SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
X Filed by the registrant
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
NEW PARADIGM SOFTWARE CORP.
(Name of Registrant as Specified in Its Charter)
___________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of filing fee (Check the appropriate box):
x No fee required.
(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:
___________________________________________________________
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:
___________________________________________________________
DEAR SHAREHOLDER:
On behalf of the Board of Directors and management, we cordially invite you to
the Annual Meeting of Shareholders to be held on Thursday, November 16, 2000, at
11:30 A.M. at the New York Yacht Club, 37 West 44th Street, New York, New York.
In the pages that follow you will find the Notice of Annual Meeting and the
Proxy Statement describing the formal business to be transacted at this meeting.
Please read them carefully.
At the Annual Meeting, there will be a report to shareholders regarding the
operations of New Paradigm Software Corp. In addition, time will be made
available for shareholders to discuss the formal business items as well as to
ask other questions about your Corporation's operations.
It is important that your shares be voted at the meeting in accordance with your
preference whether or not you plan to attend in person. We urge you to specify
your choices on the matters presented by filling in the appropriate boxes on the
enclosed Proxy Card. Please sign, date and return the Proxy Card in the prepaid
envelope provided. Your cooperation in promptly returning the Proxy Card will
save your Corporation additional solicitation costs and is appreciated. If you
do attend the meeting and wish to vote in person, you may withdraw your Proxy at
that time.
Sincerely,
/s/ Daniel A. Gordon
Daniel A. Gordon
Chairman of the Board
October 11, 2000
Re: NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 16, 2000
To the Shareholders of New Paradigm Software Corp.:
The Annual Meeting of Shareholders of New Paradigm Software Corp. (the
"Corporation" or the "Company") will be held at the New York Yacht Club, 37 West
44th Street, New York, New York, on Thursday, November 16, 2000, at 11:30 A.M.,
for the purpose of considering and voting upon the following:
1. Election of four directors;
2. Amending the Corporation's certificate of incorporation to change the
name of the Corporation from New Paradigm Software Corp. to New Paradigm
Strategic Communications, Inc.;
3. Ratification of the appointment of Goldstein & Morris, LLP as the
independent certified public accountants for the fiscal year ending March 31,
2001; and
4. Such other business as may properly come before the Annual Meeting or any
adjournment thereof.
Information relating to the above matters is set forth in the accompanying Proxy
Statement.
In accordance with the By-Laws of the Corporation, only shareholders of record
at the close of business on September 28, 2000 (the "Record Date") shall be
entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors,
/s/ Michael S. Taylor
Michael S. Taylor
Secretary
___________________________________________________________
Please sign and return the enclosed proxy card in the envelope provided.
No postage is necessary.
___________________________________________________________
630 Third Avenue, 15th Floor
New York, New York 10017
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 16, 2000
PROXY STATEMENT
To the Shareholders of New Paradigm Software Corp.:
This statement is furnished in connection with the solicitation of proxies by
the Board of Directors of New Paradigm Software Corp. (the "Corporation" or the
"Company") for use at the annual meeting of Shareholders to be held at 11:30
A.M. on Thursday, November 16, 2000, at the New York Yacht Club, 37 West 44th
Street, New York, New York, and at any adjournment thereof (the "Annual
Meeting").
A Notice of Annual Meeting is attached hereto and a form of proxy is enclosed.
THE PROXY
The persons named as proxies were selected by the Board of Directors of the
Corporation and are directors or officers of the Corporation.
When the proxies in the enclosed form are properly executed and returned, the
shares they represent will be voted at the Annual Meeting in accordance with the
shareholders' directions. Any shareholder giving a proxy has the power to revoke
it at any time before it is voted at the Annual Meeting by filing with the
Secretary of the Corporation an instrument revoking it or by filing a duly
executed proxy bearing a later date.
The proxy cards should be sent to the Corporation sufficiently in advance of the
Annual Meeting so that they are received at the principal executive offices of
the Corporation prior to the commencement of the Annual Meeting.
The cost of soliciting proxies will be borne by the Corporation. The Corporation
will request banks and brokers to solicit their customers who have a beneficial
interest in the Corporation's shares registered in the names of nominees and
will reimburse such banks and brokers for their reasonable out-of-pocket
expenses of such solicitations. In addition, directors, officers and full-time
employees of the Corporation may solicit proxies by telephone, telegraph or
personal interview.
These proxy materials are being mailed to shareholders of the Corporation
commencing on October 11, 2000 accompanied by a copy of the Corporation's annual
report on Form 10-KSB for the year ended March 31, 2000, as amended. THE
CORPORATION WILL PROVIDE, WIHTOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM
10-KSB FOR THE YEAR ENDED MARCH 31, 2000, INLUDING FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES, to each person solicited, on the written request
of any such person being mailed to:
Ms. Joan Taylor
New Paradigm Software Corp.
630 Third Avenue, 15th Floor
New York, New York 10017
If the person requesting a copy was not a shareholder of record on the Record
Date, the request must contain a good faith representation that the person
making the request was a beneficial owner of the common stock of the Corporation
at the close of business on such date. The Corporation's annual report on Form
10-KSB for the year ended March 31, 2000 is also available on the Corporation's
Web site at http://www.newparadigm.com.
Exhibits also may be requested, but a charge equal to the reproduction cost
thereof will be assessed.
VOTING SECURITIES
All of the Company's preferred stock has been converted in accordance with their
respective terms. Accordingly, the only securities of the Corporation entitled
to vote at the Annual Meeting are shares of Common Stock, par value $.01 per
share (the "Common Stock"), outstanding on September 28, 2000 (the "Record
Date"). On that date, there were 4,644,297 shares of Common Stock outstanding.
Each share of Common Stock is entitled to one vote at the Annual Meeting.
VOTING PROCEDURES
Under the New York Business Corporation Law (the "BCL") and the Corporation's
By-Laws, the presence, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock entitled to vote on a particular matter
is necessary to constitute a quorum of shareholders to take action at the Annual
Meeting with respect to such matter. For these purposes, shares which are
present, or represented by a proxy, at the Annual Meeting will be counted for
quorum purposes regardless of whether the holder of the shares or proxy fails to
vote on any particular matter or whether a broker with discretionary authority
fails to exercise its discretionary voting authority with respect to any
particular matter. Once a quorum of the shareholders is established, under the
BCL and the Corporation's By-Laws, the directors standing for election must be
elected by a plurality of the votes cast and each other matter will be decided
by a majority of the votes cast on the matter, except as otherwise provided by
law or the Corporation's Certificate of Incorporation. For voting purposes (as
opposed to for purposes of establishing a quorum) abstentions and broker
non-votes will not be counted in determining whether the directors standing for
election have been elected and whether each matter has been approved.
1. ELECTION OF FOUR DIRECTORS
Under the Corporation's By-Laws, the number of directors that constitutes the
entire Board of Directors is seven (7). This number may be increased or
decreased (but not to a number less than three (3) from time to time by action
of the Board of Directors taken by the affirmative vote of a majority of the
entire Board of Directors. No decrease in the number of directors shall shorten
the term of any incumbent director. Directors shall be elected at the annual
meeting of shareholders to hold office until the next annual meeting of
shareholders and until their respective successors are elected and qualified.
The Corporation's By-Laws provide that only persons nominated in accordance with
certain procedures are eligible for election as directors. Nomination of
persons for election to the Board of Directors of the Corporation may be made at
the Meeting by or at the direction of the Board of Directors, or by any
shareholder of the Corporation entitled to vote under a procedure outlined
below.
Shareholder Nomination of Directors
The Corporation's By-Laws contain procedures for shareholder nomination of
directors and for other shareholder proposals to be presented before annual and
other shareholder meetings. The By-Laws provide that nominations of persons for
election to the Board of Directors of the Corporation may be made at an annual
meeting of shareholders or at a special meeting of shareholders for which notice
of an election of a director or directors has been duly given by any shareholder
of the Corporation entitled to vote for election of directors at the meeting who
complies with the notice procedures described below. Such nominations may be
made only pursuant to timely notice in proper written form to the Secretary of
the Corporation. To be timely, a shareholder's request to nominate a person for
director, together with the written consent of such person to serve as director,
must be received by the Secretary of the Corporation before the close of
business on the eighth day following the day on which notice of such meeting is
given to shareholders. To be in proper written form, such shareholder's notice
shall set forth in writing (a) as to each person whom the shareholder proposes
to nominate for election or re-election as a director (1) the name, age,
business address and residence address for such person, (2) the principal
occupation or employment of such person, (3) the class and number of shares of
stock of the Corporation that are beneficially owned by such person, and (4)
such other information relating to such person as is required to be disclosed in
solicitations of proxies for election of directors, or as otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934
and any successor to such Regulation; and (b) as to the shareholder giving the
notice (1) the name and address, as they appear on the Corporation's books, of
such shareholder, (2) the class and number of shares of stock of the Corporation
that are beneficially owned by such shareholder, and (3) a representation that
the shareholder is a holder of record of stock of the Corporation entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice. The Corporation may
require any proposed nominee to furnish such other information as may reasonably
be required by the Corporation to determine the eligibility of such proposed
nominee to serve as a director of the Corporation or the shareholder to nominate
the proposed nominee.
The Board of Directors will nominate, or cause to be nominated, Mr. Mark A.
Blundell, Mr. Rocco Cipriano, Mr. Daniel A. Gordon and Mr. Michael S. Taylor,
for election to the Board of Directors at the Meeting. The persons named as
proxies in the enclosed form of proxy cannot exercise the discretionary
authority granted to them by the proxy to vote for a greater number of persons
than the number of nominees named.
Six directors, including Daniel A. Gordon, Mark A. Blundell and Michael S.
Taylor were elected at the 1997 annual meeting of shareholders.
THE BOARD OF DIRECTORS' RECOMMENDATION
Unless otherwise specified by the shareholder, the Board of Directors intends
the accompanying proxy to be voted FOR the election of the named four proposed
nominees as directors.
The Board of Directors does not contemplate that any of the persons it will
nominate will be unable or unwilling to serve as a director. However, if that
should occur, the individuals named as the proxies reserve the right to
substitute another person as may be selected by the Board of Directors when
voting at the Annual Meeting.
Following is information about each of the four persons who will be nominated
for director at the Annual Meeting.
PROPOSED NOMINEES FOR ELECTION AS DIRECTOR FOR TERM EXPIRING AT THE NEXT ANNUAL
MEETING
MARK A. BLUNDELL, age 42, is the Chief Executive Officer, President, Chief
Financial Officer and a current director of the Corporation and has served in
these capacities since the Corporation's inception in July 1993. From October
1991 until December 1993, Mr. Blundell was initially the Chief Executive Officer
of Management Technologies, Inc.'s ("MTI") European subsidiary and then the
Chief Operating Officer and Chief Financial Officer of MTI in New York. He was
also a director of MTI from December 1993 to March 1994. MTI is a publicly held
financial services software company. From May 1988 to October 1991, Mr. Blundell
was the Chief Executive Officer of London Fox, the futures and options exchange.
He is also a director and President of Lancer Holdings, Inc. ("Lancer"), a
company formed to hold certain intellectual property rights relating to software
formerly owned by the Corporation and which currently conducts no business with
the Corporation. Lancer is a principal shareholder of the Corporation. Mr.
Blundell received an M.A. in Politics, Philosophy and Economics from Pembroke
College, Oxford, England.
ROCCO CIPRIANO, age 47 was appointed to the board on June 2, 1998. He has
served as Executive Vice President - Creative, for Kapelus &Cipriano, Inc.
("K&C") in Harrison, NY since 1992. Upon the Company's acquisition of certain
assets and assumption of certain liabilities of K&C as of April 1, 1998 he was
appointed Executive Vice President, Creative of New Paradigm Advertising, Inc.,
a wholly owned subsidiary of the Corporation. He holds a Professional Degree in
Communications from Parsons School of Design, New York, New York.
DANIEL A. GORDON, age 61, an attorney, has been a director and the Chairman of
the Board of Directors of the Corporation since November 1993. He has been a
principal with Corporate Growth Services since 1992. Corporate Growth Services
provides consulting support services to businesses in the early stages of
development. From 1989 to 1992, Mr. Gordon served as President of COIN Banking
Systems, Inc., which had been the banking systems division of COIN Financial
Systems, Inc. Mr. Gordon had served as Chairman and Chief Executive Officer of
COIN Financial Systems, Inc., a financial software development company, from
1984-1989. He received a B.A. in English from Dartmouth College and an L.L.B.
from George Washington University.
MICHAEL S. TAYLOR, age 58, has been a director of the Corporation since April
1996. He is the Senior Vice President - Corporate Finance of Gilford Securities.
From March 1996 to November 1996 he was a Managing Director of Investment
Banking at Laidlaw Equities. He was Associate Director of Investment Banking for
Josephthal Lyon & Ross from June 1989 to March 1996. From December 1981 until
joining Josephthal, he was President of Mostel & Taylor Securities, Inc., a
NASD-member investment banking and brokerage firm. He has been involved in the
securities industry since 1966, when he joined Lehman Brothers as an analyst.
He is also Chairman of the Board of Jennifer Muller/The Works, a contemporary
dance company. He attended Amherst College and Columbia University.
INFORMATION AS TO COMMITTEES, ATTENDANCE AND FEES OF THE BOARD OF DIRECTORS
The Corporation's Board of Directors has standing Audit and Compensation
Committees. The Board has no standing nominating committee.
The Audit Committee is comprised of Mr. Gordon and Mr. Taylor. During the fiscal
year ended March 31, 2000, the Audit Committee held one meeting. The functions
performed by the Audit Committee include: (a) reviewing and approving the scope
and coverage of the Corporation's annual audit; (b) discussing any significant
difficulties encountered or significant findings made during the annual audit;
(c) reviewing and approving the annual audit, financial statements and
management letters following completion of the Corporation's annual audit; (d)
reviewing with the Corporation's independent certified public accountants and
the Corporation's management the accounting systems, financial controls and
procedures used by the Corporation; (e) reviewing and approving the annual audit
budget and actual fees paid to the Corporation's independent certified public
accountants; and (f) recommending to the Board of Directors each year the firm
of independent certified public accountants to be retained for the following
year.
The Compensation Committee is comprised of Mr. Gordon, Mr. Taylor and Mr.
Blundell. During the fiscal year ended March 31, 2000, the Compensation
Committee held one meeting. The functions performed by the Compensation
Committee include: (a) establishing and approving the compensation to be paid to
members of the Corporation's senior management; (b) administering the
Corporation's stock incentive plans; and (c) authorizing and approving any
special compensation arrangements for senior management.
The Board of Directors of the Corporation held a total of 5 meetings during the
fiscal year ended March 31, 2000. During the periods in which they served on the
Board of Directors all directors attended 100% of (1) all meetings of the Board
of Directors and (2) all meetings of all board committees on which they served.
The overall attendance record for all directors as a group during the fiscal
year ended March 31, 2000 was 100%.
INDEMNIFICATION
The Corporation's Certificate of Incorporation and By-Laws contain provisions
exculpating the Corporation's directors from liability to the Corporation's
shareholders for certain actions taken or omitted by them and indemnifying the
Corporation's officers and directors against judgments, fines, amounts paid in
settlement and reasonable attorneys' fees incurred in the defence of certain
actions and proceedings to the extent permitted under the BCL.
The Corporation did not purchase directors' and officers' liability insurance
coverage for the year ended March 31, 2000. There is currently no such coverage
in place. The Corporation is evaluating the possibilities and cost of
purchasing directors' and officers' liability insurance coverage, and may do so
in order to attract more directors in the future.
DIRECTORS' COMPENSATION
The directors of the Company currently receive no fees. They are reimbursed by
the Company for their direct costs for attending meetings. On April 26, 1995
Messrs. Blundell, Gordon and three former directors were granted options under
the Company's Stock Option Plan to purchase 5,333 shares of Common Stock each at
an exercise price of $4.50 per share. These options became exercisable on April
26, 1996 and expire on April 26, 2005. On November 30, 1995 Mr. Gordon and two
former directors were each granted options under the Company's Stock Option Plan
to purchase 10,000 shares of Common Stock at an exercise price of $5.125 per
share. On April 24, 1996, Mr. Taylor was granted options under the Company's
Stock Option Plan to purchase 10,000 shares of Common Stock at an exercise price
of $5.125 per share. These options become exercisable on April 24, 1997 and
expire on April 24, 2001. On October 15, 1997, Messrs. Taylor and Gordon were
each granted 50,000 options to purchase shares of Common Stock at an exercise
price of $0.16 per share. As of January 1, 1998, Mr. Chalek, a former director,
was granted 50,000 options to purchase shares of Common Stock at an exercise
price of $0.25 per share (the market price on the date of issue). On January
12, 1999, Messrs. Taylor and Gordon were granted 20,000 options to purchase
shares of Common Stock at an exercise price of $2.1875 per share. All options
granted to Directors as compensation are exercisable at the market price on the
date of grant.
BENEFICIAL OWNERSHIP OF THE CORPORATION'S COMMON STOCK (a)
The following table indicates the beneficial ownership of the Company's Common
Stock as of March 31, 2000, by (1) each of the directors, (2) each of the
executive officers of the Company, (3) all directors, and executive officers of
the Company as a group and (4) each person or entity which beneficially owned in
excess of five percent of the Common Stock, based upon information supplied by
each of the directors, nominees, executive officers and five percent beneficial
owners:
<TABLE>
<CAPTION>
COMMON STOCK
Right to Right to Total Percent of
Sole Shared Number of Common
Voting and Voting and Shares Stock
Name of Investment Investment Beneficially Beneficially
Beneficial Owner(a) Power Power Owned Owned
<S> <C> <C> <C> <C> <C> <C>
Mark Blundell 648,432 (b) 166,666 (c) 815,098 15.40%
Daniel Gordon 135,333 (d) - 135,333 2.81%
Lancer Holdings 166,666 (e) - 166,666 3.46%
Midland Associates 619,999 (e) - 619,999 11.78%
Michael Taylor 120,000 (f) - 120,000 2.52%
Robert Trump 375,000 (g) 619,999 (h) 994,999 19.92%
Rocco Cipriano 269,000 (i) 72,000 (j) 341,000 7.19%
Ali Faraji 442,666 (k) 442,666 8.70%
All Directors and
Executive Officers of
the Company as a group
(a total of 4 persons) 1,192,765 238,666 1,431,431 24.17%
</TABLE>
a) The shares of Common Stock beneficially owned by each person or by all
directors and executive officers as a group, and the shares included in the
total number of shares of Common Stock outstanding used to determine the
percentage of shares of Common Stock beneficially owned by each person and such
group, have been adjusted in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934 to reflect the ownership of shares issuable upon exercise
of outstanding options, warrants or other common stock equivalents which are
exercisable within 60 days. As provided in such Rule, such shares issuable to
any holder are deemed outstanding for the purpose of calculating such holder's
beneficial ownership but not any other holder's beneficial ownership.
b) Consists of (i) 459,767 shares of Common Stock, (ii) 38,666 shares of
Common Stock issuable upon exercise of options granted under the Company's Stock
Option Plan ("SOP") that are currently exercisable, and (iii) 149,999 shares of
Common Stock underlying stock options granted under the Executive Stock Option
Plan.
c) Represents the holdings of Lancer Holdings of which Mr. Blundell is a 33%
owner, director and officer. Lancer Holdings owns 166,666 shares of Common
Stock.
d) Consists of 135,333 shares of Common Stock issuable upon exercise of
options.
e) Consists of 439,999 shares of Common Stock and 180,000 shares of Common
Stock issuable upon exercise of warrants. These securities were previously owned
by Management Technologies, Inc. ("MTI") and transferred to Midland Associates
in satisfaction of a loan to MTI by Midland Associates.
f) Consists of 120,000 shares of Common Stock issuable upon exercise of
options granted under the SOP.
g) Consists of (i) 25,000 shares of Common Stock, (ii) 200,000 shares of
Common Stock issuable upon exercise of 1994 Warrants and (iii) 150,000 shares of
Common Stock issuable upon exercise of warrants having an exercise price of
$2.00 per share issued by the Company in connection with a loan by Mr. Trump
(see Certain Transactions below).
h) Represents the holdings of Midland Associates. Consists of the securities
listed in note (e) above.
i) Represents (i) 169,000 shares of Common Stock and (ii) 100,000 shares of
Common Stock issuable upon exercise of options.
j) Represents 72,000 shares of Common Stock issuable to K&C pursuant to a
certain agreement of purchase and sale of assets between the Company and K&C.
Mr. Cipriano is a 50 % owner, director and officer of K&C.
k) Represents 442,666 shares of Common Stock.
There was no Preferred Stock issued and outstanding as of March 31, 2000.
INFORMATION AS TO EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation of the
Company's chief executive officer for services rendered in all capacities to the
Company. The Company has only one executive officer
<TABLE>
<CAPTION>
Year Annual Compensation
Fiscal Year Securities
<S> <C> <C> <C> <C> <C>
Name and Ended Other Annual Underlying All Other
Principal Position March 31, Salary ($) Compensation Options/SARs compensation
Mark A. Blundell
Chief Executive
& President 1998 $ 150,000 $ 57,000(1) 450,000 $ 1,100
1999 $ 115,000 $ 57,000(1) 0 -
2000 $ 150,000 $ 57,000(1) 150,000 $ 65,100(2)
</TABLE>
.SUMMARY COMPENSATION TABLE
No other Executive or employee received total annual salary and bonus in excess
of $100,000.
(1) Reflects a non-accountable expense allowance of $4,000 per month, and a
car allowance of $750 per month.
(2) Reflects the insurance premium paid by the Company for term life
insurance and the cashless exercise of options to purchase 397,000 shares of
Common Stock.
OPTION GRANTS IN FISCAL YEAR ENDED MARCH 31, 2000
The following table sets forth all grants of stock options made during the
fiscal year ended March 31, 2000 pursuant to the Company's Stock Option Plan to
Officers or Directors:
Individual Grants:
<TABLE>
<CAPTION>
Percent of Total
Number of Options SARs
Securities Granted to
Underlying Employees and
Options/SARs Directors in Exercise Price Expiration
Name Granted Fiscal Year ($/Shr) Date
<S> <C> <C> <C> <C>
Mark A. Blundell 100,000 46.51% $ 2.1875 3/22/05
Michael Taylor 20,000 9.30% $ 2.1875 3/22/05
Daniel Gordon 20,000 9.30% $ 2.1875 3/22/05
</TABLE>
AGGREGATE OPTION EXERCISES IN FISCAL YEAR ENDED MARCH 31, 2000 AND YEAR-END
OPTION VALUES
The following table sets forth information with respect to options exercised by
the Company's Chief Executive Officer during the fiscal year ended March 31,
2000 and the number and value of unexercised options as of March 31, 2000:
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Money Options at March 31,
Options at March 31, 2000 2000(a)
Shares
Acquired
on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Mark Blundell 427,600 $ 60,000 287,555 100,000 $ 0 $ 0
</TABLE>
(a) Based on the closing price of New Paradigm Software Corp. Common Stock
on September 19, 2000 of $1.00 as reported on NASDAQ Bulletin Board.
<PAGE>
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
Employment Contracts
The Company has entered into employment contracts with Mr. Blundell, its
President and Chief Executive Officer.
The employment contract contains the following principal features.
Term: Five years; Base Salary: $200,000 per annum (Mr. Blundell has waived
$50,000 per annum of this Base Salary (which is not being accrued) until such
time as the Company would otherwise be able to report a pre-tax annual profit in
excess of $75,000); Allowances: Mr. Blundell receives a non-accountable expense
allowance of $4,000 per month and a car allowance of $750 per month. Common
Stock Award: Mr. Blundell received 26,667 shares of Common Stock. Mr. Blundell's
contract originally provided that if the Company achieved at least $2.5 million
in sales in any period of twelve consecutive months, Mr. Blundell would be paid
a bonus of $50,000. Mr. Blundell's employment contract provided that if such
bonus target was achieved and such bonus paid, he and the Company would
negotiate a new bonus arrangement.
Mr. Blundell is entitled to receive a death benefit of $1,000,000 payable to a
beneficiary named by him. The Company has obtained a life insurance policy to
fund this benefit. Mr. Blundell's employment agreement will renew automatically
from year to year unless Mr. Blundell or the Company gives notice of termination
to the other on or before May 1 of any year beginning in 1999. In the event
that the Company terminates the contract other than for cause, or in the event
of a change of control or a sale of substantially all the assets of the Company,
Mr Blundell is entitled to receive a payment equivalent to two year's benefits
under the contract.
Following the sale of its original software product Copernicus to VIE Systems
Inc., Mr. Blundell, gave formal written notice of his intention to exercise the
termination right under his employment contract since this represented a
transfer of substantially all the assets of the Company. These termination
rights provided for the payment to Mr. Blundell of an amount not less than
$414,000. As the Company was not in a position to make such a payment without
seriously depleting the Company's limited cash reserves, the compensation
committee negotiated with Mr. Blundell to produce the following settlement,
which was entered into on November 13, 1997.
Mr. Blundell waived his entitlement to any payment in respect of the VIE
transaction and entered into new three year employment contracts with the
Company and its Delaware subsidiary, New Paradigm Advertising, Inc. ("NPA") at
the same aggregate base salary which provide a termination benefit of 24 months
compensation in the event that his termination right is triggered again by
subsequent events. Mr. Blundell waived $50,000 of base salary for fiscal 1998
and until the Company reports a consolidated pre-tax profit of not less than
$75,000. In view of the fact the Company was contemplating a number of
acquisitions of companies with revenues in excess of $2.5 million, the new
contract provides that Mr. Blundell would not be entitled to receive the bonus
of $50,000 in the event that the Company's gross revenues reach $2.5 million
provided in his previous contract.
In addition the change of control clause, which gives Mr. Blundell certain
termination rights would be amended to apply only in the event that 40% of the
Company were to be acquired rather than 25% as his previous agreement. In order
to retain Mr. Blundell's services in seeking acquisitions NPA entered into an
employment agreement (as mentioned above) and a loan agreement providing for a
loan to Mr. Blundell of $114,000 at an interest rate of 6%. The loan will be
repaid by applying 60% of (i) any future termination payment to Mr. Blundell;
(ii) any bonus or incentive payments; and (iii) any sales of Common Stock of New
Paradigm directly or beneficially owned by Mr. Blundell, including any Stock
acquired through the exercise of options.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
The Compensation Committee of the Board of Directors (the "Committee") is
composed of the individuals listed below, who are independent outside directors
of the Corporation. The Committee has sole responsibility for all compensation
matters with respect to the Corporation's senior management.
PHILOSOPHY
The Corporation seeks to attract, motivate and retain senior management by
providing a fully competitive total compensation opportunity based on
performance. The compensation package of each member of senior management
consists of two key elements: (1) base salary which reflects competitive
marketplace data and evaluated individual performance; and (2) long-term
stock-based incentive opportunities consisting of annual stock option grants.
The long-term stock-based incentive opportunities are intended to align the
interests of senior management with those of the Corporation's other
shareholders.
The Corporation's executive compensation program is structured so that at higher
management levels a larger portion of total compensation is composed of
long-term stock-based compensation.
The Committee strives to balance short- and long-term incentive objectives and
to employ prudent judgment in establishing financial performance criteria,
evaluating performance and determining actual incentive payments.
Following is a discussion of each of the elements of the Program and a
description of the specific decisions and actions taken by the Committee with
regard to compensation for the fiscal year ended March 31, 2000.
PROGRAM COMPETITIVENESS
Each element of the compensation arrangements for senior management is intended
to be fully competitive with comparable elements of competitor companies in the
relevant industry. Salary ranges are established for each position using
published survey information of industry compensation practices, where
available.
The long-term incentive option grant guidelines are reviewed by the Committee
based upon total options granted to employees of the Corporation, seniority and
position. These grant guidelines are intended to provide competitive long-term
compensation opportunities if the assumptions as to goal achievement and stock
price growth are realized.
ANNUAL SALARY AND BONUSES
Annual total cash compensation for senior management consists of base salary and
bonus. The base salaries for senior executives other than the CEO are
recommended by Mr. Blundell based on the competitive marketplace, evaluated
position responsibilities and individual performance, and are reviewed and
approved by the Committee. Bonuses are awarded as compensation for extraordinary
goals achieved by individual members. No bonuses were awarded in the fiscal year
ended March 31, 2000. Mr. Blundell's employment contract provides that he would
be paid a bonus of $50,000 if the Corporation achieves at least $75,000 in net
profit in any fiscal year. No such bonus has been paid or accrued. (See also
"Certain Transactions" - Mr. Blundell's Settlement)
LONG-TERM INCENTIVE COMPENSATION
The long-term incentive compensation program for senior management consists of
stock options. All option awards were granted under the Corporation's Stock
Option Plan, which Plan was approved by shareholders on September 13, 1994 and
amended by shareholders October 12, 1996. Stock options provide the right to
purchase shares of Common Stock at the fair market value (the average of the
high and low trading prices) on the date of grant. These grants are awarded
under the general principal that larger grants will be made to employees at
higher salary and management levels. Stock options generally become exercisable
one year after grant, and have a ten-year maximum term. The Compensation
Committee may apply other vesting periods on a case-by-case basis.
The size of the awards of stock options are not reduced for any current stock
holdings or previous awards held by a participant.
FISCAL YEAR ENDED MARCH 31, 2000 CEO COMPENSATION
Mr. Blundell's base salary is fixed in his employment contract. The
appropriateness of his base salary is reviewed annually by the Committee. As
part of its review, the Committee considers competitive CEO base salary
information from strategic communications industry companies, including
internet-based companies identified by the Committee, Mr. Blundell's individual
performance and contributions since his last review, and the merit increase
guidelines in effect for other salaried employees during the period.
In early 1997, the Committee reviewed and approved the 1997 Executive Stock
Option Plan for the Corporation's management employees and Directors, including
Mr. Blundell.
The option awards granted under the Stock Option Plan which the Committee
approved for Mr. Blundell were made in accordance with the grant guidelines
established in 1995. Mr. Blundell's awards for the year ended March 31, 2000
consist of 100,000 stock option shares, and are disclosed in the Option Grants
Table along with the awards for the fiscal year ended March 31, 2000. (See also
"Certain Transactions" - Mr. Blundell's Settlement)
CLOSING STATEMENT
The Committee believes that the caliber and motivation of the Corporation's key
employees and the quality of their leadership makes a significant difference in
the long-term performance of the Corporation. The Committee further believes
that compensation should vary with the Corporation's financial performance so
that executives are well rewarded when performance meets or exceeds standards
established by the Committee.
The Committee believes that New Paradigm Software Corp.'s executive compensation
program is meeting and fulfilling the goals contained in the program's
philosophy.
The foregoing report has been furnished by Mr. Gordon (Chairman), Mr. Taylor and
Mr. Blundell.
The Compensation Committee Report on Executive Compensation shall not be deemed
to be "soliciting material" or to be "filed" with the Securities and Exchange
Commission or subject to Regulation 14A or 14C under the Securities Exchange Act
of 1934 or to the liabilities of Section 18 of such Act.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of Mr. Gordon, Mr. Taylor and Mr.
Blundell. Mr. Gordon, Mr. Taylor and Mr. Blundell served on the Compensation
Committee during the entire fiscal year ended March 31, 2000.
Mr. Gordon, a member of the Committee, has been the Chairman of the Board of
Directors of the Corporation since its inception. Mr. Blundell, a member of the
Committee was the Corporation's Chief Executive Officer and Chief Financial
Officer during the fiscal year ended March 31, 2000 and since inception. Mr.
Blundell does not vote on matters concerning his own compensation.
Mr. Taylor has been a Director of the Company since April 1996.
In addition, there are no transactions, relationships or indebtedness for which
disclosure is required under the rules of the Securities and Exchange Commission
with respect to any
member of the Committee.
CERTAIN TRANSACTIONS
The following is a discussion of certain transactions entered into by the
Corporation with officers, directors, security holders and affiliates thereof.
The Corporation believes that the terms of these transactions were no less
favorable to the Corporation than would have been obtained from a non-affiliated
third party for similar transactions at the time of entering into such
transactions.
The Corporation has adopted a policy whereby any future transactions between the
Corporation and its directors, officers, principal shareholders and other
affiliates, will be on terms no less favorable to the Corporation than could be
obtained from unaffiliated third persons on an arm's-length basis at the time
that the transaction was entered into and will be reviewed and approved by a
majority of the Corporation's directors, including a majority of the
Corporation's independent disinterested directors.
Other Transactions
On September 1, 1995 the Company entered into a consulting contract with
Corporate Growth Services, a corporation owned by Mr. Gordon, Chairman of the
Board of Directors. Corporate Growth Services provides small development stage
companies with management consulting. Under the terms of the contract Corporate
Growth Services receives a consulting fee of $2,000 per month over and above any
fees Mr. Gordon receives for attending meetings of the Board of Directors. In
view of the Company's financial position Corporate Growth Services has agreed to
waive these fees until further notice. In the fiscal year ended March 31, 1998
Corporate Growth Services received $24,000 in such fees. No such fees were paid
in the fiscal years ended March 31, 1999and 2000.
Loan from Mr. Robert Trump
In early January 1997, in order to continue operating, the Company solicited a
$150,000 loan from Mr. Robert Trump, which was received on January 16, 1997.
The principal terms of this loan were as follows:
<TABLE>
<CAPTION>
Loan: $150,000.
<S> <C>
Terms: 6 months
Interest rate: To be paid in warrants, see below.
150,000 three-year warrants with an exercise price of $2.00 per share, in
Warrants: lieu of interest.
The 180,000 Midland Warrants, held by Midland Associates, an affiliate of
Mr. Trump, were amended as follows: The expiration date was changed
from August 11, 1998 to January 16, 2002 and the exercise price reduced
from $3.75 to $2.00 per share. The exercise price on 25,000 of the Midland
warrants was reduced to $1.00. Midland exercised these warrants to acquire
Other terms: 25,000 shares of common stock in September of 1999.
</TABLE>
Series C Redeemable Preferred Stock
On March 13, 1997, Mr. Robert Trump agreed to lend the Company a further
$50,000, which the Company urgently required in order to continue its operations
and meet its payroll obligations. The January 16, 1997 $150,000 loan and the
March 13, 1997 $50,000 loan were combined into $200,000 to be used to subscribe
for 800,000 shares of Series C Redeemable Preferred Stock, $0.01 par value, with
the following principal terms:
Each Series C Redeemable Preferred Share had four (4) votes on any matter to be
put to a vote of the Company's shareholders.
The Series C Redeemable Preferred Stock could be redeemed at the Company's
option at any time upon payment of $200,000.
The Series C Redeemable Preferred Stock could be redeemed at the holder's option
following any investment in the Company or a sale of any of the Company's assets
where the proceeds are $2,000,000 or more. The Series C Redeemable Preferred
Stock had preference in the event of any liquidation of the Company to the
extent of $200,000.
The Series C Redeemable Preferred Stock was redeemed by the Company from the
proceeds of the sale of COPERNICUS to VIE Systems.
2. AMENDMENT OF THE CORPORATION'S CERTIFICATE OF INCORPORATION TO CHANGE THE
NAME OF THE COPORATION
The name of the Corporation is stated in its certificate of incorporation. The
name of the Corporation can be changed by amending its certificate of
incorporation and filing such amendment with the New York State Secretary of
State.
Under Section 803(a) of the New York State Business Corporation Law ("BCL"),
amendments or changes to the Company's certificate of incorporation may be
authorized by the Board of Directors, followed by vote of a majority of all
outstanding shares entitled to vote thereon at a meeting of shareholders.
The Corporation was originally formed to develop and market certain software
products. It was named New Paradigm Software Corporation to reflect the nature
of its main business, software development. From its creation in 1993 to the
date of the sale of its Copernicus software product in 1998, the Corporation
pursued its original objectives.
Following the sale of the Corporation's main software product, Copernicus to VIE
Systems, Inc., the Corporation re-positioned itself as an Internet
communications business. It developed Internet capabilities through its wholly
owned subsidiary New Paradigm Interlink, Inc., and acquired certain assets and
assumed certain liabilities of (1) Kapelus & Cipriano, Inc., a Westchester, New
York, based advertising agency, and of (2) Sutton & Partners, Inc., a
Connecticut based advertising Agency, to establish its advertising business.
The Corporation also acquired certain assets and assumed certain liabilities of
GMG Public Relations, Inc, to establish its public relations business.
The combination of Internet, public relations and advertising capabilities
position the Corporation as a strategic communications service provider.
Accordingly, the Board recommends that the Corporation be re-named New Paradigm
Strategic Communications, Inc. to accurately reflect the business it is engaged
in.
Article One of the Corporation's certificate of incorporation currently reads as
follows:
"The name of the corporation is New Paradigm Software Corp."
The effect of the following resolution will be to strike out the existing
Article One of the Corporation's certificate of incorporation and to substitute
the following new Article One:
"The name of the corporation is New Paradigm Strategic Communications, Inc."
The following resolution will be offered by the Board of Directors at the Annual
Meeting:
RESOLVED, that the Corporation's certificate of incorporation be amended by
striking out Article One thereof and by substituting in lieu of said Article the
following new Article One:
The name of the corporation is New Paradigm Strategic Communications, Inc.
THE BOARD OF DIRECTORS' RECOMMENDATION
Your Board recommends that you vote FOR this resolution. Unless otherwise
specified by the shareholder, the Board intends the accompanying proxy to be
voted for this resolution.
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
During the year ended March 31, 2000, Goldstein & Morris, LLP audited the
consolidated financial statements of the Corporation and its subsidiaries.
The Board of Directors, after receiving a favorable recommendation from the
Audit Committee, has again selected Goldstein & Morris, LLP to serve as the
Corporation's independent certified public accountants for the fiscal year
ending March 31, 2001. Although not required to do so, the Board is submitting
the selection of this firm for ratification by the Corporation's shareholders to
ascertain their views. Should shareholders vote against the ratification of
Goldstein & Morris, LLP as independent certified public accountants the audit
committee will select a different certified public accountant for this role.
Goldstein & Morris, LLP has advised the Corporation that it has no direct, nor
any material indirect, financial interest in the Corporation or any of its
subsidiaries. A representative of Goldstein & Morris, LLP is expected to be
present at the Annual Meeting with the opportunity to make a statement if the
representative desires to do so, and such representative will be available to
respond to appropriate questions.
The following resolution will be offered by the Board of Directors at the Annual
Meeting:
RESOLVED: That the selection by the Board of Directors of Goldstein &
Morris, LLP as independent certified public accountants for this Corporation and
its subsidiaries for the year ended March 31, 2001 be, and hereby is, ratified
and approved.
The approval by a majority of the votes cast at the Annual Meeting on the
proposal to ratify the appointment of Goldtein & Morris, LLP as the independent
certified public accountants of the Corporation is required to adopt the
proposal.
THE BOARD OF DIRECTORS' RECOMMENDATION
Your Board recommends that you vote FOR this resolution. Unless otherwise
specified by the shareholder, the Board intends the accompanying proxy to be
voted for this resolution.
4. OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the Annual
Meeting. However, if other matters should properly come before the Annual
Meeting, it is the intention of those named in the solicited proxy to vote such
proxy in accordance with their best judgment.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 ("Section 16(a)") requires
the Company's directors, executive officers, and persons who own more than 10%
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission reports on Forms 3, 4 and 5 concerning their
ownership of the Common Stock and other equity securities of the Company.
Based solely on the Company's review of copies of such reports and written
representations that no other reports were required, the Company believes that
all its officers, directors and greater than ten percent beneficial owners
complied with all filing requirements applicable to them during the fiscal year
ended March 31, 2000.
SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals may be submitted for inclusion in the Corporation's proxy
statement and form of proxy for the 2001 Annual Meeting of Shareholders.
Shareholders wishing to have a proposal included in the Corporation's proxy
materials must comply with the applicable requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder and shall have the
rights provided by Rule 14a-8 under such Act. In order to be eligible under Rule
14a-8 for inclusion in the Corporation's proxy statement and accompanying proxy
for the 2001 Annual Meeting of Shareholders, shareholder proposals must be
received by the Corporation on or before April 18, 2001. Any such proposal
should be submitted in writing by notice delivered or mailed, postage prepaid,
to the Secretary of the Corporation, 630 Third Avenue, 15th Floor, New York, New
York 10017.
SHAREHOLDER NOMINATION OF DIRECTORS
The Corporation's By-Laws contain procedures for shareholder nomination of
directors and for other shareholder proposals to be presented before annual and
other shareholder meetings. The By-Laws provide that nominations of persons for
election to the Board of Directors of the Corporation may be made at an annual
meeting of shareholders or at a special meeting of shareholders for which notice
of an election of a director or directors has been duly given by any shareholder
of the Corporation entitled to vote for election of directors at the meeting who
complies with the notice procedures described below. Such nominations may be
made only pursuant to timely notice in proper written form to the Secretary of
the Corporation. To be timely, a shareholder's request to nominate a person for
director, together with the written consent of such person to serve as director,
must be received by the Secretary of the Corporation before the close of
business on the eighth day following the day on which notice of such meeting is
given to shareholders. To be in proper written form, such shareholder's notice
shall set forth in writing (a) as to each person whom the shareholder proposes
to nominate for election or re-election as a director (1) the name, age,
business address and residence address for such person, (2) the principal
occupation or employment of such person, (3) the class and number of shares of
stock of the Corporation that are beneficially owned by such person, and (4)
such other information relating to such person as is required to be disclosed in
solicitations of proxies for election of directors, or as otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934
and any successor to such Regulation; and (b) as to the shareholder giving the
notice (1) the name and address, as they appear on the Corporation's books, of
such shareholder, (2) the class and number of shares of stock of the Corporation
that are beneficially owned by such shareholder, and (3) a representation that
the shareholder is a holder of record of stock of the Corporation entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice. The Corporation may
require any proposed nominee to furnish such other information as may reasonably
be required by the Corporation to determine the eligibility of such proposed
nominee to serve as a director of the Corporation or the shareholder to nominate
the proposed nominee.
With respect to shareholder proposals or other business to be considered at an
annual or other meeting of shareholders, the By-Laws provide that in addition to
any other applicable requirements for business to be properly brought before a
meeting by a shareholder, the shareholder must have given timely notice thereof
in writing to the Secretary of the Corporation. To be timely, a shareholder's
notice must be delivered to or mailed and received at the principal executive
offices of the Corporation, not less than 90 days prior to the meeting. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the meeting (1) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting, (2) the name and record address of the shareholder
proposing such business, (3) the class and number of shares of the Corporation
that are beneficially owned by the shareholder, and (4) any material interest of
the shareholder in such business. In addition, any such shareholder shall be
required to provide such further information as may be requested by the
Corporation in advance to comply with federal securities laws, rules and
regulations. The Corporation may require evidence by any person giving such
notice that such person is a bona fide beneficial owner of the Corporation's
stock.
A copy of the By-Laws is available upon request to the Secretary of the
Corporation, 630 Third Avenue, 15th Floor, New York, New York 10017. The person
presiding at the meeting is authorized to determine if a proposed matter is
properly before the meeting if a nomination is properly made. The procedures for
shareholder nominations of directors and proposal of other business described
above may have the effect of precluding a nomination for election of a director
or directors or proposal of other business at a particular meeting if the
required procedure is not followed.
Exhibits also may be requested, but a charge equal to the reproduction cost
thereof will be made.
By Order of the Board of Directors
Michael S. Taylor
Secretary
New York, New York
------------------, 2000
NEW PARADIGM SOFTWARE CORP. PROXY FOR ANNUAL MEETING OF SHAREHOLDERS THURSDAY,
NOVEMBER 16, 2000 SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Mark A. Blundell, Daniel A. Gordon and Michael
S. Taylor proxies, with power of substitution, to vote at the Annual Meeting of
Shareholders of New Paradigm Software Corp. to be held at 11:30 A.M. on November
16, 2000, at the New York Yacht Club, 37 West 44th Street, New York, New York,
and at any adjournment thereof, on the matters referred to below and described
in the accompanying Proxy Statement, and on any other business before the
meeting, with all powers the undersigned would possess if personally present. A
majority (or, if only one, then that one) of the proxies or their substitutes
acting at the meeting may exercise all powers hereby conferred.
PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE AND RETURN
THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
[ X ] PLEASE MARK YOUR VOTES LIKE THIS
THIS PROXY WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER. IF NOT OTHERWISE
SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSALS 2 AND 3.
The Board of Directors recommends a vote FOR all nominees in Item 1, and a vote
FOR Proposals 2&3:
1. Election of Mark A. Blundell, Daniel A. Gordon, and Michael S. Taylor as
directors for a term expiring at the next Annual Meeting:
FOR THE WITHHOLD AUTHORITY
PROPOSED to vote for the proposed
NOMINEES nominees
[ ] [ ]
INSTRUCTION: To withhold authority to vote for any individual proposed
nominee(s) write that proposed nominee's name below.
___________________________________________________
2. Approve the amendment of the Corporation's certificate of incorporation
to change of the name of the Corporation from New Paradigm Software Corp. to New
Paradigm Strategic Communications, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Ratification of the appointment of Goldstein & Morris, LLP as independent
public accountants for the fiscal year ending March 31, 2001:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. And, in their discretion, in the transaction of such other business as
may properly come before the Annual Meeting.
Signature(s)
Date
NOTE: Please sign exactly as your name appears on this card, date this card and
return it in the enclosed envelope.
