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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Proxy Statement Pursuant To Section 14(a)
Of The Securities Exchange Act Of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, Use of the Commission Only (as permitted by Rule
14a-6(e)(2))Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
Sundog Technologies, Inc.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 16, 2000
Sundog Technologies, Inc.
To the Shareholders of
Sundog Technologies, Inc.:
You are cordially invited to attend the Annual Meeting of Shareholders
of Sundog Technologies, Inc. (the "Company"), which will be held on Thursday,
November 16, 2000, at 10 a.m., at the Marriott Courtyard located at 10701 South
Holiday Park Drive, Sandy, Utah (the "Annual Meeting"), for the following
purposes, which are more fully described in the Proxy Statement accompanying
this Notice:
(i) To elect three members of the Board of Directors of the
Company, each to serve until the next Annual Meeting of
Shareholders and until their respective successors have been
duly elected and qualified;
(ii) To consider and vote upon a proposal to amend the Company's
Certificate of Incorporation in order to effect a 2 to 1
reverse stock split with respect to outstanding shares of our
common stock;
(iii) To consider and vote upon a proposal to ratify the appointment
of Mantyla McReynolds, a Professional Corporation, as
independent auditors of the Company for the fiscal year ending
March 31, 2001; and
(iv) To transact such other business as may properly come before
the Annual Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on October 16,
2000 as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting and at any adjournment or
postponement thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, to ensure your representation at the Annual Meeting, you are
urged to vote, sign, date, and return the enclosed Proxy as promptly as possible
in the enclosed postage-prepaid envelope. Shareholders attending the Annual
Meeting may vote in person even if they have returned a Proxy.
BY ORDER OF THE BOARD OF DIRECTORS
By: /s/ Alan Rudd
-----------------
Alan Rudd, President
Dated: October 16, 2000
IMPORTANT
Whether or not you expect to attend the Annual Meeting in person, to
assure that your shares will be represented, please complete, date, sign and
return the enclosed proxy without delay in the enclosed envelope, which requires
no additional postage if mailed in the United States. Your proxy will not be
used if you are present at the Annual Meeting and desire to vote your shares
personally.
<PAGE>
Sundog Technologies, Inc.
10542 South Jordan Gateway
Suite 200
South Jordan, Utah 84005
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PROXY STATEMENT
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For Annual Meeting of Shareholders
November 16, 2000
SOLICITATION OF PROXIES
This Proxy Statement is being furnished to the shareholders of Sundog
Technologies, Inc., a Delaware corporation ("Sundog" or the "Company"), in
connection with the solicitation by the Board of Directors of the Company (the
"Board of Directors") of proxies from holders of outstanding shares of the
Company's common stock, par value $.001 per share (the "Common Stock"), for use
at the Annual Meeting of Shareholders of the Company to be held Thursday,
November 16, 2000, and at any adjournment or postponement thereof (the "Annual
Meeting"). This Proxy Statement, the Notice of Annual Meeting of Shareholders
and the accompanying form of proxy are first being mailed to shareholders of the
Company on or about October 18, 2000.
The Company will bear all costs and expenses relating to the
solicitation of proxies, including the costs of preparing, printing and mailing
to shareholders this Proxy Statement and accompanying materials. In addition to
the solicitation of proxies by mail, the directors, officers and employees of
the Company, without receiving additional compensation therefor, may solicit
proxies personally or by telephone, facsimile transmission, e-mail or web
posting. Arrangements will be made with brokerage firms and other custodians,
nominees and fiduciaries representing beneficial owners of shares of the Common
Stock for the forwarding of solicitation materials to such beneficial owners,
and the Company will reimburse such brokerage firms, custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred by them in doing so.
VOTING
Record Date
The Board of Directors has fixed the close of business on October 16,
2000 as the record date for determination of shareholders entitled to notice of
and to vote at the Annual Meeting (the "Record Date"). As of the Record Date,
there were issued and outstanding 23,929,745 shares of Common Stock. The holders
of record of the shares of Common Stock on the Record Date are entitled to cast
one vote per share on each matter submitted to a vote at the Annual Meeting.
Accordingly, 23,929,745 votes are entitled to be cast on each matter submitted
to a vote at the Annual Meeting
1
<PAGE>
Proxies
Shares of Common Stock which are entitled to be voted at the Annual
Meeting and which are represented by properly executed proxies will be voted in
accordance with the instructions indicated on such proxies. If no instructions
are indicated, such shares will be voted (i) FOR the election of each of the
three director nominees; (ii) FOR the approval of the amendment to our
Certificate of Incorporation effecting the proposed 2 to 1 reverse stock split;
(iii) FOR the ratification of the appointment by the Board of Directors of
Mantyla McReynolds to be the independent auditors of the Company for the fiscal
year ending March 31, 2001; and (iv) in the discretion of the proxy holders as
to any other matters which may properly come before the Annual Meeting.
A shareholder who has executed and returned a proxy may revoke it at
any time prior to its exercise at the Annual Meeting by executing and returning
a proxy bearing a later date, by filing with the Secretary of the Company, at
the address set forth above, a written notice of revocation bearing a later date
than the proxy being revoked, or by voting the Common Stock covered thereby in
person at the Annual Meeting.
Quorum and Required Vote
A majority of the outstanding shares of Common Stock entitled to vote,
represented in person or by properly executed proxy, is required for a quorum at
the Annual Meeting. Abstentions and broker non-votes, which are indications by a
broker that it does not have discretionary authority to vote on a particular
matter, will be counted as "represented" for the purpose of determining the
presence or absence of a quorum.
In the election of directors, the three nominees receiving the highest
number of votes will be elected. The Company does not have cumulative voting for
directors. Accordingly, abstentions and broker non-votes will not have the
effect of being considered as votes cast against any matter considered at the
Annual Meeting.
The proposed amendment to the Company's Certificate of Incorporation
effecting the 2 to 1 reverse stock split, will be approved, in accordance with
Delaware law, if the a majority of the outstanding shares of Common Stock are
cast in favor of the matter. As a result, abstentions and broker non-votes will
be the equivalent of votes against such proposed amendment.
The ratification of selection of an independent auditor and any other
matter presented for approval by the shareholders generally will be approved, in
accordance with Delaware law, if the votes cast in favor of the matter exceed
the votes opposing such matter. As a result, abstentions and broker non-votes
will not affect the outcome of any such matter.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Nominees for Election as Directors
At the Annual Meeting, three directors of the Company constituting the
entire Board of Directors are to be elected to serve until the next annual
meeting of shareholders and until their successors shall be duly elected and
qualified. If any of the nominees should be unavailable to serve, which is not
now anticipated, the proxies solicited hereby will be voted for such other
persons as shall be designated by the present Board of Directors. The three
nominees receiving the highest number of votes at the Annual Meeting will be
elected. Certain information with respect to each nominee for director is set
forth below.
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<PAGE>
<TABLE>
<CAPTION>
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Name Age Position Director Since
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alan Rudd 48 CEO, President and Chairman of the Board January 2000
John Zollinger 32 CTO, Vice President of Engineering October 1997
Bryan T. Allen 33 Outside director August 2000
</TABLE>
The following paragraphs set forth information about each nominee for
election as directors.
ALAN RUDD, 48 , joined Sundog as Chairman & Chief Executive Officer on
January 1, 2000. Rudd brings more than 20 years experience in the computer
industry to Sundog. From March 1996 to November 16999 Rudd was the CEO of Vinca
Corporation, a Utah-based company that provided continuous availability software
for Microsoft-, Novell- and IBM-distributed network platforms. Under Rudd's
leadership, Vinca became a recognized worldwide leader in high availability
solutions. Vinca was acquired by Legato Systems of Palo Alto, California
(NASDAQ: LGTO) on July 31, 1999. In addition to his role as Chairman and CEO of
Sundog, Rudd serves on the Board of Directors of Envision Development
Corporation (AMEX: EDV), a leader in innovative ebusiness solutions. Sundog is
the owner of approximately 19.9% of the outstanding stock of Envision.
Rudd has a keen understanding of how to build a company from the
beginning stages to a driving market force. In addition to building Vinca
Corporation into a market leader, Rudd spent ten years in senior management
positions at Novell where he helped to grow Novell into the worldwide leader in
network computing. His positions at Novell included Legal Counsel, Regional
Manager, Area Director and Vice President of OEM Operations.
Rudd has a bachelor's degree in Business Administration and Finance and
a juris doctorate from Brigham Young University. Following law school, he spent
seven years as in-house legal counsel for several corporations including State
Farm Insurance and Prime Computer before joining Novell and moving into
corporate management.
JOHN ZOLLINGER, 32, has been a director and Vice President of
Engineering at Sundog since October of 1997. Zollinger has been involved in
nearly all aspects of the software engineering industry during the past eleven
years. His industry experience spans enterprise development from
warehousing/processing, telecommunications, banking, oil and gas, insurance, and
commodity trading systems. In addition to his skills in analyzing, designing and
implementing mission critical software systems, Zollinger has a proven ability
to manage and bring together diverse groups of engineers to achieve complex
software project goals.
While working with Moore Business Communications Services from 1986 to
1994, Zollinger led the engineering team that designed and implemented a
large-scale order fulfillment and management system for the telecommunications
industry. This system enabled AT&T to launch a new successful business unit and
has since been used by other large telecommunication companies such as Sprint,
MCI and GTE. As an independent engineering consultant for Palo Alto-based Filoli
from 1994 to 1996, Zollinger helped guide the development of a highly
distributed claims handling system for Industrial Indemnity. Zollinger brought
to this project extensive experience in the development of advanced data
migration and data distribution systems. Zollinger also assisted EOTT Energy
Partners in establishing standard practices for object-oriented analysis,
design, and implementation of an enterprise-wide oil and gas trading system.
BRYAN ALLEN, 33, is outside counsel to Sundog and has served as
director of Sundog since August 2000. Allen is of counsel at the law firm of
Stoel Rives, L.P. in Salt Lake City, Utah, where he advises clients on
corporate, securities, acquisition and other business matters. Allen received
bachelors degrees, summa cum laude, from the University of Utah in Economics and
Chinese Studies, received a masters degree in religion, cum laude, from the Yale
Divinity School, and received his Juris Doctorate from Yale Law School.
3
<PAGE>
Meetings and Committees
During the fiscal year ended March 31, 2000, our Board of Directors met
5 times. All incumbent directors attended at least 75% of all board meetings and
applicable committee meetings.
The Company does not presently have a standing audit committee,
nominating committee or compensation committee, but intends to select an audit
committee during the coming fiscal year.
Director Compensation.
Currently, non-employee directors are not compensated. The Company may
provide stock options or other compensation to directors and officers in order
to align the interests of these key personnel with the overall interests of the
Company.
EXECUTIVE OFFICERS AND KEY EMPLOYEES
In addition to Messrs. Rudd and Zollinger, whose biographies are set
forth above, certain biographical information is furnished below with respect to
the following executive officers and key employees of the Company and its
subsidiaries:
STEPHEN L. RUSSO, 42, has been the Vice President of Operations and the
Chief Financial Officer of Sundog since February of 2000. He is a CPA, and his
education and experience in accounting and operations span more than 19 years
and include expertise in financial system design and implementation with
significant experience in SEC disclosure and compliance. From October of 1992 to
October of 1997, Russo served as vice president of operations and CFO of Vinca
Corporation where he was instrumental in growing the company to the worldwide
leader in high availability solutions. Russo was one of the key negotiators in
the sale of Vinca Corporation to Legato Systems, Palo Alto, California on July
31, 1999. From September of 1989 to October of 1992, Russo served as president
of Merisoft, a high-tech voice recognition company, where he was also
instrumental in growing the company and selling it for a substantial profit.
Russo is a graduate of Brigham Young University with a degree in Accounting.
In his position as Vice President of Operations, Russo is responsible
for maintaining strong profitability for Sundog by maintaining good profit
margins, budgeting and strategic fiscal management. He is also part of the team
deciding how to effectively position the Company for future profitability and
taking responsibility for growing the Company through acquisition of companies
and technologies that fit the mission and objectives of the Company. He is a key
part of implementing electronic tools and programs that are an integral part of
growing the business through technology. He and part of his team are responsible
to constantly look for new tools to make the Company more efficient and more
profitable by serving the customer better.
ART DEARING, 41, has been the Vice President of Worldwide Business
Development for Sundog since February of 2000. Dearing has been instrumental in
developing relationships with a number of key business partners in strategic
markets such as mobile computing. Dearing brings more than seventeen years of
experience in high technology, including the ownership of two successful
computer businesses offering complete system design and consulting services. He
was the principal architect of a POS system that is still being used today by a
major retail grocery chain. Prior to commencing work at Sundog, Dearing was
Director of Strategic Relations for Vinca Corporation from December of 1993 to
January of 2000, where he demonstrated the ability to more than double revenue
through an OEM and marketing relationship with IBM. Through the IBM partnership
he was the key player in multi-million dollar sales to both the Bank of Brazil
and Wal-Mart. Dearing has extensive experience in setting product strategy with
his broad range of technical expertise. He spent approximately two years, from
January of 1992 to November of 1993, at DEC in Technical Consulting where he was
responsible for supporting sales in the design and implementation of systems for
large enterprise customers. While at DEC Art was largely responsible for a
multi-million dollar deal with Micron for the technical support of PC LANs in
eight states. Art has a BS in Engineering from San Diego State University.
4
<PAGE>
JEFFREY L. SWAIN, 41, has been Vice President of Strategic Relations
for Sundog since February of 2000. His role includes the development of a
two-tier distribution channel as well as the development of OEM partners with
the intent of proliferating Sundog's technologies into hot markets such as
mobile computing and Web content update. Swain brings more than twelve years of
sales experience in the network computing industry having served as Director of
Channel Sales for Legato Systems, Inc., a leader in enterprise storage
management, from January 1999 to February 2000. While at Legato, Jeff increased
channel sales over 40% in less than six months. He managed the inside sales team
and in one sales promotion his team increased software maintenance sales by
400%. Swain has shown an in-depth knowledge of selling through a channel and has
developed strong and sustained relationships with the key channel partners in
this industry. Prior to working at Legato, he was a Major Market Account Manager
for Informix in the Southeastern region from April 1996 to December 1997. He
proved his ability to sell to large complex companies such as Walt Disney World,
W.R. Grace and the State of Florida. Swain also sold a site license to twelve
counties in Florida to be used for statewide electronic ticketing. Jeff
developed particular expertise in selling to state and local government entities
as State and Local Government Sales Manager for Novell from July 1994 to April
1996. He and his team sold a master site license agreement to seventeen of the
twenty top states in the United States, plus multi-million dollar site licenses
to the EPA and US Courts. Swain attended Brigham Young University with an
emphasis in Business Management and Psychology.
SUSAN RICHARDS, 52, joined Sundog in April of 2000, bringing with her
more than fifteen years of experience in the network computing industry in all
facets of marketing communications. She has been instrumental in building
company and brand recognition for both large and small companies through public
relations, advertising, events and other marketing programs.
Prior to joining Sundog, Richards directed all marketing communications
for Vinca Corporation, the worldwide leader in high availability solutions from
April of 1993 to April of 1999. At Legato Systems, Inc., from August 1999 to
March of 2000, Susan directed all public relations worldwide. Richards held
several key positions at Novell in Corporate Communications and Marketing
Communications for Service and Education from June of 1986 to April of 1993 and
she was also a senior associate with Network Associates handling public
relations activities for numerous clients including Novell and WordPerfect.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides certain summary information concerning the
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer, as well as all other executive officers of the Company
whose aggregate compensation for the fiscal year ended March 31, 2000 exceeded
$100,000 (collectively, the "Named Executive Officers"). Stephen Russell was the
Chief Executive Officer of Sundog until August 1, 1999. Carl Steffens was the
interim Chief Executive Officer of Sundog from August 1, 1999 until November of
1999. Upon his resignation, Mr. Rudd was appointed to serve as Chief Executive
Officer.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Awards Payouts
Other
Annual Restricted Securities All Other
Salary Bonus Compensa- Stock Underlying LTIP Pay- Compensation
Name and Principal Position Year ($) ($) tion($) Award(s)($) Options outs ($) ($)
--------------------------- ---- ------ ---- -------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alan Rudd, CEO, President 2000 56,250 -- -- -- -- -- --
(from Jan. 1, 2000 to 1999 -- -- -- -- ** -- --
present) 1998 -- -- -- -- -- -- --
Carl Steffens, interim CEO 2000 60,000 -- -- -- -- -- --
(from August 1, 1999 to 1999 -- -- -- -- -- -- --
December 15, 1999) 1998 -- -- -- -- 250,000 -- --
Stephen Russell CEO, 2000 41,583 -- -- -- -- -- --
President (from April 1, 1999 95,000 -- -- -- -- -- --
1999 to August 1, 1999 1998 46,667 -- -- 1,540,000* -- -- --
</TABLE>
5
<PAGE>
* In October,1997, Arkona, LLC was consolidated with The Thorsden Group Ltd. to
form Sundog. In such transaction the founders of Arkona, LLC were issued a
substantial number of shares of Common Stock of Sundog. Mr. Russell received
1,540,000 shares of Common Stock in such transaction.
** Does not include options to purchase Common Stock granted to Mr. Rudd by
Caldera Holding Company, L.C. See "Certain Relationships And Related
Transactions."
Option Grants in Last Fiscal Year
The following table sets forth-individual grants of options to acquire
shares of Common Stock made by the Company to the Named Executive Officers
during the fiscal year ended March 31, 2000.
<TABLE>
<CAPTION>
Percent of Total
Options Granted to
Employees in Fiscal
Name Options Granted Year Exercise Price Expiration Date
--------------- --------------- ------------------- -------------- ---------------
<S> <C> <C> <C> <C>
Alan Rudd --* -- Nil Nil
Carl Steffens 250,000 17.5% $.30 09/30/2002
Stephen Russell -- -- Nil Nil
</TABLE>
* Does not include options to purchase Common Stock granted to Mr. Rudd by
Caldera Holding Company, L.C. See "Certain Relationships And Related
Transactions."
Aggregated Option Exercises in Last Fiscal Year and Year End Option Values
The following table sets forth the aggregate value of unexercised
options to acquire shares of Common Stock granted by the Company and held by the
Named Executive Officers on March 31, 2000 and the value realized upon the
exercise of options during the fiscal year ended March 31, 2000. Our Common
Stock is not listed on an exchange or other quotations service, and accordingly,
the Company cannot accurately determine the fair market value of a share of
Common Stock as of the end of its most recent fiscal year. For purposes of the
following table, we have assumed that the fair market value of a share of Common
Stock on March 31, 2000, the last day of our most recent fiscal year, was $1.00.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at FY End In-the-Money Options at FY
Shares Acquired Value Realized 2000(1) End 2000 ($)(2)
Name on Exercise ($) Exercisable/Unexercisable Exercisable/Unexercisable
--------------- --------------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Alan Rudd -- -- Nil Nil*
Carl Steffens -- -- 250,000 $175,000
Stephen Russell -- -- Nil Nil
</TABLE>
6
<PAGE>
* Does not include options to purchase Common Stock granted to Mr. Rudd
by Caldera Holding Company, L.C. See "Certain Relationships And Related
Transactions."
(1) Includes shares of Common Stock subject to options exercisable within
60 days of March 31, 2000.
(2) Calculated based on the difference between the exercise price and the
price of a share of Common Stock on March 31, 2000. Our Common Stock is
not listed on an exchange or other quotations service, and accordingly,
the Company cannot accurately determine the fair market value of a
share of Common Stock as of the end of its most recent fiscal year. For
purposes of the following table, we have assumed that the fair market
value of a share of Common Stock on March 31, 2000, the last day of our
most recent fiscal year, was $1.00.
Employment Agreements and Change of Control Arrangements
The Company has not entered into any employment agreements or change of
control agreements with its named executive officers.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain founding shareholders, specifically, Marty Alfred, Bruce Baird,
Jeffrey Barlow, John Blumenthal, Tim Kapp, Stephen Russell, Dave Valenti, Gary
Wright, and John Zollinger obtained Common Stock in return for contributions and
development of Sundog's predecessor, Arkona, L.L.C., which was subsequently
merged into The Thorsden Group Ltd., and renamed Sundog Technologies, Inc. These
founding shareholders received a total of 14,000,000 shares of Common Stock and
then collectively entered into an agreement with Caldera Holding Company, L.C.,
wherein Caldera was given the right to grant derivative options to third parties
with respect to 7,523,000 of such shares in order to encourage the development
and increased productivity of Sundog. Holders of the shares underlying the
derivative options are entitled to dividends and distributions with respect to
such shares until the options are exercised. However, Caldera has been granted
dispositive voting power with respect to all shares subject to its agreement
with the founding shareholders so long as the agreement remains in place. The
agreement expires upon Caldera's award of the last of the derivative options or
at the end of three years, whichever occurs first, at which time voting power
returns to the founding shareholders. As an inducement to the new management
team of Sundog to join the Company, Caldera has granted the following officers
the number of derivative options following each of their names: Alan Rudd
(2,000,000), Steve Russo (150,000), Jeff Swain (100,000), and Art Dearing
(100,000).
Bryan Allen, nominee for director, was formerly a partner at the law
firm of Parr Waddoups Brown Gee & Loveless and recently became of counsel with
the law firm of Stoel Rives, L.P. Mr. Allen provides legal services to Sundog
when, if and as requested Sundog. During the first eight months of the 2000
calendar year, Parr Waddoups Brown Gee & Loveless billed Sundog for $26,192 in
legal services and Stoel Rives billed Sundog for $0.00 in legal services.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal Holders
The following table sets forth information as of September 15, 2000
with respect to the beneficial ownership of shares of the Common Stock by each
person known by the Company to be the beneficial owner of more than 5% of the
Common Stock, by each director or nominee, by each of the Named Executive
Officers and by all directors and officers as a group. Unless otherwise noted,
each person named has sole voting and investment power with respect to the
shares indicated.
<TABLE>
<CAPTION>
Beneficial Ownership as of
September 15, 2000(1)
Name and Address of Beneficial Owner Number of Shares Percentage of Class(2)
--------------------------------------------------------- ---------------- ----------------------
<S> <C> <C>
Directors and Named Executive Officers
Alan Rudd (CEO, President, Director)
6769 Walker Mill Dr.
Salt Lake City, UT 84124 1,500,000(3) 5.9%
John Zollinger (CTO, V.P. of Engineer, Director)
11008 Shelwood Circle
South Jordan, UT 84095 1,050,000 4.39%
Bryan Allen (Director)
2172 East Kensington Avenue
Salt Lake City, UT 84093 -0- *
Carl Steffens (Interim CEO Aug. - Nov. 1999)
1530 Tiptoe Lane
Los Altos, CA 94024 250,000(4) *
Stephen Russell (CEO Apr. - Aug. 1999)
134 Montelena Court
Mountain View, CA 94040 550,000 2.30%
Principal Holders of Common Stock
Caldera Holdings LLC
36 South State St.
Suite 2000
Salt Lake City, UT 84111 7,523,000(5) 31.438%
John Blumenthal
4432 Emigration Canyon
Salt Lake City, UT 84108 2,156,000 9.010%
All officers and directors as a group (8 persons) 3,350,000(6) 12.59%
</TABLE>
* Less than one percent
----------------------------
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<PAGE>
(1) Beneficial ownership as a percentage of the class for each person holding
options, warrants or other rights exercisable within 60 days of September 15,
2000 has been calculated as though shares of Common Stock subject to such
options were outstanding, but such shares have not been deemed outstanding for
the purpose of calculating the percentage of the class owned by any other
person.
(2) The percentage indicated represents the number of shares of Common Stock,
warrants and options exercisable within 60 days of September 15, 2000 held by
the indicated shareholder divided by the sum of (a) the number of shares subject
to options exercisable by such shareholder within 60 days and (b) 23,929,745,
which is the number of shares of Common Stock issued and outstanding as of
September 15, 2000.
(3) Includes 1,500,000 options to purchase Common Stock exercisable within 60
days of September 15, 2000 granted to Mr. Rudd by Caldera Holding Company, L.C.
covering shares owned by certain founding shareholders of the Company. See
"Certain Relationships And Related Transactions." Such 1,500,000 shares are also
included in the shares beneficially owned by Caldera because, until the option
is exercised or Caldera's agreement with the founding shareholders expires,
Caldera retains dispositive power and voting power with respect to such shares.
(4) Includes 250,000 options to purchase Common Stock exercisable within 60
days of September 15, 2000.
(5) Caldera became beneficial owner of such shares pursuant to an agreement
with certain founding shareholders of the Company described in this Proxy
Statement under the heading "Certain Relationships And Related Transactions."
Although Caldera does not have the right to receive any dividends or financial
benefits associated with such shares, Caldera is considered the beneficial owner
of the shares subject to its agreement with the founding shareholders because it
has dispositive power and voting power with respect thereto.
(6) Includes 1,750,000 options to purchase Common Stock exercisable within 60
days of September 15, 2000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, as well as persons who beneficially
own more than ten percent of the Common Stock, to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission ("SEC"). Reporting persons are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file. Based solely on a
review of the copies of such forms furnished to the Company and written
representations from the Company's executive officers and directors, the Company
believes that no forms other than the following were delinquent or were not
filed during the most recent fiscal year or prior years (to the extent not
previously disclosed): Arthur Dearing's Form 3 was due on February 24, 2000,
Susan Richards' Form 3 was due on April 11, 2000, Alan Rudd's Form 3 was due on
November 166, 1999, Jeff Swain's Form 3 was due on February 24, 2000, and
Stephen Russo's Form 3 was due on February 11, 2000. A Form 3 with respect to
each of these individuals was filed on June 19, 2000.
PROPOSAL NO. 2 - AMENDMENT OF CERTIFICATE OF INCORPORATION TO DECREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board has proposed to amend the Certificate of Incorporation of the
Company for the purpose of effecting a 2 to 1 reverse stock split with respect
to outstanding shares of Common Stock. A copy of the proposed Certificate of
Amendment of Certificate of Incorporation (the "Amendment") that we intend to
use to effect the reverse stock split, if the reverse stock split is approved by
shareholders, is attached hereto as Appendix A. If the Amendment is approved at
the Shareholder's meeting, the Company intends to promptly sign the Amendment
and send it to the Delaware Secretary of State for filing. The Amendment will be
effective on December 15, 2000, which is the record date for the 2 to 1 reverse
stock split.
Purpose of Proposed Reverse Stock Split
The purpose of the proposed 2 to 1 reverse stock split is to decrease
the number of outstanding shares of Common Stock and shares subject to
outstanding options and warrants in order to increase the market value of each
share of the Common Stock. We believe that the number of shares of Common Stock
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presently outstanding or subject to outstanding purchase rights is high enough
that it may have the effect of deterring future investment in the Company. In
addition, management and the Board would like for the Common Stock to qualify
for listing on the Nasdaq SmallCap Market or other exchange in the near future.
Although the Common Stock is not traded on an exchange or quoted on the Nasdaq
OTC Bulletin Board, management believes that the price investors are willing to
pay for a share of Common Stock is, or would be, below the minimum bid price for
initial listing on the Nasdaq SmallCap Market (which is $4 per share). We
believe that the key to increasing the price investors are willing to pay for a
share of Common Stock and investor interest in the Company is to increase the
Company's product offerings and revenues; however, we believe that reducing by
1/2 the number of shares of Common Stock will immediately increase the price
investors are willing to pay for a share of Common Stock and help us reach our
goal of increasing the price investors are willing to pay for a share of Common
Stock to over $4 per share.
In addition to the minimum bid price requirements, additional
requirements exist for listing on the Nasdaq SmallCap Market. The following
table sets forth information regarding the listing requirements for the Nasdaq
SmallCap Market and the Company's present compliance (or estimated compliance)
with such:
<TABLE>
<CAPTION>
Listing Requirements: Company's Current Status Regarding Requirement:
-------------------- ----------------------------------------------
<S> <C>
Net Tangible Assets of $4 million; Currently satisfied.
Market Capitalization of $50 million; or
Net Income of $750,000 in last fiscal year:
Public Float of 1 million shares: Currently satisfied.
Market Value of Public Float of $5,000,000: Unknown due to lack of trading history; probably not
satisfied, but would be satisfied if minimum bid price
was at least $4.00.
Minimum Bid Price of $4.00: Unknown due to lack of trading history; probably not
satisfied.
Three Market Makers: Currently unsatisfied.
300 Round Lot Holders: Currently satisfied.
One Year Operating History: Currently satisfied
Corporate Governance: Currently satisfied
</TABLE>
Although management and the Board expect that a reverse split will increase the
price investors are willing to pay for a share of Common Stock, there can be no
assurance that the reverse split will increase the price in proportion to the
reduction of shares due to a reverse split, or that any increase in the price
will occur. Because the Common Stock is not traded on an exchange or Nasdaq, and
its stock price is not quoted on the Nasdaq OTC Bulletin Board, information
regarding the current trading price (if any) of the Common Stock is not
available to the public (if at all). Although the market price for an equity
security generally increases by approximately two-fold in connection with a 2 to
1 reverse stock split of an exchange traded security with a high trading volume,
the reaction of the market to the reverse stock split in a security that is not
exchange traded (or quoted on the Nasdaq OTC Bulletin Board) and is very thinly
traded, if at all, is not as predicable. In light of the unavailability of
market price information regarding the Common Stock, the current trading price
(if any) for the Common Stock may not increase two-fold, or at all, as a result
of the reverse stock split.
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Effect of Proposed Reverse Stock Split
If the Amendment is approved and the proposed 2 to 1 reverse stock
split effected, each outstanding share of Common Stock as of the record date of
the reverse stock split will immediately and automatically be changed, as of the
effective date of the amendment, into 1/2 of a share of Common Stock. In
addition, the number of shares of Common Stock subject to outstanding options
and warrants issued by the Company will be reduced by 1/2. No fractional shares
of Common Stock or script will be issued in connection with the proposed reverse
stock split. Holders of the Company's Common Stock who would otherwise receive
one-half of a share of Common Stock pursuant to the reverse split will have
their one-half share rounded up to one full share of Common Stock (e.g., a
person holding 1,001 shares of Common Stock prior to the reverse split would
receive 501 shares of Common Stock following the reverse split instead of 500
1/2 shares).
As of October 16, 2000, the record date for the Annual Meeting, there
were 23,929,745 shares of Common Stock issued and outstanding, and 4,017,222
shares of Common Stock subject to warrants and options granted by the Company.
Assuming the reverse stock split were to occur on that date, the number of
shares issued and outstanding would be 11,964,873 shares (subject to adjustment
due to rounding of 1/2 shares), and the number of shares subject to outstanding
warrants and options granted by the Company would be 2,008,611 (subject to
adjustment due to rounding of 1/2 shares). The record date for the proposed 2 to
1 stock split is December 15, 2000. If additional shares of Common Stock are
issued or redeemed between October 16, 2000 and December 15, 2000, the actual
number of shares issued and outstanding before and after the stock split will
increase or decrease accordingly.
Because the reverse stock split will apply to all issued and
outstanding shares of Common Stock and outstanding rights to purchase Common
Stock, the proposed reverse stock split will not alter the relative rights and
preferences of existing shareholders. The Amendment will, however, effectively
increase the number of shares of Common Stock available for future issuances by
the Board. In our Certificate of Incorporation, the Board is authorized to issue
50,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock. As
of the Record Date, there were 23,929,745 shares of Common Stock issued and
outstanding and 4,017,222 shares of Common Stock reserved for issuance upon
exercise of outstanding options and warrants. The Amendment will not decrease
the number of shares the Board is authorized to issue, and shares of Common
Stock effectively cancelled as a result of the reverse stock split will be
available for reissue. Accordingly, while there are presently 22,053,033 shares
of Common Stock authorized and available for future issuance by the Board
(50,000,000 authorized, less 23,929,745 presently outstanding, less 4,017,222
reserved for issuance upon outstanding purchase rights), if the Amendment is
approved and the reverse stock split effected, the number of shares of Common
Stock available for future issuance will increase to 36,026,516 shares
(50,000,000 authorized, less approximately 11,964,873 outstanding, less
2,008,611 reserved for issuance upon outstanding purchase rights). There are no
current plans, proposals or understandings for any use of the additional shares
that would be available for issuance as a result of the proposed reverse stock
split.
If the reverse split proposal is approved by the shareholders, some
shareholders may consequently own less than one hundred shares of Common Stock.
A purchase or sale of less than one hundred shares (an "odd lot" transaction)
may result in incrementally higher trading costs through certain brokers,
particularly "full service" brokers. Therefore, those shareholders who own less
than one hundred shares following a reverse split may be required to pay
modestly higher transaction costs should they then determine to sell their
shares in the Company.
Penny Stock
Shares of the Common Stock may be deemed to be "penny stock," resulting
in increased risks to our investors and certain requirements being imposed on
some brokers who execute transactions in our Common Stock. In general, a penny
stock is a an equity security that:
o Is priced under five dollars;
o Is not traded on a national stock exchange or on Nasdaq (the NASD's
automated quotation systems for actively traded stock);
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o May be listed in the "pink sheets" or the Nasdaq OTC Bulletin Board;
and
o Is issued by a company that has less than $5 million dollars in net
tangible assets (if it has been in business less than three years) or
has less than $2 million dollars in net tangible assets (if it has been
in business for at least three years); and
o Is issued by a company that has average revenues of less than $6
million for the past three years.
The Common Stock has an unknown trading price (presumably less than five
dollars), is not trading on an exchange or Nasdaq and is issued by a Company
that has average revenues of less than $6 million. However, the Company has been
in business for at least three years and, according to the pro forma balance
sheet included in the notes of the Company's most recent audited financial
statements, has more than $2 million dollars in net tangible assets.
Accordingly, we do not believe the Common Stock is presently a "penny stock."
Nonetheless, because the Company's primary tangible assets include highly
volatile marketable securities, our net tangible assets may be less than $2
million dollars at some date in the future and, unless the Common Stock is
listed on a stock exchange or has a market price of $5, the Common Stock will
qualify as penny stock. Although a purpose of the proposed 2 to 1 reverse stock
split is to increase the market value of the Common Stock, the Company does not
believe that the reverse stock split will have the effect of increasing the
market price for the Common Stock to over $5 share (and thereby ensure that the
Common Stock is not penny stock).
At any time the Common Stock qualifies as a penny stock, the following
requirements, among others, will generally apply:
o certain broker-dealers who recommend penny stock to persons other than
established customers and accredited investors (generally institutions
with assets in excess of $5,000,000 or individuals with a net worth in
excess of $1,000,000 or an annual income exceeding $200,000 or
$300,000, jointly with their spouse) must make a special written
suitability determination for the purchaser and receive the purchaser's
written agreement to a transaction prior to sale.
o prior to executing any transaction involving penny stock, certain
broker-dealers must deliver to certain purchasers a disclosure schedule
explaining the risks involved in owning penny stock, the
broker-dealer's duties to the customer, a toll-free telephone number
for inquiries about the broker-dealer's disciplinary history, and the
customer's rights and remedies in case of fraud or abuse in the sale.
o in connection with the execution of any transaction involving penny
stock, certain broker dealers must deliver to certain purchasers the
following:
o bid and offer price quotes and volume information,
o the broker-dealer's compensation for the trade,
o the compensation received by certain salesperson for the trade,
o monthly accounts statements, and
o a written statement of the purchaser's financial situation and
investment goals.
These requirements significantly add to the burden of the broker-dealer and
limit the market for penny stocks.
If our Common Stock is or becomes subject to the existing rules on
penny stocks, the liquidity and market price for our Common Stock could be
severely affected by limiting the ability of broker-dealers to sell our Common
Stock and the ability of shareholders to sell their securities in the secondary
market.
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Exchange of Share Certificates
Each certificate representing shares of Common Stock that is issued and
outstanding, or issued and held by the Company, immediately on December 15,
2000, shall thereafter for all purposes be deemed to represent 1/2 share of
Common Stock for each share of Common Stock presently represented by such
certificate. Each holder of record of a certificate for one or more shares of
Common Stock as of December 15, 2000, shall be entitled to receive, as soon as
practicable, and upon surrender of each certificate to the officer or agent
having charge of the stock transfer books of the Company, a certificate or
certificates representing 1/2 share of Common Stock (subject to the rounding
procedures previously discussed) for each share of Common Stock represented by
the certificate of such holder immediately prior to the effective time. The
shares of Common Stock represented by certificates issued pursuant to this
paragraph shall be validly issued, fully paid and nonassessable. Any legends set
forth on any existing certificate will also be set forth on the corresponding
replacement certificate.
The Board of Directors recommends a vote FOR the amendment to the
Certificate of Incorporation to effect a 2 to 1 reverse stock split of the
Common Stock.
PROPOSAL NO. 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Ratification of the appointment by the Board of Directors of the
independent public accountants for the Company for the current fiscal year
ending March 31, 2001 is to be voted upon at the Annual Meeting. The Board of
Directors recommends shareholder ratification of the appointment of Mantyla
McReynolds, a Professional Corporation, whose appointment has been approved,
subject to shareholder approval, by the Board of Directors. Representatives of
Mantyla McReynolds are expected to be present at the Annual Meeting to answer
any questions shareholders may have and will be given the opportunity to make a
statement if they desire to do so.
The affirmative vote of a majority of the votes cast on this proposal
shall constitute ratification of the appointment of Mantyla McReynolds.
The board of directors recommends a vote for the ratification of the
appointment of Mantyla McReynolds, a Professional Corporation, as independent
public accountants for the current fiscal year ending march 31, 2001.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of
no other matters to be presented for action at the Annual Meeting. However, if
any further business should properly come before the Annual Meeting, the persons
named as proxies in the accompanying form will vote on such business in
accordance with their best judgment.
PROPOSALS OF SHAREHOLDERS
In order to be included in the proxy statement and form of proxy
relating to the Company's annual meeting of shareholders to be held in 2001,
proposals that shareholders intend to present at such annual meeting must be
received by the corporate secretary of the Company, at the Company's executive
offices, 10542 South Jordan Gateway, Suite 200, South Jordan, Utah, 84095 no
later than June 17, 2001. Any shareholder proposal also must be proper in form
and substance, as determined in accordance with the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder. Pursuant to rules
adopted by the SEC, if a shareholder intends to propose any matter for a vote at
the Company's annual meeting of shareholders to be held in the 2001 calendar
year, but fails to notify the Company of such intention prior to August 31,
2001, then a proxy solicited by the board of directors may be voted on such
matter in the discretion of the proxy holder, without discussion of the matter
in the proxy statement soliciting such proxy and without such matter appearing
as a separate item on the proxy card.
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INCORPORATION OF INFORMATION BY REFERENCE
The Company has delivered herewith a copy of the Company's Annual
Report on Form 10-KSB/A for the fiscal year ended March 31, 2000 and a copy of a
Quarterly Report on Form 10-Q for the period ended June 30, 2000, including the
financial statements and schedules thereto. "Item 6. Management's Discussion and
Analysis" and "Item 7. Financial Statements" from such reports are incorporated
in this Proxy by reference.
ADDITIONAL INFORMATION
The Company will provide without charge to any person from whom a proxy
is solicited by the Board of Directors, upon the written request of such person,
a copy of the Company's Annual Report on Form 10-KSB/A for the fiscal year ended
March 31, 2000, including the financial statements and schedules thereto (as
well as exhibits thereto, if specifically requested and payment is made for
actual reproduction costs of such exhibits), required to be filed with the
Securities and Exchange Commission. Written requests for such information should
be directed to Stephen Russo at 10542 South Jordan Gateway, Suite 200, South
Jordan, Utah, 84005, phone number: 801.501.7100, facsimile number: 801.501.0701.
14
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Appendix A
Proposed Certificate of Amendment
of
Certificate of Incorporation
[see attached]
15
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STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
SunDog Technologies, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors, resolutions were
duly adopted setting forth a proposed amendment of the Certificate of
Incorporation of said corporation, declaring said amendment to be advisable and
directing that said amendment be considered at the next annual meeting of
shareholders. The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered "FOURTH" so that, as
amended, said Article shall have the following additional language
after subsection (h):
Each two (2) shares of Common Stock issued and
outstanding as of 5:00 p.m. Eastern Time on December 15, 2000,
(the "Change Time"), and each issued two (2) shares of Common
Stock held by the Company on and as of the Change Time, shall
be, on and as of the Change Time, combined into one share of
Common Stock.
Each certificate representing shares of Common Stock
that is issued and outstanding, or issued and held by the
Company, immediately prior to the Change Time, shall
thereafter for all purposes be deemed to represent one share
of the corresponding class of Common Stock for each two (2)
shares of Common Stock represented by such certificate; and
each holder of record of a certificate for two (2) or more
shares of Common Stock as of the Change Time shall be entitled
to receive, as soon as practicable, and upon surrender of each
certificate to the officer or agent having charge of the stock
transfer books of the Company, a certificate or certificates
representing one share of Common Stock for each two (2) shares
of Common Stock represented by the certificate of such holder
immediately prior to the Change Time. No fractional shares of
Common Stock or script will be issued in connection with the
foregoing. Holders of the Common Stock who would otherwise be
entitled to a fractional share will receive the next largest
whole number of shares of Common Stock. The shares of Common
Stock represented by certificates issued pursuant to this
paragraph shall be validly issued, fully paid and
nonassessable.
SECOND: That thereafter, the annual meeting of the Company was duly
called and held upon on November 16, 2000 at 10:00 a.m. (the "Annual Meeting"),
at which Annual Meeting the necessary number of shares as required by statute
were voted in favor of the amendment.
THIRD: That the amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
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FOURTH: That the capital of said corporation shall not be reduced under
or by reason of the amendment.
IN WITNESS WHEREOF, Sundog Technologies, Inc. has caused this
certificate to be signed by Alan Rudd, an Authorized Officer, this
_____________________ day of __________________, 2000.
By:/s/ Alan Rudd
----------------
Alan Rudd, President
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PROXY
SUNDOG TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Alan Rudd and Steve Russo, and each of
them, as proxies, with full power of substitution, and hereby authorizes them to
represent and vote, as designated below, all shares of Common Stock of Sundog
Technologies, Inc., a Delaware corporation (the "Company"), held of record by
the undersigned on October 16, 2000, at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held at the Marriott Courtyard located at 10701 South
Holiday Park Drive, Sandy, Utah, on Thursday, November 16, 2000, at 10:00 a.m.
MST, or at any adjournment or postponement thereof, upon the matters set forth
below, all in accordance with and as more fully described in the accompanying
Notice of Annual Meeting and Proxy Statement, receipt of which is hereby
acknowledged.
1. ELECTION OF DIRECTORS, each to serve until the next annual meeting of
shareholders of the Company and until their respective successors shall
have been duly elected and shall qualify.
FOR all nominees listed below (except as marked to the contrary).
WITHOUT AUTHORITY to vote for all nominees listed below.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.)
ALAN RUDD JOHN ZOLLINGER BRYAN ALLEN
2. PROPOSAL TO APPROVE an amendment to the Company's Articles of Incorporation
to effect a 2 to 1 reverse stock split of each outstanding share of common
stock.
FOR AGAINST ABSTAIN
3. PROPOSAL TO RATIFY the appointment of Mantyla McReynolds as independent
auditors of the Company for the fiscal year ending March 31, 2001.
FOR AGAINST ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE DIRECTOR NOMINEES NAMED ABOVE, FOR THE PROPOSAL
TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION TO EFFECT A 2 TO 1 REVERSE
STOCK SPLIT AND FOR THE RATIFICATION OF THE APPOINTMENT OF MANTYLA MCREYNOLDS AS
INDEPENDENT AUDITORS OF THE COMPANY.
Please complete, sign and date this proxy where indicated and return it
promptly in the accompanying prepaid envelope.
DATED: , 2000
-------------------
--------------------------------------
Signature
--------------------------------------
Signature if held jointly
(Please sign above exactly as the shares are issued. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.)
