SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
THE ASHTON TECHNOLOGY GROUP, INC.
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials:
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|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
O- 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.
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(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing party:
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(4) Date filed:
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[LOGO]
[LETTERHEAD]
May 8, 1998
Dear Stockholder,
You are cordially invited to attend a Special Meeting (the "Special
Meeting") of Stockholders of The Ashton Technology Group, Inc. (the "Company")
to be held at 2:00 p.m. on May 29, 1998 at the Company's corporate headquarters
located at 1900 Market Street, Suite 701, Philadelphia, Pennsylvania 19103.
At the Special Meeting, the Company will ask the Stockholders to: (i)
approve and adopt an amendment to the Company's Certificate of Incorporation, as
amended, to increase the authorized number of shares of common stock and
preferred stock of the Company; and (ii) authorize the issuance of shares of
common stock of the Company pursuant to certain put rights and upon the
conversion or exercise, as the case may be, of certain shares of preferred stock
and warrants of the Company to purchase shares of common stock of the Company
issued or issuable pursuant to the Private Equity Line of Credit Agreement,
dated as of April 2, 1998, between the Company, Settondown Capital International
Ltd. and the purchasers referred to therein.
Whether you plan to attend the Special Meeting or not, it is important that
you promptly complete, sign, date and return the enclosed proxy card in
accordance with the instructions set forth on the card. This will ensure your
proper representation at the Special Meeting.
Sincerely,
/s/ Fredric W. Rittereiser
Fredric W. Rittereiser
President and Chief Executive Officer
YOUR VOTE IS IMPORTANT.
PLEASE REMEMBER TO RETURN YOUR PROXY PROMPTLY.
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[LOGO]
THE ASHTON TECHNOLOGY GROUP, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1998
To the Holders of Common Stock and Preferred Stock of
THE ASHTON TECHNOLOGY GROUP, INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the "Special
Meeting") of The Ashton Technology Group, Inc. (the "Company") will be held at
2:00 p.m. on May 29, 1998 at the Company's corporate headquarters located at
1900 Market Street, Suite 701, Philadelphia, Pennsylvania 19103 for the purpose
of considering and voting upon the following matters:
1. To approve and adopt an amendment to the Company's Certificate of
Incorporation, as amended (the "Certificate of Incorporation"), which
would increase the number of authorized shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), from 20,000,000
to 60,000,000;
2. To approve and adopt an amendment to the Certificate of Incorporation
which would increase the number of authorized shares of the Company's
preferred stock, par value $.01 per share, from 1,000,000 to
3,000,000; and
3. To authorize the issuance of Common Stock pursuant to certain put
rights and upon the conversion or exercise, as the case may be, of the
Company's Series D Convertible Preferred Stock, Series E Convertible
Preferred Stock and warrants to purchase shares of Common Stock issued
or issuable pursuant to the Private Equity Line of Credit Agreement,
dated as of April 2, 1998, among the Company, Settondown Capital
International Ltd. and the purchasers referred to therein.
The close of business on May 6, 1998 has been fixed as the record date (the
"Record Date") for the determination of stockholders entitled to notice of and
to vote at the Special Meeting and any adjournments thereof. A list of the
stockholders entitled to vote at the Special Meeting will be open to the
examination of any stockholder of the Company upon request during regular
business hours at the offices of the Company for the ten-day period prior to the
Special Meeting.
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YOU ARE EARNESTLY REQUESTED, WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE
SPECIAL MEETING, TO MARK, DATE, SIGN AND RETURN PROMPTLY THE ACCOMPANYING PROXY
IN THE ENCLOSED ENVELOPE TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES.
By Order of the Board of Directors,
FREDRIC W. RITTEREISER
President and Chief Executive Officer
Philadelphia, Pennsylvania
May 8, 1998
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[LOGO]
THE ASHTON TECHNOLOGY GROUP, INC.
PROXY STATEMENT
Special Meeting to be Held on May 29, 1998
INTRODUCTION
This Proxy Statement is furnished to holders of the (i) common stock, par
value $.01 per share (the "Common Stock"), (ii) Series A Convertible PIK
Preferred Stock (the "Series A Preferred Stock"), (iii) Series B Convertible
Preferred Stock (the "Series B Preferred Stock") and (iv) Series D Convertible
Preferred Stock (the "Series D Preferred Stock", together with the Series A
Preferred Stock and the Series B Preferred Stock, the "Outstanding Preferred
Stock") of The Ashton Technology Group, Inc. (the "Company") in connection with
the solicitation by, and on behalf of, the Board of Directors (the "Board") of
the Company of proxies to be voted at the Special Meeting of Stockholders to be
held at the Company's corporate headquarters located at 1900 Market Street,
Suite 701, Philadelphia, Pennsylvania 19103, on May 29, 1998 at 2:00 p.m., and
at any postponements, continuations or adjournments thereof (the "Special
Meeting"). As of the date of this Proxy Statement there are no shares of Series
C Convertible Preferred Stock (the "Series C Preferred Stock") outstanding.
All proxies in the accompanying form that are properly executed and duly
returned will be voted in accordance with the instructions specified therein. If
no instructions are given, such proxies will be voted (i) with respect to
holders of Common Stock, FOR Proposal One, to amend the Certificate of
Incorporation of the Company, as amended (the "Certificate of Incorporation") to
increase the authorized number of shares of Common Stock from 20,000,000 to
60,000,000, (ii) with respect to holders of Common Stock and holders of
Outstanding Preferred Stock, FOR Proposal Two, to amend the Certificate of
Incorporation to increase the authorized number of shares of preferred stock,
$.01 par value (the "Preferred Stock"), from 1,000,000 to 3,000,000, and (iii)
with respect to holders of Common Stock, FOR Proposal Three, to authorize the
issuance of Common Stock pursuant to certain put rights and upon the conversion
or exercise of the securities issued or issuable pursuant to the Private Equity
Line of Credit Agreement (the "Equity Line of Credit"), dated as of April 2,
1998, among the Company, Settondown Capital International Ltd. (the "Placement
Agent") and the purchasers referred to therein (the "Investors"). A proxy may be
revoked at any time prior to its exercise by written notice to the Company, by
submission of another proxy bearing a later date or by voting in person at the
meeting. Such revocation will not affect a vote on any matters taken prior
thereto. The mere presence at the meeting of the person appointing a proxy will
not revoke the appointment.
<PAGE>
This Proxy Statement and the accompanying notice and proxy are being mailed
on or about May 8, 1998 to holders of record of the Common Stock and Outstanding
Preferred Stock as of May 6, 1998 (the "Record Date"). Only holders of record of
the Common Stock and Outstanding Preferred Stock at the close of business on the
Record Date are entitled to notice of and to vote at the Special Meeting. As of
the Record Date, there were 8,677,913 shares of Common Stock outstanding, each
of which entitles the holder thereof to one vote on all matters that may
properly come before the Special Meeting, and approximately 842,503 shares of
Outstanding Preferred Stock, each of which entitles the holder thereof to one
vote solely on Proposal Two, to increase the number of authorized shares of
Preferred Stock. There is no cumulative voting with respect to the Common Stock
or Outstanding Preferred Stock.
The mailing address of the Company's principal executive offices is 1900
Market Street, Suite 701, Philadelphia, Pennsylvania 19103.
PROPOSAL ONE:
TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT
HOLDERS OF COMMON STOCK VOTE "FOR" THE APPROVAL OF PROPOSAL
ONE.
The Certificate of Incorporation currently authorizes the issuance of
20,000,000 shares of Common Stock. On February 11, 1998, the Board approved an
amendment to the Certificate of Incorporation to increase the authorized number
of shares of Common Stock from 20,000,000 to 60,000,000. The form of amendment
approved by the Board and to be considered at the Special Meeting is attached as
Exhibit A to this Proxy Statement.
As of the Record Date, the Company had 8,677,913 shares of Common Stock
issued and outstanding and of the remaining 11,322,087 authorized but unissued
shares of Common Stock, the Company has reserved approximately 7,347,308 shares
in connection with the conversion of Outstanding Preferred Stock, 3,697,750
shares in connection with the possible exercise of outstanding warrants and
270,000 shares in connection with the possible exercise of the Company's
outstanding options. Not included in the number of shares reserved in connection
with the exercise of outstanding warrants and options are 422,000 shares of
Common Stock issuable upon the exercise of warrants and 180,000 shares of Common
Stock issuable upon the exercise of options held by certain executive officers
and directors as set forth in "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT--Management" below, which cannot be exercised unless Proposal One
is adopted.
Pursuant to the Equity Line of Credit, in a private placement transaction
on April 3, 1998, the Company issued (i) three shares of Series D Preferred
Stock, liquidation preference $1 million per share, and warrants (the "Series D
Warrants"), to purchase 250,000
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shares of Common Stock, subject to certain adjustments, to the Investors for an
aggregate purchase price of $3 million and (ii) warrants (the "Series D
Placement Agent Warrants") to purchase up to 190,000 shares of Common Stock,
fifteen-one hundredths (15/100) of a share of Series D Preferred Stock, subject
to certain adjustments, and 20,000 shares of Common Stock to the Placement Agent
for fees.
Subject to, among other things, the approval by the holders of Common Stock
of Proposal One and Proposal Three, the Equity Line of Credit contemplates the
issuance of (i) two shares of Series E Convertible Preferred Stock, liquidation
preference $1 million per share (the "Series E Preferred Stock"), and warrants
(the "Series E Warrants", together with the Series D Warrants, the "Private
Warrants") to purchase up to 100,000 shares of Common Stock, subject to certain
adjustments, for an aggregate purchase price of $2 million, (ii) shares of
Common Stock (the "Put Shares") required to be purchased from time to time by
the Investors upon notice (a "Put Notice") from the Company at a price equal to
85% of the market price, as such term is defined in the Equity Line of Credit(1)
(the "Put Market Price"), of the Common Stock, determined as of the date of the
Put Notice, up to such number of Put Shares that may be purchased pursuant to
the Equity Line of Credit for a maximum aggregate purchase price of $13 million,
if all Put Shares are purchased and (iii) one-tenth (1/10) of a share of Series
E Preferred Stock and warrants (the "Series E Placement Agent Warrants",
together with the Series D Placement Agent Warrants, the "Placement Agent
Warrants") to purchase up to 60,000 shares of Common Stock, subject to certain
adjustments, to the Placement Agent for fees. The Private Warrants and the
Placement Agent Warrants are exercisable to purchase shares of Common Stock for
five years following their respective dates of issuance at an exercise price of
$4.64256 per share (120% of 3.8688, the average closing bid price of the Common
Stock for the five trading days preceding April 2, 1998). As of the date of this
proxy statement, there are no shares of Series E Preferred Stock, Put Shares,
Series E Warrants or Series E Placement Agent Warrants outstanding.
The Series D Preferred Stock is convertible into such number of shares of
Common Stock as is determined by dividing the liquidation preference per share
of Series D Preferred Stock by its conversion price. The conversion price of the
Series D Preferred Stock is equal to the market price, as defined in the Series
D Preferred Stock Certificate of Designation(2) (the "Series D Market Price") of
the Common Stock, determined as of the date of conversion, multiplied by 75%;
provided, however, that the maximum conversion price of the Series D Preferred
Stock shall be $4.61 per share of Common Stock (125% of the closing bid price of
$3.688 for the Common Stock on April 3, 1998, the date the Series D Preferred
Stock was purchased). As a result, 3.15 outstanding shares of Series D Preferred
Stock are convertible into a minimum of 683,297 shares of Common Stock. The
Series D Preferred Stock may not be converted into Common Stock until the
earlier of (i) June 3, 1998 or (ii) the date that a
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(1) The Equity Line of Credit defines market price as the average of the two
lowest closing bid prices of the Common Stock on the trading date on which the
Put Notice is delivered and the three trading days preceding and the three
trading days following such trading date.
(2) The Series D Preferred Stock Certificate of Designation defines market price
as the average of the closing bid price per share of the Common Stock over the
five consecutive trading days ending on the trading day immediately preceding
the date the applicable holder of Series D Preferred Stock elects to have the
shares of Series D Preferred Stock converted.
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registration statement (the "Registration Statement") registering the shares of
Common Stock issuable pursuant to the Equity Line of Credit has been filed with
the Securities and Exchange Commission (the "Commission"). At March 31, 2000,
any outstanding shares of Series D Preferred Stock will be automatically
converted into Common Stock at its then conversion price.
The Series E Preferred Stock is convertible into such number of shares of
Common Stock as is determined by dividing the liquidation preference per share
of Series E Preferred Stock by the conversion price of the Series E Preferred
Stock. The conversion price of the Series E Preferred Stock is equal to the
market price, as defined in the Series E Preferred Stock Certificate of
Designation(3) (the "Series E Market Price"), of the Common Stock, determined as
of the date of conversion, multiplied by 80%; provided, however, that the
maximum conversion price of the Series E Preferred Stock shall be the lesser of
(i) 125% of the closing bid price for the Common Stock on the date the Series E
Preferred Stock to be converted was purchased, or (ii) $5.00. No Series E
Preferred Stock has yet been issued. As an example, based on a closing bid price
of the Common Stock of $3.25 (the closing bid price on May 1, 1998) the 2.1
shares of Series E Preferred Stock issuable pursuant to the Equity Line of
Credit, if they had been purchased on May 1, 1998, would be convertible into a
minimum of 516,923 shares of Common Stock. At March 31, 2000, any outstanding
shares of Series E Preferred Stock will be automatically converted into Common
Stock at its then conversion price. The Investors are not obligated to purchase
the $2 million of Series E Preferred Stock unless a number of conditions are
satisfied, including, among other things, (i) Proposal One and Proposal Three
are approved by the holders of Common Stock, (ii) the Registration Statement has
been filed with the Commission, (iii) the closing bid price of the Common Stock
on the day immediately preceding such purchase is at least $1.50 per share and
(iv) the Common Stock has traded at an average volume of at least 25,000 shares
a day for the 30 trading days preceding such purchase.
Following the purchase of the Series E Preferred Stock and subject to the
satisfaction of certain other conditions under the Equity Line of Credit, the
Company may from time to time over a two-year period require the Investors to
purchase Put Shares. The Company may not require the Investors to purchase
greater than $2 million of Put Shares at any one time, subject to certain
trading volume requirements and other restrictions. It is expected that the Put
Shares will be issued and sold over the course of the two-year period following
the effective date of the Registration Statement.
Upon the issuance of the Series E Preferred Stock, the Company will have
reserved up to 600,000 shares of Common Stock issuable upon the exercise of the
Private Warrants and the Placement Agent Warrants.
Of the 40,000,000 additional shares of Common Stock to be authorized
pursuant to Proposal One, up to 5,340,102 shares of Common Stock (based on the
Series E Market Price
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(3) The Series E Preferred Stock Certificate of Designation defines market price
as the average of the closing bid price per share of the Common Stock over the
five consecutive trading days ending on the trading day immediately preceding
the date the applicable holder of Series E Preferred Stock elects to have the
shares of Series D Preferred Stock converted.
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and the Put Market Price, respectively, of the Common Stock as of May 1, 1998
and assuming the consummation of all transactions contemplated by the Equity
Line of Credit) would be required to be reserved for issuance under the Equity
Line of Credit.
The aggregate purchase price of all securities issued and issuable in
accordance with the Equity Line of Credit is approximately $18 million. The
proceeds from the Equity Line of Credit will be used for general corporate
purposes, including working capital. The consummation of the transactions
contemplated by the Equity Line of Credit, which are subject to approval by
holders of Common Stock of Proposal One and Proposal Three, is critical to
achievement of the Company's business plan. The Equity Line of Credit provides
financing for the Company's global strategy of selling on-line transaction
systems in international exchange and non-exchange markets and for the continued
growth of the Company's subsidiary, Gomez Advisors, which specializes in
providing strategic counsel and market research concerning on-line brokerage and
financial services. Failure by the stockholders to approve Proposal One and
Proposal Three may result in payment by the Company to the Investors of $1.1
million in liquidated damages pursuant to the Equity Line of Credit.
On September 11, 1997, subject to the approval by the holders of Common
Stock of Proposal One, the Board authorized the Company to issue to its
officers, directors, employees and to other contributors to the value of the
Company, options to purchase up to 6,000,000 shares of Common Stock at an
exercise price of $1.875 per share. In accordance with such action taken on
September 11, 1997, the Board has authorized the issuance of 1,015,000 shares of
such options to certain non-officers, non-directors and non-employees. As of the
date of this proxy statement, the Board has not made any other agreement or
commitment to issue any such options and there is no other understanding between
the Company and any other persons with respect to the issuance of any such
options or the terms upon which such options would be issued. The issuance of
Common Stock pursuant to the Equity Line of Credit and the stock option plan
described above will substantially dilute the currently outstanding shares of
Common Stock. Except as described in this paragraph and pursuant to the Equity
Line of Credit, at the present time the Company has no immediate agreements,
commitments or understandings with respect to the issuance of any of the
additional shares of Common Stock that would be authorized by the proposed
amendment. However, it should be noted that opportunities for additional
issuances of Common Stock or securities convertible into, or exercisable for,
Common Stock could arise at any time.
The purpose of Proposal One is to authorize 40,000,000 additional shares of
Common Stock. If this proposal is approved by the holders of Common Stock, the
increased number of authorized shares of Common Stock will be available for
issuance from time to time pursuant to the Equity Line of Credit, the stock
option plan described above, upon exercise of other warrants or options and for
such purposes and consideration as the Board may approve without further
stockholder approval, except such approval as is required by law or the
regulations of the Nasdaq SmallCap Market. Such purposes may include additional
public or private issuances of Common Stock or Preferred Stock or other
securities convertible into Common Stock in connection with financing
transactions, acquisitions or other corporate
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transactions, as well as stock dividends, warrants, stock option plans and other
stock-based incentive or compensation programs. The availability of additional
shares of Common Stock for issuance, without the delay and expense of obtaining
stockholder approval, will afford the Company greater flexibility in acting upon
opportunities and transactions, if any, which may arise in the future. The
Common Stock has no preemptive rights.
The Board, within the limitations and restrictions contained in the
Certificate of Incorporation and without further action by the Company's holders
of Common Stock, has the authority to issue the Common Stock from time to time.
PROPOSAL TWO:
TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES OF PREFERRED STOCK
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT
HOLDERS OF COMMON STOCK AND HOLDERS OF OUTSTANDING
PREFERRED STOCK VOTE "FOR" THE APPROVAL OF PROPOSAL TWO.
The Certificate of Incorporation currently authorizes the issuance of
1,000,000 shares of Preferred Stock. On February 11, 1998, the Board approved an
amendment to the Certificate of Incorporation to increase the authorized number
of shares of Preferred Stock from 1,000,000 to 3,000,000. The form of amendment
approved by the Board and to be considered at the Special Meeting is attached as
Exhibit A to this Proxy Statement.
As of the Record Date, the Company had authorized (i) 250,000 shares of
Series A Preferred Stock, all of which are issued and outstanding, (ii) 595,000
shares of Series B Preferred Stock, 592,500 of which are issued and outstanding,
(iii) 105,000 shares of Series C Preferred Stock, none of which are issued and
outstanding, (iv) 10 shares of Series D Preferred Stock, 3.15 of which are
issued and outstanding, (v) 10 shares of Series E Preferred, none of which are
issued and outstanding, and (vi) 157,496.85 remaining shares of Preferred Stock,
none of which are issued and outstanding.
The purpose of Proposal Two is to authorize 2,000,000 additional shares of
Preferred Stock. If this proposal is approved by stockholders, the increased
number of authorized shares of Preferred Stock will be available for issuance
from time to time for such purposes and consideration as the Board may approve
without further stockholder approval, except such approval as is required by law
or the regulations of the Nasdaq SmallCap Market. Such purposes may include
additional public or private issuances of Preferred Stock in connection with
financing transactions, acquisitions or other corporate transactions, as well as
stock dividends, stock option plans and other stock-based incentive or
compensation programs. The availability of additional shares of Preferred Stock
for issuance, without the delay and expense of obtaining further stockholder
approval, will afford the Company greater flexibility in acting upon
opportunities and transactions, if any, which may arise in the future. Other
than pursuant to the Equity Line of
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Credit discussed above, at the present time the Company has no other agreements,
commitments or understandings with respect to the issuance of any of the
additional shares of Preferred Stock that would be authorized by the proposed
amendment. However, it should be noted that opportunities for additional
issuance could arise at any time.
The Board, within the limitations and restrictions contained in the
Certificate of Incorporation and without further action by the Company's
stockholders, has the authority to issue the authorized and unissued Preferred
Stock from time to time in one or more series and to fix the number of shares
and the relative dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences and any other preferences, special rights
and qualifications of any such series.
CERTAIN ANTI-TAKEOVER EFFECTS OF PROPOSALS ONE AND TWO
At the present time, the Company is not aware of any pending or threatened
efforts by any third party to obtain control of the Company, and Proposals One
and Two are not being made in response to any such efforts. However, the
availability for issuance of additional shares of Common Stock and Preferred
Stock could enable the Board to make more difficult or discourage an attempt to
obtain control of the Company. For example, the issuance of shares of Common
Stock and Preferred Stock in a public or private sale, merger or similar
transaction would increase the number of outstanding shares, thereby diluting
the interest of a party attempting to obtain control of the Company and
deterring or rendering more difficult a merger, tender offer, proxy contest or
an extraordinary corporate transaction opposed by the Company.
In addition, the Company is also governed by Section 203 of the Delaware
General Corporation Law (the "Delaware anti-takeover law"), which provides that
certain "business combinations" between a Delaware corporation whose stock is
generally traded or held of record by more than 2,000 stockholders, such as the
Company, and an "interested stockholder" (generally defined as a stockholder who
beneficially owns 15% or more of a Delaware corporation's voting stock) are
prohibited for a three-year period following the date that such stockholder
became an "interested stockholder", unless certain exceptions apply. The term
"business combination" is defined generally to include, among other
transactions, mergers, tender offers and transactions that increase an
"interested stockholder's" percentage ownership of stock in a Delaware
corporation.
As set forth above, such devices may adversely impact stockholders who
desire a change in management and/or the Board or to participate in a tender
offer or other sale transaction involving a change in control of the Company.
While it may be deemed to have potential anti-takeover effects, the proposed
amendments to increase the authorized Common Stock and Preferred Stock is not
prompted by any specific effort or takeover threat currently perceived by the
Board.
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PROPOSAL THREE:
TO AUTHORIZE THE ISSUANCE OF COMMON STOCK PURSUANT
TO CERTAIN PUT RIGHTS AND UPON THE CONVERSION OR
EXERCISE OF CERTAIN OF THE SECURITIES ISSUED OR
ISSUABLE PURSUANT TO THE EQUITY LINE OF CREDIT.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT
HOLDERS OF COMMON STOCK VOTE "FOR" THE APPROVAL OF PROPOSAL
THREE.
The Common Stock is listed on the Nasdaq SmallCap Market. The Nasdaq
SmallCap Market requires stockholder approval prior to (i) the issuance by the
Company of Common Stock which would constitute 20% or more of the Common Stock
outstanding on the date of issuance and (ii) the issuance by the Company of
Common Stock upon the conversion or exercise, as the case may be, of securities
issued or issuable under the Equity Line of Credit, if such issuance of Common
Stock and conversion of such other securities would result in the issuance of
20% or more of the Common Stock outstanding at the time of conversion or
exercise. In addition, the Equity Line of Credit requires stockholder approval
for the issuance by the Company of greater than 19.99% of the Common Stock in
connection with the transactions contemplated by the Equity Line of Credit.
As of May 1, 1998, based on a Series D Market Price of the Common Stock of
$3.25, the 3.15 outstanding shares of Series D Preferred Stock were convertible
into 1,292,308 shares of Common Stock, representing approximately 12.96% of the
outstanding Common Stock, after taking into account the issuance of such shares
of Common Stock issuable upon such conversion (assuming no other conversions of
Preferred Stock or exercise of warrants or options). As of May 1, 1998, based on
a Common Market Price of the Common Stock of $3.25 per share, the 2.1 shares of
Series E Preferred Stock issuable pursuant to the Equity Line of Credit would be
convertible into 807,692 shares of Common Stock, representing approximately
8.51% of the outstanding Common Stock, after taking into account the issuance of
such shares of Comon Stock issuable upon such conversion (assuming no other
conversions of Preferred Stock or exercise of warrants or options). Based on the
Put Market Price for the Common Stock as of May 1, 1998 of $3.07825, the Equity
Line of Credit provides for the issuance of up to 4,223,179 Put Shares,
representing approximately 32.74% of the outstanding Common Stock, after taking
into account the issuance of such Put Shares (assuming no other conversions of
Preferred Stock or exercise of warrants or options). Based on the Series D
Market Price, the Series E Market Price and the Put Market Price, respectively
of the Common Stock determined as of May 1, 1998 and assuming the conversion or
exercise of all securities issuable under the Equity Line of Credit (including
600,000 shares of Common Stock issuable upon the exercise of the Private
Warrants and the Placement Agent Warrants), up to 6,923,179 shares of Common
Stock would be required to be issued under the Equity Line of Credit,
representing approximately 44.38% of the outstanding Common Stock, after taking
into account the issuance of all such shares of Common Stock
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(assuming no other conversions of Preferred Stock or exercise of outstanding
warrants or options).
However, in accordance with the provisions of the Equity Line of Credit,
the issuance of the Series E Preferred Stock is subject to various conditions,
including the condition that the number of shares of Common Stock issuable upon
conversion of the Series E Preferred stock cannot exceed the number of such
shares which, when aggregated with all other shares of Common Stock then owned
by the Investors, would result in the Investors, in the aggregate, owning more
than 4.99% of the outstanding Common Stock. Similarly, under the Equity Line of
Credit the right of the Company to cause the Investors to purchase the Put
Shares is subject to various conditions, including the condition that the number
of shares of Common Stock so purchased cannot exceed the number of such shares
which, when aggregated with all other shares of Common Stock then owned by the
Investors, would result in the Investors, in the aggregate, owning more than
4.99% of the outstanding Common Stock. The tender by the Company of the Put
Notice, requiring the purchase of the Common Stock by the Investors, is at the
discretion of the Company and may occur over the two-year period following the
effective date of the Registration Statement as provided for in the Equity Line
of Credit. The number of shares of Common Stock which may be "put" by the
Company on any put date also is subject to limitations specified in the Equity
Line of Credit based on the closing price of the Common Stock and the 30-day
average daily trading volume of the Common Stock.
The purpose of Proposal Three is to authorize the issuance of Common Stock
pursuant to certain put rights and the issuance of Common Stock upon the
conversion and exercise of all securities issuable pursuant to the Equity Line
of Credit. The consummation of the transactions contemplated by the Equity Line
of Credit, which are subject to the approval of holders of Common Stock of
Proposal One and Proposal Three, is critical to achievement of the Company's
business plan. The Equity Line of Credit provides financing for the Company's
global strategy of selling on-line transaction systems in international exchange
and non-exchange markets and for the continued growth of the Company's
subsidiary, Gomez Advisors, which specializes in providing strategic counsel and
market research concerning on-line brokerage and financial services. Failure by
the stockholders to approve Proposal One and Proposal Three may result in
payment by the Company to the Investors of $1.1 million in liquidated damages
pursuant to the Equity Line of Credit.
QUORUM AND REQUIRED VOTE
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock is necessary to constitute a quorum at the Special
Meeting for the voting on Proposal One and Proposal Three. The presence, in
person or by proxy, of (i) a majority of shares of shares of Common Stock and
Outstanding Preferred Stock, in the aggregate, and (ii) a majority of the
outstanding shares of Outstanding Preferred Stock, voting together as a class,
is necessary to constitute a quorum at the Special Meeting for the voting on
Proposal Two. Shares of Common Stock and Outstanding Preferred Stock represented
by a properly signed and
9
<PAGE>
returned proxy will be counted as present at the Special Meeting for purposes of
determining a quorum, without regard to whether the proxy is marked as casting a
vote or abstaining.
Approval and adoption of Proposal One requires the affirmative vote of a
majority of the outstanding shares of Common Stock. Abstentions and broker
non-votes will have the same effect as votes against Proposal One.
Approval and adoption of Proposal Two requires the affirmative vote of (i)
a majority of the outstanding shares of Common Stock and Outstanding Preferred
Stock, in the aggregate, and (ii) a majority of the shares of Outstanding
Preferred Stock, voting together as a class. Abstentions and broker non-votes
will have the same effect as votes against Proposal Two.
Approval and adoption of Proposal Three requires the affirmative vote of a
majority of the outstanding shares of Common Stock present in person or by
proxy. Abstentions and broker non-votes will have the same effect as votes
against Proposal Three.
A list of all of the Company's stockholders entitled to notice of and to
vote at the Special Meeting will be available at the Special Meeting for
inspection by any stockholder upon request and during regular business hours at
the offices of the Company for the ten-day period prior to the Special Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
In addition to the Common Stock, the Company has three classes of Preferred
Stock entitled to vote at the Special Meeting: (i) Series A Preferred Stock, of
which 250,000 shares were outstanding as of Record Date, (ii) Series B Preferred
Stock, of which 592,500 shares were outstanding as of the Record Date and (iii)
Series D Preferred Stock, of which 3.15 shares are outstanding as of the Record
Date.
Management
The following table sets forth certain information as of the Record Date
regarding (i) the beneficial ownership of the equity securities of the Company
by the executive officers and directors of the Company and (ii) the beneficial
ownership of the equity securities of the Company by all executive officers and
directors of the Company as a group. As of the Record Date, there were 8,677,913
shares of Common Stock issued and outstanding.
As of the Record Date, no executive officer or director of the Company was
the beneficial owner of any shares of Series B Preferred Stock or Series D
Preferred Stock.
10
<PAGE>
<TABLE>
<CAPTION>
Common Stock Series A Preferred Stock
------------------------ ------------------------
Amount and Amount and
Nature of Nature of
Name/Address Beneficial Percent of Beneficial Percent of
of Beneficial Owner Ownership Class Ownership Class
------------------- --------- ----- --------- -----
<S> <C> <C> <C> <C>
John A. Blohm 202,500(1) 2.33% 5,000 2.00%
c/o The Ashton Technology
Group, Inc.
1900 Market Street, Suite 701
Philadelphia, PA 19103
Richard Butler 0 0 0 0
c/o The Ashton Technology
Group, Inc.
1900 Market Street, Suite 701
Philadelphia, PA 19103
Robert A. Eprile 800,000(2) 9.22 5,000 2.00
c/o The Ashton Technology
Group, Inc.
1900 Market Street, Suite 701
Philadelphia, PA 19103
K. Ivan F. Gothner 192,000(3) 2.21 0 0
c/o The Ashton Technology
Group, Inc.
1900 Market Street, Suite 701
Philadelphia, PA 19103
Fredric W. Rittereiser 703,500(4) 8.11 0 0
c/o The Ashton Technology
Group, Inc.
1900 Market Street, Suite 701
Philadelphia, PA 19103
William W. Uchimoto 0 0 0 0
c/o The Ashton Technology
Group, Inc.
1900 Market Street, Suite 701
Philadelphia, PA 19103
Fred S. Weingard 40,000(5) * 0 0
c/o The Ashton Technology
Group, Inc.
1900 Market Street, Suite 701
Philadelphia, PA 19103
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Common Stock Series A Preferred Stock
------------------------ ------------------------
Amount and Amount and
Nature of Nature of
Name/Address Beneficial Percent of Beneficial Percent of
of Beneficial Owner Ownership Class Ownership Class
------------------- --------- ----- --------- -----
<S> <C> <C> <C> <C>
All executive officers and 1,938,000 22.33 10,000 4.00
directors of the Company and
its subsidiaries as a group (7
persons)
</TABLE>
* Represents less than 1%.
(1) Includes: (i) 12,500 shares of Common Stock held by John A. Blohm as
Trustee of the John A. Blohm Living Trust, (ii) 50,000 shares of Common
Stock issuable upon conversion of 5,000 shares of Series A Preferred Stock
held by Mr. Blohm, and (iii) 140,000 shares of Common Stock issuable upon
exercise of options to purchase Common Stock held by Mr. Blohm which are
currently exercisable at $4.00 per share. Mr. Blohm has agreed that such
options may not be exercised unless the number of shares of Common Stock
authorized by the Company is increased in accordance with Proposal One.
(2) Includes 50,000 shares of Common Stock issuable upon conversion of 5,000
shares of Series A Preferred Stock held by Mr. Eprile.
(3) Includes 182,000 shares of Common Stock issuable upon exercise of warrants
to acquire Common Stock held by Mr. Gothner which are currently exercisable
at $5.85 per share. Includes 10,000 shares of Common Stock held jointly by
Mr. Gothner and Pamela S. Gothner. Mr. Gothner has agreed that such
warrants may not be exercised unless the number of shares of Common Stock
authorized by the Company is increased in accordance with Proposal One.
(4) Includes: (i) 363,500 shares of Common Stock held of record by The Dover
Group, Inc. ("Dover"), a corporation of which Mr. Rittereiser is the sole
shareholder, director and officer, (ii) 240,000 shares of Common Stock
issuable upon the exercise of 240,000 warrants held by Dover which are
currently exercisable at $5.85 per share, and (iii) 100,000 shares held by
Mr. Rittereiser's wife, of which Mr. Rittereiser disclaims beneficial
ownership. Dover has agreed that such warrants may not be exercised unless
the number of shares of Common Stock authorized by the Company is increased
in accordance with Proposal One.
(5) Includes 40,000 shares of Common Stock issuable upon exercise of options to
purchase Common Stock held by Mr. Weingard which are currently exercisable
at $14.25 per share. Mr. Weingard has agreed that such options may not be
exercised unless the number of shares of Common Stock authorized by the
Company is increased in accordance with Proposal One.
Certain Beneficial Owners
Common Stock. The following table sets forth certain information as of the
Record Date regarding each person who is known by the Company to own
beneficially more than five percent of the Common Stock:
12
<PAGE>
Common Stock
Amount and
Nature of
Name/Address of Beneficial Percent
Beneficial Owner Ownership Owned
---------------- --------- -----
Kenneth Arthur Stokes 1,035,000(1) 11.95%
Fosseway South - Milds
BA34AN, England
The Dover Group, Inc. 603,502(2) 6.97
70 East Water Street
Toms River, NJ 08753
(1) Represents 825,000 shares of Common Stock issuable upon conversion of
82,500 shares of Series A Preferred Stock held by Mr. Stokes and 210,000
shares of Common Stock issuable upon conversion of 35,000 shares of Series
B Preferred Stock held by Mr. Stokes.
(2) Includes 240,000 shares of Common Stock issuable upon the exercise of
240,000 warrants held by Dover, which are currently exercisable at $5.85
per share. Fredric W. Rittereiser, the Company's president and chief
executive officer, is the sole shareholder, director and officer of Dover
and, consequently, may be deemed the beneficial owner of the shares of
Common Stock held by Dover. Dover has agreed that such warrants may not be
exercised unless the number of shares of Common Stock authorized by the
Company is increased in accordance with Proposal One.
Series A Preferred Stock. The following table sets forth certain
information as of the Record Date regarding each person who is known by the
Company to own beneficially more than five percent of the issued and outstanding
Series A Preferred Stock:
Series A Preferred Stock
----------------------------------
Amount and
Nature of
Name/Address of Beneficial Percent
Beneficial Owner Ownership Owned
- ---------------- --------- -----
Kenneth Arthur Stokes 82,500 33.00%
Fosseway South - Milds
BA34AN, England
Brian Walsh 12,500 5.00
11 MacClesfield Drive
Medford, NJ 08055
Kenneth Yourish 20,000 8.00
31-62 29th Street
Astoria, NY 11106
13
<PAGE>
Series B Preferred Stock. The following table sets forth certain
information as of the Record Date regarding each person who is known by the
Company to own beneficially more than five percent of the issued and outstanding
Series B Preferred Stock:
Series B Preferred Stock
----------------------------------
Amount and
Nature of
Name/Address of Beneficial Percent
Beneficial Owner Ownership Owned
- ---------------- --------- -----
Kenneth Arthur Stokes 35,000 6.39%
Fosseway South - Milds
BA34AN, England
Series D Preferred Stock. The following table sets forth certain
information as of the Record Date regarding each person who is known by the
Company to own beneficially more than five percent of the issued and outstanding
Series D Preferred Stock:
Series D Preferred Stock
----------------------------------
Amount and
Nature of
Name/Address of Beneficial Percent
Beneficial Owner Ownership Owned
- ---------------- --------- -----
Dominion Capital Fund, Ltd. 1 31.75%
c/o/ Citco Fund Services
Limited
Bahamas Financial Center
Charlotte & Sherley Streets
Third Floor
Nassau, Bahamas
Canadian Advantage Limited 1 31.75
Partnership
365 Bay Street, Tenth Floor
Toronto, Ontario M5H2V2
Sovereign Partners Limited 3/4 23.81
Partnership
365 Bay Street, Tenth Floor
Toronto, Ontario M5H2V2
Excalibur Limited Partner 1/4 7.94
365 Bay Street, Tenth Floor
Toronto, Ontario M5H2V2
14
<PAGE>
MANNER AND EXPENSES OF SOLICITATION
Solicitation of proxies will be undertaken by officers and employees of the
Company, on behalf of the Board, by mail, telephone, facsimile and personal
contact. All costs thereof will be borne by the Company. The Company may also
make arrangements with brokerage houses, banks and other custodians, nominees
and fiduciaries to forward proxy materials to the beneficial owners of the
Company's Common Stock and Outstanding Preferred Stock and to request authority
for the execution of proxies. If it does so, the Company will reimburse such
organizations for their reasonable expenses in connection therewith. In
addition, the Company has entered into an arrangement with Corporate Investor
Communications, Inc. ("CIC"), whereby CIC shall act as proxy solicitor on behalf
of the Board in connection with the Special Meeting, soliciting proxies by mail,
telephone, facsimile and personal contact. In exchange for its services as proxy
solicitor, CIC shall receive payment of approximately $4,000 from the Company.
DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholder proposals submitted for inclusion in the proxy statement to be
issued in connection with the Company's 1998 Annual Meeting of Stockholders must
be mailed to the Corporate Secretary, The Ashton Technology Group, Inc., 1900
Market Street, Suite 701, Philadelphia, PA 19103, and must be received by the
Corporate Secretary on or before June 15, 1998. The Company will consider only
proposals meeting the requirements of the applicable rules of the Securities and
Exchange Commission.
15
<PAGE>
INCORPORATION BY REFERENCE
The Company incorporates herein by reference information set forth in the
Annual Report on Form 10-KSB of the Company for the fiscal year ended March 31,
1997 and the Quarterly Reports on Form 10-QSB of the Company for the periods
ended June 30, 1997, September 30, 1997 and December 31, 1997. The Company will
provide, without charge, to each stockholder, upon such stockholder's written or
oral request, the aforementioned documents by first class mail or other equally
prompt means within one business day of receipt of such request. Requests for
such documents should be directed to:
The Ashton Technology Group, Inc.
1900 Market Street, Suite 701
Philadelphia, PA 19103
Tel.: (215) 751-1900
Attention: John A. Blohm
Corporate Secretary
By Order of the Board of Directors,
FREDRIC W. RITTEREISER
President and Chief Executive Officer
Philadelphia, Pennsylvania
May 8, 1998
16
<PAGE>
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
THE ASHTON TECHNOLOGY GROUP, INC.
----------------------------------------
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
----------------------------------------
The Ashton Technology Group, Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
hereby certifies as follows:
1. The Certificate of Incorporation of the Corporation was filed in the
office of the Secretary of State of Delaware on February 16, 1994 and amendments
to the Certificate of Incorporation were subsequently duly filed and recorded
(the Certificate of Incorporation together with such amendments shall be
hereinafter referred to as the "Certificate of Incorporation").
2. The first paragraph of ARTICLE FOURTH of the Certificate of
Incorporation is hereby amended to read in full as follows:
FOURTH: The total number of all classes of stock which the Corporation
shall have authority to issue shall be 63,000,000, of which 60,000,000 shares
shall be common stock, having a par value of $.01 per share, and 3,000,000
shares shall be preferred stock, having a par value of $.01 per share.
3. The aforesaid amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
A1
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this certificate to be signed by its President and attested
by its Secretary this ____ day of May, 1998.
THE ASHTON TECHNOLOGY GROUP, INC.
By:
-------------------------------------
Frederic W. Rittereiser
President and Chief Executive Officer
[Corporate Seal]
Attest:
By:
---------------------------------
John A. Blohm
Secretary
A2
<PAGE>
FORM OF COMMON STOCK PROXY
THE ASHTON TECHNOLOGY GROUP, INC.
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1998
|X| Please mark
votes as in
this sample
The undersigned stockholder hereby appoints John A. Blohm, Robert A. Eprile and
Fredric W. Rittereiser and each of them, each with full power to act alone and
with power of substitution, as proxy or proxies for the undersigned, to attend
the Special Meeting of the Stockholders of The Ashton Technology Group, Inc.
(the "Company"), to be held at 2:00 p.m. on Friday, May 29, 1998, at the
Company's corporate headquarters located at 1900 Market Street, Suite 701,
Philadelphia, Pennsylvania 19103 or at any postponements, continuations or
adjournments thereof, and to vote all shares of common stock of the Company, par
value $.01 per share (the "Common Stock") held by the signatory at the close of
business on May 6, 1998, hereby revoking any proxy or proxies heretofore given
and ratifying and confirming all that said proxies may do or cause to be done by
virtue hereof with respect to the matters described below.
This Proxy, when executed, will be voted in the manner directed herein. If no
direction is made, this Proxy will be voted (i) FOR Proposal One, to amend the
Certificate of Incorporation of the Company, as amended (the "Certificate of
Incorporation") to increase the authorized number of shares of Common Stock from
20,000,000 to 60,000,000, (ii) FOR Proposal Two, to amend the Certificate of
Incorporation to increase the authorized number of shares of preferred stock of
the Company, par value $.01 per share (the "Preferred Stock") from 1,000,000 to
3,000,000, and (iii) FOR Proposal Three to authorize the issuance of Common
Stock pursuant to certain put rights and upon the conversion or exercise of the
securities issued or issuable pursuant to the Private Equity Line of Credit
Agreement, dated as of April 2, 1998, among the Company, Settondown Capital
International Ltd. and the purchasers referred to therein. With respect to the
tabulation of proxies for purposes of each of the foregoing proposals,
abstentions and broker non-votes are treated as votes AGAINST the proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU
VOTE "FOR" PROPOSAL ONE, PROPOSAL TWO AND PROPOSAL THREE
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BELOW BY
THE UNDERSIGNED STOCKHOLDER.
1. Proposal One: To amend the FOR AGAINST ABSTAIN
Certificate of Incorporation to |_| |_| |_|
increase the number of authorized
shares of Common Stock.
2. Proposal Two: To amend the FOR AGAINST ABSTAIN
Certificate of Incorporation to |_| |_| |_|
increase the number of authorized
shares of Preferred Stock.
3. Proposal Three: To approve FOR AGAINST ABSTAIN
the issuance of Common |_| |_| |_|
Stock pursuant to certain put
rights and upon the conversion
or exercise of the securities
issued or issuable pursuant to
the Equity Line of Credit.
(Continued and to be signed on reverse side.)
<PAGE>
In their discretion, the proxies are authorized to vote upon such other matters
as may properly come before the meeting or any postponements, continuations or
adjournments thereof.
Signature(s) _______________________________ Date ______________
Signature(s) _______________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
<PAGE>
FORM OF PREFERRED STOCK PROXY
THE ASHTON TECHNOLOGY GROUP, INC.
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1998
The undersigned stockholder hereby appoints John A. Blohm, Robert A. Eprile and
Fredric W. Rittereiser and each of them, each with full power to act alone and
with power of substitution, as proxy or proxies for the undersigned, to attend
the Special Meeting of the Stockholders of The Ashton Technology Group, Inc.
(the "Company"), to be held at 2:00 p.m. on Friday, May 29, 1998, at the
Company's corporate headquarters located at 1900 Market Street, Suite 701,
Philadelphia, Pennsylvania 19103 or at any postponements, continuations or
adjournments thereof, and to vote all shares of preferred stock of the Company,
par value $.01 per share (the "Preferred Stock") held by the signatory at the
close of business on May 6, 1998, hereby revoking any proxy or proxies
heretofore given and ratifying and confirming all that said proxies may do or
cause to be done by virtue hereof with respect to the matters described on the
reverse side.
This Proxy, when executed, will be voted in the manner directed herein. If no
direction is made, this Proxy will be voted FOR Proposal Two, to amend the
Certificate of Incorporation of the Company, as amended (the "Certificate of
Incorporation") to increase the authorized number of shares of Preferred Stock
from 1,000,000 to 3,000,000. With respect to the tabulation of proxies for
purposes of the proposal to amend the Certificate of Incorporation to increase
the authorized number of shares of Preferred Stock, abstentions and broker
non-votes are treated as votes AGAINST the proposal.
In their discretion, the proxies are authorized to vote upon such other matters
as may properly come before the meeting or any postponements, continuations or
adjournments thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY
(Continued and to be signed on reverse side.)
<PAGE>
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU
VOTE "FOR" PROPOSAL TWO
|X| Please mark
votes as in
this sample
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BELOW BY
THE UNDERSIGNED STOCKHOLDER.
Proposal Two: To amend the FOR AGAINST ABSTAIN
Certificate of Incorporation to |_| |_| |_|
increase the number of authorized
shares of Preferred Stock.
Signature(s) _______________________________ Date ______________
Signature(s) _______________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
