by the Board of
Directors in connection with the solicitation by the Company of the written
consents of the shareholders to; (A) amend FuelNation Inc.'s Articles of
Incorporation in order to, (i) increase the number of shares of Common Stock,
par value $0.01 (the "Common Stock"), which the Company has authority to issue
by 250,000,000 from 100,000,000 to 350,000,000, (ii) increase the number of
shares of preferred stock which the Company has authority to issue from
10,000,000 to 20,000,000 and, consequently, to increase the total number of
shares of all classes of stock which the Company shall have authority to issue
by 260,000,000, from 110,000,000 to 370,000,000 (the "Capital Stock Amendment")
and (B) to elect three members to the Company's Board of Directors, to hold
office until the next Annual Meeting of shareholders and until their successors
have been elected (the "Election of Directors") (the Election of Directors and
the Capital Stock Amendment are hereinafter collectively referred to as the
"Requested Action"). The text of the amendment to the Articles of Incorporation
is set forth below under the heading Proposal One "The Capital Stock Amendment."
Certain information regarding the Company's nominees for Director is set forth
below under Proposal Two "Election of Directors."
The Company intends to distribute this Consent Solicitation Statement and
the accompanying consent card commencing on or about November 2, 2000, to the
holders of record of the Company's Common Stock as of the close of business on
October 20, 2000. This date is referred to as the "record date." Written
consents of shareholders constituting a majority of the voting power of the
Company's outstanding voting equity are required to approve the Requested
Action. Triad Petroleum, LLC, ("Triad") the owner of a majority of the voting
power represented by the Company's outstanding voting equity, has indicated an
intention to deliver its consent to the Requested Action.
The principal executive offices of the Company are located at 1700 North
Dixie Highway, Boca Raton, Florida 33432, and the telephone number of the
Company is 1-561-391-5883.
<PAGE>
Reasons for the Capital Stock Amendment
Pursuant to a Share Sale and Contribution Agreement (the "Agreement")
dated as of September 14, 2000, Triad was granted a contractual right to acquire
96% of the voting equity of the Company through the sale of a combination of the
Company's common and convertible preferred stock. In consideration thereof,
Triad agreed to assign its exclusive 50 year royalty free license and
distribution rights under a Technology License and Marketing Agreement with E
Mation LLC (an affiliate of Triad) which provides for the exclusive rights to
make, market and sell products and services using E Mation's proprietary
technology which integrates the business operations of both wholesale
distribution and retail sale of fuel. The transaction closed on October 13,
2000.
Upon closing of the Triad transaction, the Company issued to Triad
94,000,000 shares of Common Stock and 5,000,000 shares of a newly designated
series of its convertible preferred stock, the Class D Convertible Preferred
Stock (the "Series D Preferred") approximating, in the aggregate, 96% of the
voting equity of the Company.
As a result of the Triad transaction, only 83,228 shares of Common Stock
and 4,300,000 shares of preferred stock remain available for issuance by the
Company. Accordingly, unless the number of authorized shares of Common Stock is
increased, the Company will have insufficient shares of Common Stock to satisfy
its share reservation obligations under the terms of the Series D Preferred and
will be unable to satisfy its obligations to issue shares of Common Stock if the
outstanding shares of Series D Preferred stock are converted. In addition, a
shortage of authorized shares of Common Stock or Preferred Stock will
significantly restrict the ability of the Company to engage in equity financings
or to engage in stock based acquisitions of existing companies, assets or
technologies that can bring value to the Company's shareholders.
Triad, the owner of a majority of the Company's voting power, has
indicated an intention to deliver its consent to the Capital Stock Amendment.
Subject to applicable laws and regulations, following receipt of Triad's
consent, the Company does not intend to solicit any further consents to the
Capital Stock Amendment from the holders of its Common Stock.
No holder of shares of the Company's capital stock is entitled as such, as
a matter of right, to subscribe for or purchase any part of any new or
additional issue of any stock of any class, series or kind whatsoever, or to
subscribe for or purchase securities convertible into stock of any class, series
or kind whatsoever.
PROPOSAL ONE
The Capital Stock Amendment
The first paragraph of Article III of the Company's Articles of
Incorporation reads as follows before giving effect to the Capital Stock
Amendment:
The aggregate number of shares of all classes of stock which the
Corporation is authorized to have outstanding at any one time is 110,000,000
shares, of which 10,000,000 shares shall be Preferred Stock, par value $.01 per
<PAGE>
share, issuable in one or more classes or series (the "Preferred Stock"), and
100,000,000 shares shall be Common Stock, par value $.01 per share (the "Common
Stock"). All or any part of the Common Stock and Preferred Stock may be issued
by the Corporation from time to time and for such consideration as the Board of
Directors may determine. All of such shares, if and when issued, and upon
receipt of such consideration by the Corporation, shall be fully paid and
non-assessable.
Pursuant to the Capital Stock Amendment, the first paragraph of Article
III of the Company's Article of Incorporation would be deleted and replaced by
the following:
The aggregate number of shares of all classes of stock which the
Corporation is authorized to have outstanding at any one time is 370,000,000
shares, of which 20,000,000 shares shall be Preferred Stock, par value $.01 per
share, issuable in one or more classes or series (the "Preferred Stock"), and
350,000,000 shares shall be Common Stock, par value $.01 per share (the "Common
Stock"). All or any part of the Common Stock and Preferred Stock may be issued
by the Corporation from time to time and for such consideration as the Board of
Directors may determine. All of such shares, if and when issued, and upon
receipt of such consideration by the Corporation, shall be fully paid and
non-assessable.
The Board of Directors has adopted resolutions that set forth the Capital
Stock Amendment, declare the advisability of the Capital Stock Amendment, and
submit the Capital Stock Amendment to the shareholders for approval. The Board
recommends approval of the Capital Stock Amendment by the shareholders
PROPOSAL TWO
ELECTION OF DIRECTORS
In accordance with the By-laws of the Company, the Company's Directors are
elected at each Annual Meeting of Shareholders and hold office until the next
election of Directors and until their successors are duly elected and qualified.
Messrs. Salmonson and Simmons were elected by the Company's Board of Directors
pursuant to the Board's authority to elect Directors to fill vacancies in the
membership of the Board.
The Board of Directors proposes the election of the following nominees as
directors:
Christopher R. Salmonson
Robert L. Simmons
Shaikh Isa Mohammed Isa Al Khaifa
If elected, each nominee is expected to serve until the 2001 Annual
Meeting of Shareholders and his successor is duly elected and qualified. The
Company has no reason to believe that any nominee will be unable or unwilling to
serve if elected as a Director.
Triad, the owner of a majority of the Company's voting power, has
indicated an intention to deliver its consent to the election of Messrs.
Salmonson and Simmons and Shaikh Isa Mohammed Isa Al Khaifa. Subject to
applicable laws and regulations, the Company does not intend to solicit any
further consents to the Election of Directors from the holders of its Common
Stock.
<PAGE>
Information With Respect to Nominees and Executive Officers
The following table sets forth certain information with respect to the
directors, nominees for director, executive officers and key employees.
Name Age Position
------------------------- ----- ---------------------------------------
Christopher R. Salmonson 35 Director, Chairman of the Board, Chief
Executive Officer and President
Robert L. Simmons 66 Director
Shaikh Isa Mohammed Isa Al 62 Director
Khaifa
Russell B. Adler (1) 39 Director
Mitchell Sandler 40 Director
Joel Brownstein 58 Director, Chief Financial Officer
(1) Mr. Adler was formerly the Chairman of the Company's Board of Directors.
The following is a brief summary of the background of each nominee for
Director and executive officer of the Company:
Mr. Salmonson has served as a member of the Company's Board of Directors
since October of 2000. Since 1993, Mr. Salmonson has enaged in a multi-faceted
career specializing in international business and finance, primarily operating
out of; The Peoples Republic of China; Jakarta, Indonesia; Manila Philippines;
and the Middle East (including Manama, Bahrain and Riyadh, Saudi Arabia). Mr.
Salmonson has extensive experience in matters concerning trade and project
finance, international negotiations, and Chinese and Indonesian currency
conversion efforts.
Since 1994 to the present, Mr. Salmonson has been employed as a financial
advisor to the ruling family of Bahrain Manama, Bahrain. From 1997 to the
present, Mr. Salmonson has served as a licensed mortgage broker with Circle
Mortgage Corporation, one of the largest privately held mortgage banking
companies in the State of Florida.
Mr. Salmonson filed for protection under the United States Bankruptcy
Code, in the Bankruptcy Court for the Southern District of Florida (Broward),
[Index No. 96-20435] on or about February 1, 1996, as a result of being a
named-defendant in a multi-party multi-jurisdiction international lawsuit
commenced by the government of Venezuela and/or its representatives in
connection with certain financing transactions involving the failed military
coup of President Carlos Avares Perez by General Chavez. Mr. Salmonson filed for
bankruptcy protection in order to mitigate the enormous legal expenses that he
was incurring and was projected to incur as the
<PAGE>
various litigations continued through extensive deposition and discovery. Mr.
Salmonson has always denied any wrongdoing and in connection with such law suit,
no judgment was ever obtained against Mr. Salmonson, and the lawsuit was
ultimately discontinued. Mr. Salmonson received a full discharge from Federal
bankruptcy court on May 26, 1998.
Mr. Simmons has served as a member of the Company's Board of Directors
since October 2000. Mr. Simmons has an extensive background in
telecommunications marketing and management. Mr. Simmons is the former
President of Sinclair Broadcast Group, Inc. In 1989, Mr. Simmons retired to
Florida where he has secured a part-time management position at WTTA, a local
television station located in Tampa, Florida. Since 1989 Mr. Simmons has
also invested in, and participated in the management of, various Florida real
estate development programs.
Shaikh Isa Mohammed Isa Al Khaifa is a member of the ruling family of
Bahrain. From 1988 to 1994, he served as the Bahrainian ambassador to Saudia
Arabia. Since 1994 until the present, Shaikh Isa Mohammed Isa Al Khaifa has
managed several companies engaged primarily in business management, financial
services and management consulting. Shaikh Isa Mohammed Isa Al Khaifa's
companies have operations in Bahrain and throughout the Middle East. He holds
degrees in petroleum and chemical engineering.
Russell B. Adler has served as a member of the Company's Board of
Directors since January 1999. From January, 1999 to October 13, 2000, he
served as the Chairman of the Board. From December 1996 to November 1998, Mr.
Adler served as consultant and counsel to Equity Management Partners, Inc.,
an investment banking firm. From January 1996 to August 1997, Mr. Adler
served as President of Strategic Holdings Corp., an investment banking firm.
From 1993 to December 1995, Mr. Adler was employed as vice president of
operations for The Silicon Group, Inc., a semiconductor and computer software
development company. Mr. Adler is a member in good standing of the Florida
Bar. He received a B.A. in Business and Sociology from William Penn College
in 1982 and a J.D. from Nova Southeastern University School of Law in 1986.
Mitchell Sandler has served as Vice President since April 1999 and served
as President from December 1998 until March 1999 and as director of the Company
since December, 1998. Between 1993 and December 1997, he served as President of
The Silicon Group, Inc., a semi-conductor and computer software development
company for multimedia. From 1984 and 1992, Mr. Sandler was employed by
All-American Semiconductor, a distributor of semi-conductors, first as salesman,
then as Regional Sales Manager for the Southeast (United States). Mr. Sandler
holds an Associate's degree from Santa Fe Community College and attended the
University of Florida.
Joel F. Brownstein has served as Chief Financial Officer of the Company
since April 1999. From February 1992 until the present, Mr. Brownstein served
as President of The Brownstein Group, an investment consulting firm for
public and private companies. Mr. Brownstein holds a B.A. from Adelphi
University, an M.B.A. in Finance and Investments from Baruch College and has
completed coursework for an M.B.A. in Marketing and Real Estate Law.
<PAGE>
Board Meetings and Board Committees
The Board of Directors did not hold any meetings during 1999.
The Board of Directors at present does not have an Audit Committee, a
Compensation Committee or a Nominating Committee.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Director Compensation
Directors do not receive cash compensation for services rendered as
directors. Board members are reimbursed for reasonable expenses incurred in
connection with attending meetings of the Board.
Executive Compensation
The following table sets forth, for the fiscal years ended December 31,
1999, the compensation earned for services rendered in all capacities by the
Companies chief executive officer and the other highest-paid executive officers
serving as such at the end of each fiscal year whose actual or annualized
compensation for that fiscal year was in excess of $100,000. The individuals
named in the table will be hereinafter referred to as the "Named Officers." No
other executive officer of the Company received compensation in excess of
$100,000 during fiscal year ended 1999. Other than as set forth below, no
executive officer who would otherwise have been included in this table on the
basis of 1999 salary and bonus resigned or terminated employment during the
year.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
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Restricte Long-Term All
Annual Compensation Stock Compensation Other
Award Awards Compensation
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Name and Fiscal Securities
Principal Year Other Annual Underlying
Position Ended Salary Bonus Compensation Options (#)
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<S> <C> <C> <C> <C> <C> <C> <C>
Russell Adler(1) 1999 $106,737(2) 0 0 $39,900 500,000(6) $0
Chairman of
Board of Directors
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Mitchell Sandler 1999 $14,957(3) 0 0 $19,950 150,000(6) $0
Vice President,
Secretary
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Lawrence Gallo 1999 $6,235(4) 0 0 $33,250 150,000(6) $25,000(7)
President
---------------------------------------------------------------------------------------------------------
Joel Brownstein 1999 $8,486(5) 0 0 $26,600 150,000(6) $22,657(8)
Chief Financial
Officer
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Effective October 17, 2000, Mr. Salmonson, in connection with the Triad
transaction, replaced Mr. Adler as Chairman of the Board of Directors.
(2) At December 31, 2000 Mr. Adler was owed cash compensation of $16,113. In
connection with the Triad transaction, and as a condition to such
transaction's closing, Mr. Adler and the Company entered into a Mutual
Release, dated as of September 22, 2000 (the "Adler Release"), whereby Mr.
Adler agreed to waive any and all rights or claims Mr. Adler had or may
have had against the Company. Under the Adler Release, the Company agreed
to release Mr. Adler of any and all rights or claims the Company had or
may have had against Mr. Adler.
(3) At December 31, 2000, Mr. Sandler was owed cash compensation of $97,543.
In connection with the Triad transaction, and as a condition to such
transaction's closing, Mr. Sandler and the Company entered into a letter
agreement, dated as of August 15, 2000 (the "Sandler Letter Agreement"),
whereby Mr. Sandler agreed to waive any and all rights or claims Mr.
Sandler had or may have had against the Company.
(4) At December 31, 2000, Mr. Gallo was owed cash compensation of $100,013. In
connection with the Triad transaction, and as a condition to such
transaction's closing, Mr. Gallo and the Company entered into a letter
agreement, dated as of August 15, 2000 (the "Gallo Letter Agreement"),
whereby Mr. Gallo agreed to waive any and all rights or claims Mr. Gallo
had or may have had against the Company.
(5) At December 31, 2000 Mr. Brownstein was owed cash compensation of $87,139.
In connection with the Triad transaction, and as a condition to such
transaction's closing, Mr. Brownstein and the Company entered into a
Mutual Release, dated as of September 22, 2000 (the "Brownstein Release"),
whereby Mr. Sandler agreed to waive any and all rights or claims Mr.
Brownstein had or may have had against the Company. Under the Brownstein
Release, the Company agreed to release Mr. Brownstein of any and all
rights or claims the Company had or may have had against Mr. Brownstein.
(6) Options were exercised in December 1999 and the Company received $237,500
of cash proceeds.
(7) Represents consulting fees paid to Mr. Gallo prior to his employment by
the Company.
(8) Represents $15,000 payable to Mr. Brownstein for assisting the Company in
raising capital, and $7657 of consulting fees of which $1,525 were paid
prior to his employment and $6,132 were paid after his employment.
<PAGE>
Options and Stock Appreciation Rights
The following table contains information concerning the grant of stock
options to the Named Officers during the 1999 fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
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Individual Grants
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Name Number of
Securities % of Underlying
Underlying Options Granted Exercise Expiration
Options to Employees in Price Date
Granted(#)(1) Fiscal Year ($/Share)(2)
--------------------------------------------------------------------------------
Russel Adler 500,000 50 $.25 12/04
--------------------------------------------------------------------------------
Mitchell Sandler 150,000 15 $.25 4/03
--------------------------------------------------------------------------------
Lawrence Gallo 150,000 15 $.25 4/01
--------------------------------------------------------------------------------
Joel Brownstein 150,000 15 $.25 4/01
--------------------------------------------------------------------------------
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(1) On October 3, 1997, the Company adopted its 1997 Stock Option Plan (the
"Plan") which authorizes the issuance of options to purchase a maximum
1,000,000 shares of Common Stock. On November 1, 1999 the Plan was amended
to authorize the issuance of options to purchase a maximum of 4,000,000
shares of Common Stock. The Board of Directors of the Company administers
the Plan including, without limitation, the selection of the persons who
will be granted Plan Options under the Plan, the type of Plan Options to
be granted, the number of shares subject to each Plan Option and the Plan
Option price.
The Plan authorizes the issuance of incentive stock options ("ISOs") as
defined in Section 422A of the Internal Revenue Code of 1986,
non-statutory options ("NSOs") and together with ISOS,("Options"). In
addition, the Plan also allows for the inclusion of a reload option
provision ("Reload Option"), which permits an eligible person to pay the
exercise price of the Plan Option with shares of Common Stock owned by the
eligible person and receive a new Plan Option to purchase shares of Common
Stock equal in number to the tendered shares.
Any ISOs granted under the Plan must provide for an exercise price of at
least 100% of the fair market value of the underlying shares on the date
of such grant, but the exercise price of any ISOs granted to an eligible
person owning more than 10% of the Company's Common Stock must be at least
110% of such fair market value as determined on the date of the grant. The
aggregate fair market value of the shares covered by the ISOs granted
under the Plan that become exercisable by a Plan participant for the first
time in any calendar year is subject to a $100,000 limitation. The
exercise price of each NSO is determined by the Board of Directors or a
committee thereof, in its discretion, provided that the exercise price of
an NSO is not less than fair value on the date of the grant. The Board of
Directors (or committee thereof), shall determine the term of all Options;
provided, however, that in no event may an ISO be exercisable more than 10
years after the date of its grant and, in the case of an ISO granted to an
eligible employee owning more than 10% of the Company's Common Stock, no
more than five years after the date of the grant. Any option which is
granted shall be vested and exercisable at such time as determined by the
Board of Directors or a committee thereof.
(2) The per share purchase price of shares subject to Plan Options granted
under the Plan may be adjusted in the event of certain changes in the
Company's capitalization, but any such adjustment shall not change the
total purchase price payable upon the exercise in full of Plan Options
granted under the Plan.
<PAGE>
Option Exercise and Holdings
The following table provides information with respect to the Named
Officers concerning the exercisability of options during fiscal year 1999 and
unexercisable options held as of the end of fiscal year 1999.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR ("FY")
AND FY-END OPTION VALUES
-------------------------------------------------------------------------------------------
Value of Unexercised
In-the-Money Options
at FY-End (Market
Shares No. of Securities price of shares at
Acquired on Value Underlying Unexercised FY-End less exercise
Name Exercise Realized(1) Options at FY-End (#) price) ($)(1)
---------------------------------------------
Exercisable Unexercisable
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Russel Adler 500,000 - 0 0 0
-------------------------------------------------------------------------------------------
Mitchell Sandler 150,000 - 0 0 0
-------------------------------------------------------------------------------------------
Lawrence Gallo 150,000 - 0 0 0
-------------------------------------------------------------------------------------------
Joel Brownstein 150,000 - 0 0 0
-------------------------------------------------------------------------------------------
</TABLE>
(1) From December 15, 1998 through June 30, 2000, the Company's Common Stock
was not publicly traded. All options set forth in the above table were
exercised during this time period, at an exercise price of $.25 per share
of Common Stock. The last reported sale price of the Company's Common
Stock on December 15, 1998 was $.06 per share. The last reported sale
price of the Company's Common Stock on June 30, 2000 was $.75 per share.
Employment and Consulting Contracts
On February 15, 1999, the Company entered into an employment agreement
with Mr. Adler, which provided for Mr. Adler's employment as Chairman of the
Board of Directors. This agreement provided for: (i) a base annual salary of
$140,400; (ii) the issuance of 300,000 shares of the Company's Common Stock; and
(iii) the grant of options to purchase 500,000 shares of the Company's Common
Stock at a purchase price of $.25 per share. This agreement also provided that
Mr. Adler would be entitled to additional compensation to be negotiated on a
case-by-case basis for those corporate finance transactions brought to the
Company by him. On October 15, 1999, the Company amended Mr. Adler's employment
agreement to include the issuance of an additional 300,000 common shares.
Pursuant to the Adler Release, Mr. Adler has waived any and all claims to future
compensation under his employment agreement.
On April 1, 1999, the Company entered into an employment agreement with
Mr. Sandler, which provided for Mr. Sandler's employment as Vice President and
Secretary. This agreement provided for a base annual salary of $135,000 to be
paid to Mr. Sandler commencing March 1, 1999, as well as the issuance of 150,000
shares of Common Stock and the grant of options to purchase 150,000 shares of
the Company's Common Stock at a purchase price of $.25 per share. In addition,
this agreement provided that Mr. Sandler be entitled to additional compensation
to be negotiated on a case- by-case basis for those corporate finance
transactions brought to the Company by him. On October 15, 1999, the Company
amended Mr. Sandler's employment agreement to include the issuance of an
additional 150,000 common shares. Pursuant to the
<PAGE>
Sandler Letter Agreement, Mr. Sandler has waived any and all claims to future
compensation under his employment agreement.
On April 18, 1999, the Company entered into an employment agreement with
Mr. Gallo, which provided for Mr. Gallo's employment as President of the
Company. This agreement provided for a base annual salary of $150,000, the
issuance of 250,000 shares of Common Stock of the Company, as well as the grant
of options to purchase 150,000 shares of Common Stock at a purchase price of
$.25 per share. On October 15, 1999, the Company amended Mr. Gallo's employment
agreement to include the issuance of an additional 250,000 common shares.
Pursuant to the Gallo Letter Agreement, Mr. Gallo has waived any and all claims
to future compensation under his employment agreement.
Also on April 18, 1999, the Company entered into an employment agreement
with Mr. Brownstein, which provided for Mr. Brownstein's employment as Chief
Financial Officer and Treasurer of the Company. This agreement provided for a
base annual salary of $135,000, the issuance of 200,000 shares of Common Stock
of the Company and the grant of options to purchase 150,000 shares of Common
Stock at a purchase price of $.25 per share. On October 15, 1999, the Company
amended Mr. Brownstein's employment agreement to include the issuance of an
additional 200,000 common shares. Pursuant to the Brownstein Release, Mr.
Brownstein has waived any and all claims to future compensation under his
employment agreement.
On April 1, 1999, the Company entered into an employment agreement with
Mr. Jelaso, which provide for Mr. Jelaso's employment as Director of Marketing
of the Company. This agreement provided for a base annual salary of $125,000 and
the grant of 100,000 shares of Common Stock. The term of this agreement was
three years. Mr. Jelaso resigned his position with the Company in October 1999,
and the Company has made no payments to the employee under the terms of the
contract since the date of his resignation and has retained the stock issuance.
Mr. Jelaso has alledged certain claims to future compensation in relation to his
employment agreement. The Company denies any liability to Mr. Jelaso.
The Company is currently negotiating an employment agreement with Mr.
Salmonson. Such agreement is expected to provide for an annualized salary of
$240,000, and will include as yet undetermined stock-based compensation and
customary change of control provisions.
Certain Transactions with Directors, Executive Officers and Certain Beneficial
Holders
Related Party Transactions
During the year ended December 31, 1999, the Company incurred an aggregate
of $47,657 of consulting fees and commissions payable to its former Chief
Executive Officer and President and its Chief Financial Officer and Treasurer,
of which $26,525 was incurred prior to their appointment as executive officers
of the Company and $21,132 was incurred after their appointment as executive
officers of the Company. The employment agreement for the Chief Financial
Officer and Treasurer provided for the payment of $15,000 of commissions for his
assistance in raising capital for the Company.
<PAGE>
During the year ended December 31, 1999, the Company received working
capital advances of $52,025 from Mel Adler, the father of Russell Adler, the
former Chairman of the Board, who, together with his wife and entities
controlled by such individuals, were major shareholders of the Company. During
1999, the Company repaid $48,166 of such advances. On December 29,1999, the
Company entered into a three year consulting agreement with the father of the
Chairman of the Board and an entity controlled by such individual (the
"Consultant"), to provide general business services to the Company in exchange
for an annual consulting fee of $75,000, payable in equal monthly installments
of $6,250, plus a car allowance of $750 per month. As additional consideration
for the agreement, the Company granted the Consultant 50,000 shares of the
Company's Common Stock, valued at $2,500, which amount is included in other
assets in the accompanying financial statements at December 31, 1999. In
addition, the Consultant received a two year option to purchase 50,000 shares of
the Company's Common Stock at an exercise price of $1.00 per share. The
agreement further provided that the Company would provide the Consultant with a
private office and office support services and would reimburse the Consultant
for all expenses incurred in connection with his activities on behalf of the
Company. In connection with the Triad transaction, and as a condition to such
transaction's closing, Mr. Adler and the Company entered into a Mutual Release,
dated as of September 28, 2000, whereby Mr. Adler agreed to waive any and all
rights or claims Mr. Adler may have had against the Company. Under the release,
the Company agreed to release Mr. Adler of any and all rights or claims the
Company had or may have had against Mr. Adler.
In January 2000, the Company purchased the URL address Music 411.com from
the father of the Chairman of the Board of Directors in exchange for 250,000
restricted shares of the Company's Common Stock which was valued at $12,500.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors and persons who are the beneficial owners of
more than 10% of the Common Stock to file initial reports of ownership and
reports of changes in ownership of the Common Stock with the Commission.
Officers, directors and beneficial owners of more than 10% of the Common Stock
are required by Commission regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Based on its review of the copies of such forms and certain written
representations furnished to it, the Company believes that, with respect to the
period from January 1 through December 31, 1999, no officer, director or persons
who are the beneficial owners of more than 10% of the Common Stock failed to
make a required filing under Section 16(a).
<PAGE>
Principal Shareholders
The following table sets forth as of October 20, 2000 certain information
relating to the ownership of the Common Stock (including the Series D Preferred
an as-converted basis) by (i) each person known by the Company to be the
beneficial owner of more than five percent of the outstanding shares of the
Common Stock, (ii) each of the Company's directors, (iii) each executive
officer, and (iv) all of the Company's executive officers and directors as a
group.
Name And Address Amount And Nature
Of Beneficial Owner Of Beneficial Ownership(1) Percent Of Class
---------------------- ----------------------- ----------------
Triad Petroleum, LLC 144,000,000 96%
1700 North Dixie Highway
Boca Raton, Florida 33432
Christopher R. Salmonson (2) 144,000,000 96%
1700 North Dixie Highway
Boca Raton, Florida 33432
Robert L. Simmons (3) 144,000,000 96%
1700 North Dixie Highway
Boca Raton, Florida 33432
Shaikh Isa Mohammed Isa Al 0 0%
Khaifa
Russell B. Adler 2,100,000 2%
Mitchell Sandler 793,801 *
Joel Brownstein 698,000 *
---------------
* Less than 1%.
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days upon the exercise of warrants or
options or the conversion of convertible securities. Each beneficial
owner's percentage ownership is determined by assuming that warrants or
options that are held by such person (but not those held by any other
person) and that are exercisable within 60 days have been exercised.
(2) Mr. Salmonson, by virtue of his status as an owner of a controlling
interest in Fuel America, LLC, a Florida Limited Liability Company which
owns 50% of the membership interest of Triad, may be deemed to share, with
Triad and Mr. Simmons, beneficial ownership of 94,000,000 shares of Common
Stock and 5,000,000 shares of Series D Preferred, (such Series D Preferred
converts into Common Stock at a ratio of 10 shares of Common Stock for
each share of Series D Preferred) constituting 96% of the Company's voting
equity.
(3) Mr. Simmons, by virtue of his status as the sole shareholder of Rapture
Holdings, Inc., a Florida corporation which owns the 50% of the membership
interests in Triad not held by Fuel America, Inc, may be deemed to share,
with Triad and Mr. Salmonson, beneficial ownership of 94,000,000 shares of
Common Stock and 5,000,000 shares of Series D Preferred, constituting 96%
of the Company's voting equity.
<PAGE>
The Consent Procedure
General
The Requested Action is submitted for shareholders approval by written
consent. No meeting of the shareholders will be held to vote on this matter.
Only shareholders of record as of October 20, 2000 are entitled to consent, to
withhold their consent, or to revoke their consent, to the Requested Action.
Holders of the Company's Common Stock are entitled to one consent for each
outstanding share of Common Stock held at the record date. Holders of the
Company's Series D Preferred Stock are entitled to ten consents for each
outstanding share of Series D Preferred held at the record date. As of the
record date there were [ ] issued and outstanding shares of Common Stock and
5,000,000 issued and outstanding shares of Series D Preferred.
Consents, once dated, signed, and delivered to the Company, will remain
effective unless and until revoked by written notice of revocation dated,
signed, and delivered to the Company at the address set forth below on or before
the time that the Company has received written consents from holders of a
majority of the outstanding shares of Common Stock.
Shareholders owning a majority of the outstanding voting equity as of the
record date have indicated their intent to deliver to the Company their written
consents approving the Requested Action. Those shareholders hold sufficient
shares of Common Stock and Series D Preferred stock to assure the approval of
the Requested Action regardless of whether consents are received from any other
shareholders.
The Requested Action will be approved at such time as the Company holds
unrevoked written consents of shareholders approving the Requested Action
representing a majority of the outstanding voting equity at the record date.
Consequently, abstentions and broker non-votes would have the effect of a vote
against approval of the Amendment.
Shareholders are requested to indicate approval of the Capital Stock
Amendment and the Election of Directors by signing and dating the Consent Card,
checking the box on the Consent Card which corresponds to the approval thereof,
and delivering the Consent Card to the Company at the address set forth below.
Withholding of consent to the Requested Action, or abstention with respect to
the approval of the each, may be indicated by signing and dating the Consent
Card, checking the box which corresponds to withholding of consent or abstention
with respect to the approval of a given item and delivering the Consent Card to
the Company at the address set forth below.
A Consent Card which has been signed, dated and delivered to the Company
without any of the boxes for approval, withholding of consent, or abstention
checked will constitute a consent to the Request Action.
<PAGE>
Consent Cards may be delivered to the Company at the following address:
1700 North Dixie Highway
Boca Raton, Florida 33432
Consent Cards should be delivered to the Company as soon as possible. An
addressed return envelope is enclosed for this purpose, which requires no
postage if mailed in the United States. Consent Cards and revocations of
consents will be deemed to have been received by the Company upon actual
delivery at the above address.
Absence of Appraisal Rights
Shareholders who abstain from consenting with respect to the Requested
Action, or who withhold consent to the Requested Action, do not have the right
to an appraisal of their shares of Common Stock or any similar dissenters'
rights under applicable law.
Expense of Consent Solicitation
The Company will bear the entire cost of the solicitation of shareholders,
if any, approval of the amendment, including the preparation, assembly, printing
and mailing of this consent statement and any additional material furnished to
shareholders. In addition, the Company may reimburse certain persons for their
costs of forwarding the solicitation material to shareholders. The Company does
not anticipate that it will be necessary to supplement its solicitation of
consents by mail with telephone, telegram or personal solicitation of consents
by directors, officers or employees of the Company. However, if such persons are
called upon to solicit consents on behalf of the Company, no additional
compensation will be paid for any of such services.
<PAGE>
Additional Information
The Company files reports and other information with the Securities and
Exchange Commission. Copies of these documents may be obtained at the SEC's
public reference rooms in Washington, D.C., New York, New York, and Chicago,
Illinois. The Company's SEC filings are also available from commercial document
retrieval services or on the SEC's web site at http://www.sec.gov. Shareholders
may also request a copy of the Company's financial reports filed with the SEC by
contacting the Company's Secretary at c/o FuelNation Inc., 1700 North Dixie
Highway, Boca Raton, Florida 33432, Attention: Secretary, telephone number
1-561-391-5883.
<PAGE>
By Order of the Board of Directors
Christopher R. Salmonson
Chairman of the Board, President and
Chief Executive Officer
[ ], 2000
Boca Raton, Florida
<PAGE>
IMPORTANT
PLEASE COMPLETE, SIGN AND DATE
YOUR WRITTEN CONSENT PROMPTLY
AND RETURN IT IN THE ENCLOSED ENVELOPE
WRITTEN CONSENT OF SHAREHOLDERS
[ ]
THIS CONSENT IS SOLICITED BY THE BOARD OF DIRECTORS. WHEN PROPERLY
EXECUTED, THIS CONSENT WILL BE VOTED AS DESIGNATED BY THE UNDERSIGNED ON THE
REVERSE SIDE. IF THIS CONSENT IS SIGNED, DATED, AND DELIVERED TO FUELNATION INC.
WITH NO DESIGNATION BY THE UNDERSIGNED ON THE REVERSE SIDE, THIS CONSENT WILL
CONSTITUTE THE SHAREHOLDERS' CONSENT TO AND APPROVAL OF THE AMENDMENT.
PLEASE SIGN NAMES EXACTLY AS PRINTED HEREON. EXECUTORS, ADMINISTRATORS,
TRUSTEES, GUARDIANS, AND ATTORNEYS SHOULD GIVE FULL TITLE AS SUCH. WHEN
SHARES ARE HELD JOINTLY, ALL SHOULD SIGN. IF THE SIGNER IS A CORPORATION,
SIGN FULL CORPORATE NAME BY DULY AUTHORIZED OFFICER. IF THE SIGNER IS A
PARTNERSHIP, SIGN IN THE NAME OF THE PARTNERSHIP BY AN AUTHORIZED PERSON. IF
SHARES ARE HELD IN MORE THAN ONE CAPACITY, THIS CONSENT SHALL BE DEEMED VALID
FOR ALL SHARES HELD IN ALL CAPACITIES.
---------- ----------
SEE REVERSE SEE REVERSE
SIDE SIDE
---------- ----------
(TO BE SIGNED AND DATED ON THE REVERSE SIDE)
<PAGE>
[X] PLEASE MARK AS IN THIS SAMPLE.
1. Amendment to the first paragraph of ARTICLE THIRD of the Articles of
Incorporation of FuelNation Inc. as set forth under the heading "Capital
Stock Amendment" in the Consent Solicitation Statement dated [ ], 2000.
MARK ONLY ONE OF THE FOLLOWING THREE BOXES:
[ ] FOR [ ] WITHHOLD [ ] ABSTAIN
2. Election of Directors, as set forth under heading "Election of
Directors" in the Consent Solicitation Statement dated [ ], 2000.
Christopher R. Salmonson
Robert L. Simmons
Shaikh Isa Mohammed Isa Al Khaifa
MARK ONLY ONE OF THE FOLLOWING THREE BOXES:
[ ] FOR [ ] WITHHOLD [ ] ABSTAIN
To withhold voting as to any given director, line through, or otherwise
strikeout, the name above.
(Please sign and date below)
Dated:_________________, 2000
------------------------
Signature of Shareholders(s)
------------------------
Signature of Shareholders(s)
If signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such, and, if signing for a corporation, give your
title. When shares are in the names of more than
one person, each should sign.
