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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14f-1
PURSUANT TO
SECTION 14(f) OF THE
SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 THEREUNDER
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SUITE101.COM, INC.
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(Name of Subject Company)
Common Stock, par value $.001 per share
(Title of Class of Securities)
865073100
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(CUSIP Number of Class of Securities)
Peter L. Bradshaw
Chairman of the Board and Chief Executive Officer
1122 Mainland Street - Suite 210
Vancouver, BC, Canada V6B 5L1
(604) 682-1400
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
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With a copy to:
William S. Clarke, P.A.
457 North Harrison Street - Suite 103
Princeton, NJ 08540
(609) 921-3663
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SUITE101.COM, INC.
1122 Mainland Street - Suite 210
Vancouver, British Columbia, Canada V6B 5L1
INFORMATION STATEMENT PURSUANT TO SECTION 14(F) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND RULE 14f-1 THEREUNDER
This Information Statement (the "Information Statement") relates to
Suite101.com, Inc., a Delaware corporation (the "Company"), and the election, on
or about February 25, 2002, of three persons to the Company's Board of
Directors. Concurrently, with the election of the three persons to the Company's
Board of Directors, two of the Company's existing three Directors will resign.
Accordingly, the three persons to be elected will constitute three of the four
persons on the Company's Board of Directors. No action is required by the
stockholders of the Company with respect to the election of the Directors.
Nevertheless, we urge you to read this Information Statement carefully.
This Information Statement is being mailed on or about February 14,
2002 to the holders of record of the Company's common stock at the close of
business on February 8, 2002, pursuant to the requirements of Section 14(f) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule
14f-1 adopted thereunder. On February 8, 2002, there were 13,207,462 shares of
the Company's common stock, par value $0.001 per share, (the "Common Stock")
outstanding. Each share is entitled to one vote.
NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS REQUIRED IN
CONNECTION WITH THIS INFORMATION STATEMENT. WE ARE NOT ASKING FOR A PROXY AND
REQUEST THAT YOU NOT SEND US A PROXY.
February 14, 2002
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RECENT DEVELOPMENTS
Background. The Company has been engaged, since early 1999, in efforts
to develop a World Wide Web-based directory and on-line publishing community.
Since early 1999, using approximately $6.1 million out of total proceeds of $9.5
million raised in private sales of its securities in 1999 and 2000, the Company
has endeavored to develop its activities into revenue generating operations.
During the period January 1, 1999 through December 31, 2001, the Company's total
revenues were $43,600 and its available cash had fallen from $9,321,525 at the
end of March 2000 to $4,048,629 at the end of December 2001. Also, since 1999,
there have been enormous changes in the stock market's perception of the
likelihood of success for Internet-based enterprises which has affected
substantially the Company's ability to raise capital and achieve its business
objectives. Accordingly, by unanimous action of its Board of Directors taken in
the fourth quarter of 2001, the Company determined to review its business
activities with a view to redirecting those activities.
On December 21, 2001, the Company announced in a press release dated
that date that its Board of Directors was engaged in a review of the Company's
activities with a view to the possible redirection of its operations in an
effort to enhance and maximize shareholder values. It stated that no definitive
agreements had been entered into at that time.
On January 8, 2002, the Company issued a further press release dated
that date and stated that in furtherance of its previously announced efforts to
re-direct the Company's operations under consideration by its Board of
Directors, it was inviting companies and other persons with a possible strategic
interest in Suite101 to consider entering into discussions with the Company
looking to a possible business combination, restructuring or other
reorganization transaction. The Company stated that it was seeking initial
responses on or before January 25, 2002.
The Company also announced in the January 8, 2002 press release that in
conjunction with its efforts to re-direct its operations, it had reduced its
staff by five people to 14 employees and had revised its monthly compensation
arrangements with its approximately 1,000 Contributing Editors on its editorial
team. Previously, the Contributing Editors had received compensation of up to
$25 per month, based on the number of articles written. As of December 31, 2001,
the Company terminated the payment of the monthly compensation to Contributing
Editors. The Company continues to compensate its Managing Editors and Senior
Managing Editors. The Company further stated that as its management continued
its efforts to re-direct its activities, further changes in staffing and
compensation arrangements may be made.
The Company stated on January 8, 2002 that it believed that the changes
made in its staffing and compensation arrangements were appropriate in the light
of the Company's limited revenues and that those changes would enhance its
ability to enter into a business combination or
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other restructuring transaction by reducing current levels of overhead. The
Company also stated that its management believes that these revised compensation
arrangements are in line with current practices of other Internet communities.
Since January 8, 2002, the Company has further reduced its staff and
currently its only employees are Peter Bradshaw, its Chairman and chief
executive officer, Julia Bradshaw, an employee and Director, and Cara Williams,
its chief financial officer. In addition, subject to approval of the Company's
Board of Directors, the Company has agreed with Creative Marketeam Canada Ltd.
("Marketeam"), a corporation wholly owned by the Company's former chief
operating officer, to provide continuing management and operating services, at
Marketeam's expense, over the day-to-day operations of the Suite101 Web site,
known as Suite101.com.
In response to the Company's press release dated January 8, 2002, which
was supplemented by correspondence and personal contacts with senior executive
officers at approximately ten (10) corporations and other entities that
management believed may have an interest in entering into a strategic business
combination or other similar transaction or relationship with the Company, the
Company received two responses, further described below, that management
believed merited further discussions. One response involved an interest
expressed on behalf of a group of persons interested in acquiring 1,625,617
million of the shares of the Company's common stock held by Mr. Bradshaw and his
daughter, Julia Bradshaw and having representation on the Company's Board of
Directors. The second response was from a corporation interested in acquiring an
option to purchase the assets of the Suite101 Web site, known as Suite101.com.
The Management Agreement. The management agreement between Marketeam
and the Company is for an initial one-month period commencing January 31, 2002
and continues from month to month thereafter until terminated by either party on
ten (10) days' notice. In consideration of the services to be performed by
Marketeam, the Company will pay Marketeam a fee of $26,000 per month, plus an
amount equal to the Company's receipts from its contracts with
BarnesandNoble.Com, LLC. Marketeam is to provide continuing management and
operating services, at its expense, over the day-to-day operations of the
Suite101 Web site. It is responsible to the Board of Directors of the Company
for all phases of the day-to-day management and operations of the Suite101 Web
site, including accounting and bookkeeping, making payments at its expense to
Senior and Managing Editors, providing administration, oversight and fulfillment
of Company's duties and responsibilities under its agreements with
BarnesandNoble.Com, LLC, providing Internet access to the Web site, hosting
email, property maintenance, providing postage, implementing software upgrades,
and arranging intellectual property licensing, among other matters. Marketeam is
responsible for the implementation, management and operation of such aspects of
any programs relating to the planning, operation,
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management and control of the Suite101.com Web site as are necessary to the
continuing uninterrupted operation of the Suite101.com Web site. The agreement
prohibits Marketeam from (i) negotiating or entering into any agreements
regarding the issuance of any capital stock of the Company, the sale of any of
its assets or any transaction involving any merger, consolidation or business
combination involving Suite101, (ii) negotiating or entering into any employment
agreements relating to the employment of any person as an employee, consultant
or other provider of services to the Company, (iii) negotiating or entering into
any agreement relating to any purchase or lease of personal or real property by
the Company, (iv) negotiating or entering into any agreements relating to the
expenditure of any money by the Company, or (v) representing to any person that
it or any of its officers or employees are authorized to enter into any
agreement on behalf of the Company or make any commitment involving the Company.
The agreement contains provisions prohibiting Marketeam from disclosing any
confidential information of the Company, engaging in business in competition
with the Company unless expressly authorized in writing by the Company's Board
of Directors, and requiring Marketeam to keep segregated and apart the assets of
the Company and preserve its Web site assets for the purpose of facilitating and
enhancing the sale of those assets. Employees of Marketeam are required to agree
to similar restrictions on their activities. The agreement provides that the
Company has no liability for any of the debts or obligations of Marketeam, and
Marketeam will indemnify the Company against loss for actions its personnel take
in violation of the agreement.
The Bradshaw Agreements. Since the summer of 2001, Peter Bradshaw and
Julia Bradshaw have been in discussions with a group of investors regarding such
persons' interest in purchasing a substantial number of their shares. On
February 13, 2002, Peter Bradshaw and Julie Bradshaw entered into agreements to
sell, at a price of $0.25 per share, an aggregate of 1,625,617 of their shares
of Common Stock. The purchasers of the shares are four investors none of whom
acquired more than five percent of the shares of the Company outstanding and
none of whom are residents of the United States. The shares to be sold include
all of the shares held by Peter Bradshaw, other than options to purchase 418,545
shares exercisable at prices ranging from $0.25 to $1.50 per share. Julie
Bradshaw will retain 618,519 shares and options to purchase 85,000 shares
exercisable at $1.50 per share. The parties to the agreements understand that
concurrently with the sale of the shares, Peter Bradshaw and Julie Bradshaw will
resign as Directors, and Peter Bradshaw will resign as the Chairman and Chief
Executive Officer.
Concurrently with the resignations of Mr. Bradshaw and Ms. Bradshaw,
three persons, identified below, will be elected to the Board of Directors to
fill the vacancies created by the resignations. The closing of the sale of the
shares, the resignations of Mr. Bradshaw and Ms. Bradshaw, and the election of
the three new Directors will all occur on the 11th day following the date on
which this Information Statement is mailed to the stockholders of the Company.
Accordingly, it is expected that the closing of the sale of the shares, the
resignations of two Directors and the election of three new Directors will all
occur on February 25, 2002.
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The Company's Board of Directors has been advised by the purchasers of
the shares that it is intended to continue the present efforts to seek to
redirect the Company's efforts into other business activities. The Company's
Board of Directors understands that these activities are expected to be
unrelated to the operation of a Web-based community or Web site. As of the date
of this Information Statement, there are no definitive agreements or agreements
in principal relating to the acquisition of any other business activities by the
Company and management is unable to state the nature of the business activities
that may be undertaken in the future. It is expected that the redirection of the
Company's business activities will involve it in a business combination or other
material transaction. The Company's Board of Directors has not been advised by
the purchasers of the Bradshaw shares of any specific industries or businesses
that may be the subject of the efforts to redirect the Company's operations.
The efforts in the redirection of the Company's activities will involve
the following, among other risks and uncertainties:
o the Company will continue to have no source of material
revenues and will continue to expend its cash resources
maintaining its current activities and seeking to enter into
a transaction resulting in the redirection of its business
activities,
o any such transaction may involve an acquisition resulting in
the issuance of a material amount of the Company's shares of
common stock and be dilutive to the Company's existing
stockholders,
o any transaction entered into may require that the Company
raise additional capital which may also involve the issuance
of shares of the Company's common stock and be dilutive to
the Company's existing stockholders,
o the transaction entered into may be structured on terms
whereby the approval of the Company's existing stockholders
is not required which would result in the Company's existing
stockholders being unable to vote in favor of or against the
transaction and the redirection of the Company's business
activities,
o there can be no assurance the Company will be successful in
identifying any new business activities to pursue, that any
such transaction can be consummated, that any such
transaction will be concluded on favorable terms, that the
Company's business activities will be successfully
redirected, that the Company will realize any material
revenues from the business activity into which its efforts
are redirected, or that any such redirected business
activities will be successful, and
o the Company has authorized under its Certificate of
Incorporation 40,000,000 shares of common stock and 1,000,000
shares of preferred stock, of which,
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as of February 8, 2002, 13,207,462 shares of common stock are
issued and outstanding. The 26,792,538 shares of common stock
and 1,000,000 shares of preferred stock that are authorized
but are not issued or outstanding are able to be issued by
action of the Company's Board of Directors in a transaction
resulting in the redirection of the Company's activities
without any requirement of further action being taken by the
Company's stockholders to authorize the issuance of the
shares or to approve the transaction or the redirected
business activities.
As a consequence of the sale of the shares by the Bradshaws and their
resignations as Directors, a change of control of the Company may be deemed to
occur.
Possible Transaction Involving Web Site Assets. The Company continues
to own the assets related to the operation and maintenance of its World Wide
Web-based directory and on-line publishing community. These assets, which
include primarily the Company's property, plant and equipment, as of September
30, 2001, had a book value of $132,000, after accumulated amortization of
$118,000. During the two years and nine months ended September 30, 2001, these
assets produced revenues of $1,925, $1,620 and $12,043, respectively. During the
two years and nine months ended September 30, 2001, the Company had other
income, net, which was primarily interest income, of $146,000, $378,000 and
$167,000, respectively.
As described above, by January 8, 2002, the Company had reduced its
staff from 14 employees at December 31, 2001 to three persons. These staff
reductions were undertaken to reduce the Company's levels of overhead and to
enhance its ability to redirect its business activities.
In response to its invitation of January 8, 2002 seeking persons who
may have a strategic interest in the Company's Web site activities, the Company
has been engaged in on-going negotiations with an unaffiliated privately-owned
entity that has expressed an interest in acquiring an option to acquire the Web
site assets. No definitive agreements have been entered into and the
negotiations are continuing. At present, the terms of the transaction would
involve a 60-day option to purchase the Web site assets for a total purchase
price, including the option price, of $155,000. In exchange, the Company would
receive a 26% equity interest in the entity acquiring the assets and a 5% equity
interest in the acquiror's parent corporation. In addition, the Company would be
required to invest $155,000 in the acquiror. There can be no assurance that this
or any other agreement involving the Company's Web site assets will be
concluded.
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ELECTION OF THREE DIRECTORS
ELECTION OF PRESIDENT
Upon the closing of the sale of the shares by Peter Bradshaw and Julia
Bradshaw on or about February 25, 2002, Mr. Bradshaw and Ms. Bradshaw intend to
resign as Directors. At the same time, it is intended that Douglas Loblaw, John
Campbell and Brent Peters will be elected Directors of the Company. Mr. Bradshaw
also intends to resign as President of the Company, and it is intended that
Mitchell G. Blumberg, currently an existing member of the Board and the
Secretary of the Company, will be elected in his place as President. At that
time, Messrs. Loblaw, Campbell, Peters, and Blumberg will constitute all of the
members of the Company's Board of Directors and will serve until the annual
meeting of stockholders in 2002 and their successors are duly elected and
qualified. It is currently expected that the Company's 2002 annual meeting of
stockholders will be held in June 2002.
The following table sets forth the name, present principal occupation
or employment, five-year employment history and certain other information
concerning the three individuals who will be elected to the Company's Board of
Directors. The respective persons intended to be elected as Directors provided
this information to the Company.
NAME AGE EMPLOYMENT HISTORY
----------------- --- -----------------------------------------------------
Douglas Loblaw 61 Mr. Loblaw has been employed as Chief Operating
Officer of the Company since January 2001 and from
June to December 2000, he was employed by the Company
as Director of Operations. He has been employed by
Capilano College as an instructor since 1976.
Commencing January 1995 to the present, he has been
employed as a tutor for the B.C. Open College. Since
January 1994, Creative Marketeam Canada Ltd. has
engaged him as a marketing consultant. He received a
BA degree from the University of Toronto with a major
in French Language and Literature.
John Campbell 68 Mr. Campbell has been President of Transamerica
Industries Ltd., a natural resource company, for more
than the past five years. He is a former practicing
lawyer.
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NAME AGE EMPLOYMENT HISTORY
----------------- --- -----------------------------------------------------
Brent Peters 29 Mr. Peters has been Vice President of Finance and
Treasurer of Northfield Capital Corporation, a
publicly traded investment company acquiring shares
in public and private corporations since 1997. He is
a director of Cubacan Exploration Inc., Konexus
Technologies Limited (formerly Dotcom 2000 Inc.), and
Endeavor Resources Inc. Mr. Peters has a Bachelor of
Business Administration degree, specializing in
accounting.
Mr. Loblaw has been requested to serve on the Company's Board of
Directors at the request of the Company's existing Board of Directors. Messrs.
Campbell and Peters have been requested to serve on the Board of Directors by
the purchasers of the Bradshaws' shares.
CURRENT DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The Company's Board of Directors currently has three members, elected
at the Company's Annual Meeting of Stockholders held on June 4, 2001. Such
Directors were elected to serve until the Company's next Annual Meeting of
Stockholders, to be held in 2002, and the election and qualification of their
successors. The Company's Directors currently are:
Name Age
---- ---
Peter L. Bradshaw 67
Julia M. Bradshaw 38
Mitchell G. Blumberg 58
Mr. Bradshaw, a co-founder of i5ive communications, inc. ("i5ive"), the
outstanding stock of which was acquired by the Company on December 10, 1998, has
been the Chairman of the Board, Chief Executive Officer and a Director of the
Company since December 10, 1998 and
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of i5ive since April 1996. From April 1993 to April 1996, he was a Director of
Mobile Data Solutions, Inc. ("MDSI"), including Chairman of the Board from April
1993 to December 1995. MDSI develops and markets computer aided mobile
(wireless) resource management software. Its shares of common stock are traded
on the Nasdaq SmallCap Market. From May 1998 to August 1998, he was Chief
Executive Officer and from July 1997 to the present, he has been Chairman of the
Board of eDispatch.com Wireless Data, Inc (formerly Instep Mobile
Communications, Inc.) ("eDispatch.com"), which also develops and markets
computer aided mobile (wireless) resource management software. Commencing
December 18, 2000 until September 28, 2001, he was reappointed President and
Chief Executive Officer of eDispatch.com. Currently, he continues as Chairman of
the Board of eDispatch. Commencing in September 1996 through January 1998, he
was Director of Unitec International Controls Corp. Commencing in 1992 through
December 1995, he was Chairman of the Board and Chief Executive Officer of
TeleSoft Mobile Data, Inc., a venture capital firm investing in enterprises
utilizing wireless data protocol. Mr. Bradshaw has a B.Com. Degree in Commerce
and a major in History from the University of British Columbia. Mr. Bradshaw is
the father of Julia M. Bradshaw.
Ms. Bradshaw, a co-founder of i5ive, has been a Director of the Company
since December 10, 1998. She has been a Director of i5ive since April 1996.
Prior to April 1996, she attended the University of Paris, Sorbonne and the
University of British Columbia. In 1992, Ms. Bradshaw earned her B.A. degree
from the University of British Columbia with a major in French Literature. Ms.
Bradshaw is the daughter of Peter L. Bradshaw.
Mr. Blumberg was elected a Director of the Company in February 1999. He
has been, since June 1994, engaged as a film producer and talent manager in Los
Angeles, California, initially with Blumberg Productions, and currently with
Blumberg Productions + Management. Prior to June 1994, he was an Executive Vice
President of RKO Pictures, Inc. Mr. Blumberg is also a Director of
eDispatch.com. Mr. Blumberg holds undergraduate and law degrees from the
University of Pennsylvania and an MBA degree from Harvard University.
Resignation as a Director of Alfred J. Puchala, Jr. Mr. Alfred J.
Puchala, Jr. was elected a Director of the Company in April 1999 and was
re-elected and continued to serve as a Director until February 13, 2002 when he
resigned. Mr. Puchala is a Managing Director of Signal Equity Partners, LLC, a
position he has held since April 1996. From April 1989 to April 1996, he was
employed by Lazard Freres & Co. LLC, most recently as a Vice President. Mr.
Puchala has a BA degree from Yale University, a JD degree from Georgetown
University and a M. Econ. degree from New York University.
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EXECUTIVE OFFICERS
The current executive officers of the Company are the following:
NAME AGE POSITION
---- --- --------
Peter L. Bradshaw 67 Chairman of the Board and Chief Executive Officer
Cara Williams 38 Vice President, Finance
Mr. Bradshaw's employment background is described above.
Ms. Williams has been employed as Vice President, Finance and principal
accounting officer of the Company since April 2000. She is a Chartered
Accountant. She was employed by PricewaterhouseCoopers LLP from October 1997 to
March 2000 and by Ellis Foster, Chartered Accountants, from February 1993 to
September 1997. She received a BBA degree with a major in accounting from Simon
Fraser University in 1987.
Mr. Loblaw was employed by the Company as its Chief Operating Officer
through January 31, 2002. His employment background is described above.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
Board of Directors. The Company's Board of Directors held three
meetings during the year ended December 31, 2001. Each of the Company's
Directors participated in all of the meetings of the Board and of each committee
of the board of which he or she is a member.
Audit Committee. Messrs. Bradshaw, Blumberg and Puchala constituted the
Audit Committee of the Company's Board of Directors during the year 2001. Mr.
Puchala resigned as a Director and a member of the Audit Committee on February
13, 2002. The Audit Committee, among other things, meets with the Company's
independent accountants to review the Company's accounting policies, internal
controls and other accounting and auditing matters; makes recommendations to the
Board of Directors as to the engagement of independent accountants; and reviews
the letter of engagement and statement of fees relating to the scope of the
annual audit and special audit work which may be recommended or required by the
independent accountants. The Audit Committee met two (2) times during the year
ended
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December 31, 2001. Each of Messrs. Blumberg and Puchala was, during the year
2001, in the opinion of the Company's Board of Directors, an "independent
director," as that term is defined under the Rules relating to the NASDAQ Stock
Market. The Company's Audit Committee has a charter which describes the nature
and scope of the duties and responsibilities of the Audit Committee. The charter
was included as an attachment to the Company's proxy statement dated May 2, 2001
relating to its 2001 annual meeting of stockholders.
It is expected that the membership of the Company's Audit Committee
will be reconstituted following the election of the three new Directors.
LEGAL PROCEEDINGS
No Director, officer, affiliate or person known to the Company to be
the record or beneficial owner of in excess of 5% of the shares of the Company's
common stock, or any person known to the Company to be an associate of any of
the foregoing, is a party adverse to the Company or has a material interest
adverse to the Company in any material pending legal proceedings.
SUBMISSION OF SHAREHOLDERS' PROPOSALS FOR 2002 ANNUAL MEETING
Any proposals which shareholders intend to present for a vote of
shareholders at the Company's 2002 Annual Meeting and which such shareholders
desire to have included in the Company's proxy statement and form of proxy
relating to that meeting was required to be sent to the Company's executive
office and received by the Company not later than January 2, 2002.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
The following table sets forth the annual and long-term compensation
paid during the Company's three fiscal years ended December 31, 2001 to the
Company's chief executive officer. No executive officer received compensation
exceeding $100,000 for serving in such capacity at December 31, 2001:
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SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
COMPENSATION
---------------------------------
OTHER LONG-TERM ALL OTHER
NAME AND ANNUAL ANNUAL AWARDS/ OPTION (#) COMP.
PRINCIPAL POSITION YEAR SALARY BONUS COMP.
Peter L. Bradshaw 1999 $57,000(1) $700 Nil 120,000 shares Nil
2000 $113,000(2) $700 Nil 150,000 shares Nil
2001 $114,000(3) Nil Nil 148,545 shares Nil
(1) In lieu of $16,150 salary, Mr. Bradshaw was granted options to purchase
40,000 shares exercisable at $1.50 per share.
(2) In lieu of $16,150 salary, Mr. Bradshaw was granted options to purchase
40,000 shares exercisable at $1.50 per share.
(3) In lieu of $32,000 salary, Mr. Bradshaw was granted options to purchase
254,545 shares exercisable at $0.25 per share.
OPTION GRANTS IN YEAR ENDED DECEMBER 31, 2001.
The following table provides information with respect to the above
named executive officer regarding options granted to such person during the
Company's year ended December 31, 2001.
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/ EXERCISE
UNDERLYING SARS OR MARKET
SARS/ GRANTED TO BASE PRICE ON
OPTIONS EMPLOYEES IN PRICE EXPIRATION DATE OF
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE GRANT
----------------- ------------ ------------ ---------- --------------- --------
Peter L. Bradshaw 148,545(1) 46.4% $0.25 January 4, 2006 $0.2031
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-----------------------
(1) Of which, options to purchase 74,273 shares became exercisable on January
4, 2001 and options to purchase the remaining 74,272 shares became
exercisable on January 4, 2002.
STOCK OPTION HOLDINGS AT DECEMBER 31, 2001.
The following table provides information with respect to the above
named executive officer regarding Company options held at the end of the
Company's year ended December 31, 2001 (such officer did not exercise any
options during the most recent fiscal year).
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 2001(1) AT DECEMBER 31, 2001(2)
----------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------ ----------- ------------- ----------- -------------
Peter L. Bradshaw 344,273 74,272(3) Nil Nil
------------------
(1) The options are exercisable at prices ranging from $0.25 to $1.50 per
share.
(2) Based on the closing sales price on December 31, 2001 of $0.21.
(3) This option became exercisable on January 4, 2002.
DIRECTORS' COMPENSATION
The Company's Directors do not receive any cash compensation for
serving in that capacity; however, they are reimbursed for their out-of-pocket
expenses in attending meetings. Pursuant to the terms of the Company's 1998
Stock Incentive Plan, each non-employee Director automatically receives an
option grant for 50,000 shares on the date such person joins the Board. In
addition, on the date of each annual stockholder meeting, each non-employee
Board member who is to continue to serve as a non-employee Board member is
automatically granted an option to purchase 5,000 shares. Each such option is
exercisable at the fair market value of the Company's Common Stock on the date
of grant and has a term of ten (10) years, subject to earlier termination
following such person's cessation of Board service and subject to certain
vesting provisions.
The Company entered into a service contract with Mr. Blumberg in May
1999. Pursuant to this service contract $30,000 was paid to him during 2000 and
$40,000 was paid to him in 1999. This contract ended in June 2000 and was not
renewed.
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CHANGE OF CONTROL ARRANGEMENTS
Mr. Bradshaw is a party to an employment agreement with the Company
dated August 1, 1999 and continuing from year to year thereafter unless
terminated by the Company at any time on 60 days' notice or by Mr. Bradshaw at
any time on 30 days' notice. Mr. Bradshaw is currently employed under the
agreement as the Company's President and Chief Executive Officer and receives a
base salary of $110,000 per year, of which, at the option of Mr. Bradshaw, up to
40% may be received in options to purchase shares of the Company's common stock.
The base salary is subject to review annually. For each of the years ended
December 31, 2001 and December 31, 2002, Mr. Bradshaw's base salary is $114,000
and $110,000, respectively.
The agreement provides that in the event of a change of control of the
Company and Mr. Bradshaw giving notice within 90 days thereafter, Mr. Bradshaw
is entitled to receive any compensation owing to him as of that date, plus an
amount equal to the then current annual base salary for one year. A "change of
control" is defined to include (i) any person, other than an officer or
Director, becoming the "beneficial owner", directly or indirectly, of securities
of the Company representing 20% or more of the combined voting power of the
Company's then outstanding securities, or (ii) during any period of two (2)
consecutive years during the term of the agreement, individuals who at the
beginning of such period constitute the Board cease for any reason to constitute
at least a majority of the Board, unless the election of each Director, who was
not a Director at the beginning of the period is approved in advance by
Directors representing two-thirds of the Directors then in office who were
Directors at the beginning of the period.
The agreement also contains confidentiality and non-compete provisions
which restrict Mr. Bradshaw's activities.
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PRINCIPAL STOCKHOLDERS
The following table sets forth, as of February 8, 2002, information
regarding the beneficial ownership of the Company's common stock, by (i) each
stockholder known by the Company to be or that will become the beneficial owner
of more than 5% of the Company's outstanding shares of capital stock, (ii) each
existing Director, as of that date, and each Director to be elected, and (iii)
all existing Directors, as of that date, and executive officers of the Company
as a group. Except for transactions and events described in this Information
Statement, there has been no change in control of the Company since January 1,
2001.
Name and Address of Beneficial Number of Shares Percentage of Outstanding
Owner(1) Beneficially Owned(2) Common Stock
------------------------------------- --------------------- -------------------------
Peter L. Bradshaw 1,855,110(3) 13.61%
Julie M. Bradshaw 892,571(4) 6.72%
Mitchell G. Blumberg 230,000(5) 1.73%
833 Moraga Drive - #12
Los Angeles, CA 90049
Alfred J. Puchala, Jr. 165,000(6) 1.24%
Signal Partners, LLC
10 East 53rd Street
New York, NY 10022
Northfield Capital Corporation 2,019,136 15.29%
347 Bay Street, Suite 301
Toronto, Ontario, Canada M5H 2R7
Douglas Loblaw 120,152(7) 0.90%
John Campbell - 0 - --
750 West Pender Street, Suite 710
Vancouver, BC, Canada V6C 2T7
Brent Peters 7,000 (8)
Northfield Capital Corporation
347 Bay Street - Suite 301
Toronto, Ontario, M5H 2R7
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Name and Address of Beneficial Number of Shares Percentage of Outstanding
Owner(1) Beneficially Owned(2) Common Stock
------------------------------------- --------------------- -------------------------
All officers and Directors as a group 3,142,681 22.58%
(6 persons)
--------------------------------
(1) Unless otherwise indicated, the address of such person is c/o the Company.
(2) For purposes of the above table, a person is considered to "beneficially
own" any shares with respect to which he or she exercises sole or shared
voting or investment power or of which he or she has the right to acquire
the beneficial ownership within 60 days following February 8, 2002.
(3) Includes 1,436,565 shares of Common Stock held by 284085 B.C. Ltd., of
which Mr. Bradshaw is an officer, Director and principal shareholder, and
418,545 shares of Common Stock issuable upon exercise of options held by
Mr. Bradshaw.
(4) Includes 807,571 shares of Common Stock and options to purchase 85,000
shares of Common Stock.
(5) Includes 125,000 shares of Common Stock and options to purchase 105,000
shares of Common Stock.
(6) Includes 60,000 shares of Common Stock and options to purchase 105,000
shares of Common Stock.
(7) Includes 600 shares of Common Stock and options to purchase 119,552 shares
of Common Stock
(8) Less than 0.1%
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DIRECTOR AND OFFICER SECURITIES REPORTS
U.S. Federal securities laws require the Company's Directors and
executive officers, and persons who own more than ten percent (10%) of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of any equity securities of the Company. Copies of such reports are
required to be furnished to the Company. To the Company's knowledge, based
solely on a review of the copies of such reports and other information furnished
to the Company, all persons subject to these reporting requirements filed the
required reports on a timely basis with respect to the Company's year ended
December 31, 2001.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
With the exception of historical matters, the matters discussed in this
Information Statement are "forward-looking statements" as defined under the
Securities Exchange Act of 1934, as amended, that involve risks and
uncertainties. The Company intends that such forward-looking statements be
covered by the safe harbor provisions for forward-looking statements contained
in that act and it is including this statement for purposes of complying with
these safe harbor provisions. The forward-looking statements discussed in this
Information Statement appear in various places including under the captions
"Recent Developments" and "Election of Three Directors; Election of President."
The Company cautions readers that the risk factors described in its Annual
Report on Form 10-KSB and Quarterly Report on Form 10-QSB, as well as those
described in this Information Statement, or in the Company's other filings with
the Commission, in some cases have affected, and in the future could affect its
actual results during 2002 and beyond, and cause those results to differ
materially from those expressed in any forward-looking statements and cause the
Company's development and the development of its business plans to be different
than expressed in those statements. Important factors that could impact the
Company's business development and cause actual results to differ materially
from the forward-looking statements in this Information Statement include, among
others, statements regarding the plans, intentions, beliefs and current
expectations of the Company, its directors, or its officers with respect to the
future business plans and activities of the Company and its efforts to redirect
the Company's activities. Investors are cautioned that any such forward-looking
statements are not guarantees of future business activities or changes in those
activities and involve risks and uncertainties. The Company's future business
activities involve significant risks, including among others, its possible
inability to successfully redirect the Company's activities or enter into any
related agreements. Additional important factors that could cause such
differences are described in the Company's periodic filings with the Securities
and Exchange Commission, including the Company's annual report on Form 10-KSB,
quarterly
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reports on Form 10-QSB and annual report on Form 10-K. The filings may be viewed
at http://www.sec.gov.
By Order of the Board of Directors,
Suite101.com, Inc.
By: /s/ Mitchell G. Blumberg
-----------------------------
Secretary
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