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
/X/ Definitive proxy statement
/ / Confidential, for use of the Commission only as permitted by Rule
14a-6(e)(2)
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SCIENCE DYNAMICS CORPORATION
- ---------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of Securities to which transaction applies:
- -----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- -----------------------------------------------------------------------
3) Per unit price of other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- -----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------------
5) Total fee paid:
- -----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.<PAGE>
1) Amount previously paid:
- -----------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
- -----------------------------------------------------------------------
3) Filing party:
- -----------------------------------------------------------------------
4) Date filed:
- -----------------------------------------------------------------------
<PAGE
[LOGO]
February 22, 1999
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders
(the "Special Meeting") of SCIENCE DYNAMICS CORPORATION (the "Company" or the
"Corporation"), which will be held on March 26, 1999 at 10:00 a.m., at 1919
Springdale Road, Cherry Hill, New Jersey, 08003.
At the Special Meeting, you will be requested to approve a reverse stock
split within a range between one-for-two shares and one-for-eight shares,
of the Company's issued and outstanding Common Stock in order to comply with
the Nasdaq Stock Market $1 minimum bid price requirement for continued
listing on the Nasdaq SmallCap Market. Please take this opportunity to
participate in the affairs of the Company. Complete details of the business
to be conducted at the Special Meeting are given in the attached Notice of
Special Meeting and Proxy Statement. I urge you to review the proposal in
the Proxy Statement carefully, and I solicit your support of the Board's
recommendation on the proposal. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
ACCOMPANYING REPLY ENVELOPE. Returning the proxy does not deprive you of
your right to attend the meeting and to vote your shares in person for the
matters acted upon at the meeting.
I hope to see you at the Special Meeting. Should you require directions
to the Special Meeting, please contact the Company's headquarters at (609)
424-0068.
Sincerely yours,
[SIGNATURE]
Alan C. Bashforth
PRESIDENT, CHIEF EXECUTIVE OFFICER
<PAGE>
SCIENCE DYNAMICS CORPORATION
----------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 26, 1999
------------------------
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of SCIENCE
DYNAMICS CORPORATION, a Delaware corporation (the "Company"), will be held
on March 26, 1999 at 10:00 a.m., local time, at the Company's offices
located at 1919 Springdale Road, Cherry Hill, New Jersey, 08003, for the
following purposes:
1. To amend the Company's Certificate of Incorporation to effect a
split of the Company's issued and outstanding Common Stock within a
range between one-for-two shares and one-for-eight shares.
2. To transact such other business as may properly come before the
meeting or the adjournment or postponement thereof.
These items of business are more fully described in the Proxy Statement
accompanying this notice.
Only stockholders of record at the close of business on February 5, 1999
are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to sign
and return the enclosed Proxy as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any stockholder attending the meeting
may vote in person even if the stockholder has returned a proxy.
By order of the Board of Directors
[SIGNATURE]
ALAN C. BASHFORTH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Cherry Hill, New Jersey
February 22, 1999
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE
AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
<PAGE>
SCIENCE DYNAMICS CORPORATION
----------------
PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 26, 1999
------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy ("Proxy") is solicited on behalf of the Board of
Directors of SCIENCE DYNAMICS CORPORATION, a Delaware corporation (the
"Company"), for use at the Special Meeting of Stockholders (the "Special
Meeting") to be held on March 26, 1999, at 10:00 a.m., local time, or at any
adjournment thereof, for the purposes set forth in this Proxy Statement and
in the accompanying Notice of Special Meeting of Stockholders. The Special
Meeting will be held at the Company's principal executive offices located at
1919 Springdale Road, Cherry Hill, New Jersey 08003. The Company's telephone
number at that address is (609-424-0068)
These proxy solicitation materials were mailed on or about February 22,
1999 to all stockholders entitled to vote at the Special Meeting. The
Company's Board of Directors has unanimously approved the matters being
submitted for stockholder approval at the Special Meeting.
PROXIES AND SOLICITATION COSTS
The enclosed Proxy is solicited by the Company's Board of Directors and,
when the proxy card is properly completed and returned, it will be voted as
directed by the stockholder on the proxy card. Stockholders are urged to
specify their choices on the enclosed proxy card. If a proxy card is signed
and returned without choices specified, in the absence of contrary
instructions, the shares of the Company's common stock, par value $.01 (the
"Common Stock") represented by such proxy will be voted "FOR" Proposal No. 1
described in the accompanying Notice and Proxy Statement and will be voted
in the proxy holders' discretion as to other matters that may properly come
before the Special Meeting. Any proxy given pursuant to this solicitation
may be revoked by the person giving it at any time before its use by (i)
delivering to the Company at the Company's principal executive office, 1919
Springdale Road, Cherry Hill, New Jersey 08003, Attention: Ms. Joy C.
Hartman, Secretary, a written notice of revocation or duly executed proxy
bearing a later date, or (ii) attending the Special Meeting and voting in
person.
The cost of soliciting proxies will be borne by the Company. The Company
may retain the services of a proxy solicitation firm to solicit proxies, for
which the Company expects it will pay a fee not to exceed $10,000. The
Company expects to reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
materials to such beneficial owners. Proxies may be solicited by certain of
the Company's directors, officers and regular employees in person or by
<PAGE>
telephone or facsimile. No additional compensation will be paid to
directors, officers or other regular employees for such services.
RECORD DATE; OUTSTANDING SHARES
Stockholders of record at the close of business on February 5, 1999 (the
"Record Date") are entitled to notice of and to vote at the Special Meeting.
As of the Record Date, 15,861,449 shares of Common Stock were issued and
outstanding held of record by approximately 350 stockholders, as well as
approximately 500 stockholders in street name.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Company's
Secretary, at the offices of the Company, a written notice of revocation or
a duly executed proxy bearing a later date or by attending the Special
Meeting and voting in person.
VOTING AND SOLICITATION
Only holders of Common Stock of record at the close of business on
February 5, 1999, the record date and time fixed by the Board of Directors,
are entitled to notice of and to vote at the Special Meeting. Each holder of
shares of Common Stock is entitled to one vote for each share of Common
Stock held on the Record Date on the proposal presented in this proxy
statement.
A majority of the shares of Common Stock entitled to vote, whether
present in person or represented by proxy, will constitute a quorum for the
transaction of business at the Special Meeting. Approval of Proposal No. 1
"Reverse Stock Split," requires an affirmative vote of a majority of the
Company's issued and outstanding voting shares. Any other matters submitted
for stockholder approval at the Special Meeting will be decided by the
affirmative vote of the holders of a majority of the shares of Common Stock
present in person or represented by proxy and entitled to vote at the
Special Meeting. While there is no definitive statutory or case law
authority in Delaware as to the proper treatment of abstentions in the
counting of votes with respect to a proposal such as the Reverse Stock
Split, the Company believes that abstentions should be counted for purposes
of determining the presence or absence of a quorum for the transaction of
business. In the absence of controlling precedent to the contrary, the
Company intends to treat abstentions in this manner. In a 1988 Delaware
case, BERLIN V. EMERALD PARTNERS, the Delaware Supreme Court held that,
while broker non-votes may be counted for purposes of determining the
presence or absence of a quorum for the transaction of business, broker
non-votes should not be counted for purposes of determining the number of
votes cast with respect to the particular proposal on which the broker has
expressly not voted. Accordingly, broker non-votes with respect to this
proposal will not be counted as votes cast.
<PAGE>
PROPOSAL NO. 1
REVERSE STOCK SPLIT
GENERAL
The Board of Directors of the Company has approved a proposal (the
"Reverse Stock Split Proposal") to amend the Company's Certificate of
Incorporation to effect a stock split within a range between one-for-two
shares and one-for-eight shares, of the Company's issued and outstanding
Common Stock, each share having a par value of one cent (the "Common
Stock"), subject to the approval by the stockholders of the Company. The
Reverse Stock Split Proposal provides for the combination and
reclassification of the present issued and outstanding shares of Common
Stock, into a smaller number of shares of identical Common Stock, on the
basis of between one share of Common Stock for each two shares of Common
Stock up to one share of Common Stock for each eight shares of Common Stock
previously issued and outstanding (the "Reverse Stock Split"). Except as may
result from rounding for fractional shares as described below, each
stockholder will hold the same percentage of Common Stock issued and
outstanding immediately following the Reverse Stock Split as each
stockholder did immediately prior to the Reverse Stock Split. If approved by
the stockholders of the Company as provided herein, the Reverse Stock Split
will be effected by an amendment of the Company's Certificate of
Incorporation in substantially the form attached to this Proxy Statement as
Appendix A (the "Reverse Stock Split Amendment"), and will become effective
upon the filing of the Reverse Stock Split Amendment with the Secretary of
State of Delaware (the "Effective Time"). The following discussion is
qualified in its entirety by the full text of the Reverse Stock Split
Amendment, which is incorporated by reference herein.
At the Effective Time, each share of Common Stock issued and outstanding
will automatically be reclassified and converted into one-half to one-eighth
of a share of Common Stock, with fractional shares to be rounded up to the
next full share.
The Company expects that, if the Reverse Stock Split Proposal is
approved by the stockholders at the Special Meeting, the Reverse Stock Split
Amendment will be filed promptly. However, notwithstanding approval of the
Reverse Stock Split Proposal by the stockholders of the Company, the Board
of Directors of the Company may elect not to file, or to delay the filing
of, the Reverse Stock Split Amendment, if the Board of Directors determines
that filing the Reverse Stock Split Amendment would not be in the best
interest of the Company's stockholders at such time. Factors leading to such
a determination could include, without limitation, any possible effect on
Nasdaq listing or future securities offerings (see "Reasons for the Reverse
Stock Split Proposal," below).
<PAGE>
REASONS FOR THE REVERSE STOCK SPLIT PROPOSAL
The primary purpose of the Reverse Stock Split is to combine the issued
and outstanding shares of Common Stock so that the Common Stock issued and
outstanding after giving effect to the Reverse Stock Split trades at a
significantly higher price per share than the Common Stock issued and
outstanding before giving effect to the Reverse Stock Split. The closing bid
price for the Common Stock on the SmallCap Market tier of The Nasdaq Stock
Market, Inc. (the "Nasdaq SmallCap Market") on February 5, 1999 was $.5313
per share. Pursuant to Nasdaq SmallCap Market rules that went into effect on
February 23, 1998 (the "Nasdaq Listing Requirements") the minimum bid price
for the Company's Common Stock must be at least $1.00 per share for
continued inclusion of the Common Stock on the Nasdaq SmallCap Market. On
July 2, 1998, Nasdaq notified the Company that if the Company was unable to
demonstrate compliance with the $1.00 minimum bid price requirement on or
before the end of the ninety day period ended October 2, 1998, the Company's
securities would be delisted from Nasdaq. On October 2, 1998, the Company
did not meet the $1.00 minimum bid price and consequently the Company
requested a hearing, which was held on December 3,1998. It was clear after
the hearing, that a Reverse Stock Split was one of the necessary pre-
conditions for Nasdaq to permit continued listing of the Company's Common
Stock.
The Company believes that maintaining the listing of the Common Stock on
Nasdaq is in the best interests of the Company and its stockholders.
Inclusion on Nasdaq increases liquidity and may potentially minimize the
spread between the "bid" and "asked" prices quoted by market makers.
Further, continued Nasdaq listing may enhance the Company's access to
capital and increase the Company's flexibility in responding to anticipated
capital requirements. The Company believes that prospective investors will
view an investment in the Company more favorably if its shares qualify for
listing on Nasdaq.
For the above reasons, the Company believes that the Reverse Stock Split
is in the best interests of the Company and its stockholders. However, there
can be no assurances that the Reverse Stock Split will have the desired
consequences. The Company anticipates that, following the consummation of
the Reverse Stock Split, the Common Stock will trade at a price per share
that is significantly higher than the current market price of the Common
Stock. However, there can be no assurance that, following the Reverse Stock
Split, the Common Stock will trade at between two and eight times the market
price of the Common Stock prior to the Reverse Stock Split.
EFFECT OF THE REVERSE STOCK SPLIT PROPOSAL
Subject to stockholder approval, the Reverse Stock Split will be
effected by filing the Reverse Stock Split Amendment to the Company's
Certificate of Incorporation, and will be effective immediately upon such
filing. Although the Company expects to file the Reverse Stock Split
Amendment with the Delaware Secretary of State's office promptly following
approval of the Reverse Stock Split Proposal at the Special Meeting, the
actual timing of such filing will be determined by the Company's management
based upon their evaluation as to when such action will be most advantageous
to the Company and its stockholders. The Company reserves the right to
<PAGE>
forego or postpone filing the Reverse Stock Split Amendment, if such action
is determined to be in the best interests of the Company and its
stockholders.
Fractional shares of Common Stock resulting from the Reverse Stock Split
will be rounded up to the next full share. The number of shares of Common
Stock that may be purchased upon the exercise of outstanding options,
warrants, and other securities convertible into, or exercisable or
exchangeable for, shares of Common Stock (collectively, "Convertible
Securities") and the per share exercise or conversion prices thereof, will
be adjusted as of the Effective Date, so that the aggregate number of shares
of Common Stock issuable in respect of Convertible Securities immediately
following the Effective Date will be one-half to one-eighth of the number
issuable in respect thereof immediately prior to the Effective Date, the per
share exercise price immediately following the Effective Date will be from
two times to eight times the per share exercise or conversion price
immediately prior to the Effective Date, and the aggregate exercise or
conversion prices thereunder shall remain unchanged.
The Reverse Stock Split will also result in some stockholders owning
"odd lots" of less than 100 shares of Common Stock. Brokerage commissions
and other costs of transactions in odd lots may be higher, particularly on a
per-share basis, than the cost of transactions in even multiples of 100
shares.
The Company is authorized to issue 45,000,000 shares of Common Stock, of
which 15,861,449 shares were issued and outstanding at the close of business
on the Record Date.
Adoption of the Reverse Stock Split will reduce the shares of Common
Stock issued and outstanding on the Record Date from 15,861,449 to
approximately 7,930,725 assuming a two-for-one split or 1,982,681 assuming
an eight-for- one split, or proportionate adjustments if other split ratios
within the range are chosen, but will not effect the number of authorized
shares of Common Stock. After the Reverse Stock Split, the Company estimates
that it will have approximately the same number of stockholders. Except for
the rounding of fractional shares to the next full share, the reverse stock
split will not affect any stockholder's proportionate equity interest in the
company.
As a result of the Reverse Stock Split, the Company will have a greater
number of authorized but unissued shares of Common Stock than prior to the
Reverse Stock Split. The increase in the authorized but unissued shares of
Common Stock could make a change in control of the Company more difficult to
achieve. Under certain circumstances, such shares of Common Stock could be
used to create voting impediments to frustrate persons seeking to effect a
takeover or otherwise gain control of the Company. Such shares could be sold
privately to purchasers who might side with the Board of Directors in
opposing a takeover bid that the Board determines is not in the best
interests of the Company and its stockholders.
The increase in the authorized but unissued shares of Common Stock also
may have the effect of discouraging an attempt by another person or entity,
through acquisition of a substantial number of shares of Common Stock, to
<PAGE>
acquire control of the Company with a view to effecting a merger, sale of
assets or a similar transaction, since the issuance of new shares could be
used to dilute the stock ownership of such person or entity. Shares of
authorized but unissued Common Stock could be issued to a holder who would
thereby have sufficient voting power to assure that any such business
combination or any amendment to the Company's Certificate of Incorporation
would not receive the stockholder vote required for approval thereof. The
Board of Directors has no current plans to issue any shares of Common Stock
for any such purpose, and does not intend to issue any stock except on terms
or for reason which the Board of Directors deems to be in the best interests
of the Company.
The Common Stock is currently listed on the Nasdaq SmallCap Market,
under the trading symbol SIDY.
EXCHANGE OF STOCK CERTIFICATES AND ROUNDING FOR FRACTIONAL SHARES
The combination and reclassification of shares of Common Stock pursuant
to the Reverse Stock Split will occur automatically on the Effective Date
without any action on the part of stockholders of the Company and without
regard to the date certificates representing shares of Common Stock prior to
the Reverse Stock Split are physically surrendered for new certificates.
As soon as practicable after the Effective Date, transmittal forms will
be mailed to each holder of record who holds actual certificates for shares
of Common Stock, to be used in forwarding such certificates for surrender
and exchange for certificates representing the number of shares of Common
Stock such stockholder is entitled to receive as a consequence of the
Reverse Stock Split. The transmittal forms will be accompanied by
instructions specifying other details of the exchange. Upon receipt of such
transmittal form, each stockholder should surrender the certificates
representing shares of Common Stock prior to the Reverse Stock Split, in
accordance with the applicable instructions. Each holder who surrenders
certificates will receive new certificates representing the whole number of
shares of Common Stock that he, she or it holds as a result of the Reverse
Stock Split. STOCKHOLDERS SHOULD NOT SEND THEIR STOCK CERTIFICATES UNTIL
THEY RECEIVE A TRANSMITTAL FORM.
After the Effective Date, each certificate representing shares of Common
Stock issued and outstanding prior to the Effective Date (an "Old
Certificate") will, until surrendered and exchanged as described above, be
deemed, for all corporate purposes, to evidence ownership of the whole
number of shares of Common Stock, into which the shares of Common Stock
evidenced by such certificate have been converted by the Reverse Stock
Split, except that the holder of such unexchanged certificates will not be
entitled to receive any dividends or other distributions payable by the
Company after the Effective Date, until the Old Certificates have been
surrendered. Such dividends and distributions, if any, will be accumulated,
and at the time of surrender of the Old Certificates, all such unpaid
dividends or distributions will be paid without interest.
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion describes certain material federal income tax
considerations relating to the Reverse Stock Split. This discussion is based
upon the Internal Revenue Code of 1986, as amended (the "Code"), existing
and proposed regulations thereunder, legislative history, judicial
decisions, and current administrative rulings and practices, all as amended
and in effect on the date hereof. Any of these authorities could be
repealed, overruled, or modified at any time. Any such change could be
retroactive and, accordingly, could cause the tax consequences to vary
substantially from the consequences described herein. No ruling from the
Internal Revenue Service (the "IRS") with respect to the matters discussed
herein has been requested, and there is no assurance that the IRS would
agree with the conclusions set forth in this discussion.
This discussion may not address certain federal income tax consequences
that may be relevant to particular stockholders in light of their personal
circumstances (such as persons subject to the alternative minimum tax) or to
certain types of stockholders (such as dealers in securities, insurance
companies, foreign individuals and entities, financial institutions, and
tax-exempt entities) who may be subject to special treatment under the
federal income tax laws. This discussion also does not address any tax
consequences under state, local, or foreign laws.
STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES TO THEM OF THE REVERSE STOCK SPLIT, INCLUDING
THE APPLICABILITY OF ANY STATE, LOCAL, OR FOREIGN TAX LAWS, CHANGES IN
APPLICABLE TAX LAWS, AND ANY PENDING OR PROPOSED LEGISLATION.
The Company should not recognize any material gain or loss as a result
of the Reverse Stock Split, and no material gain or loss should be
recognized by a stockholder. Except for rounding for fractional shares, the
aggregate tax basis of the shares of Common Stock held by a stockholder
following the Reverse Stock Split will equal the stockholder's aggregate
basis in the Common Stock held immediately prior to the Reverse Stock Split
and generally will be allocated among the shares of Common Stock held
following the Reverse Stock Split on a pro-rata basis. Stockholders who have
used the specific identification method to identify their basis in shares of
Common Stock combined in the Reverse Stock Split should consult their own
tax advisors to determine their basis in the post-Reverse Stock Split shares
of Common Stock received in exchange therefor.
REQUIRED VOTE
The affirmative vote of a majority of the Company's issued and
outstanding voting shares is required to approve the amendment of the
Company's Certificate of Incorporation to effect the Reverse Stock Split.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO EFFECT
THE REVERSE STOCK SPLIT.
<PAGE>
BENEFICIAL SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The following tables set forth certain information known to the Company
with respect to beneficial ownership of the Company's Common Stock as of
February 5, 1999 by (i) each stockholder known by the Company to be the
beneficial owner of more than 5% of the Company's Common Stock, (ii) each
director, (iii) the Company's Chief Executive Officer and the Company's four
other most highly compensated executive officers serving in that capacity as
of February 5, 1999 and (iv) all executive officers and directors as a
group.
Name and Address of Beneficial Owner Number of Percent of
Shares Outstanding Shares(1)
------ ------------------
Lyndon A. Keele
701 Garwood Road, Moorestown, NJ 08057 775,534(2) 4.89%
Reynolds E. Moulton, Jr.
54 Washington Street, Marblehead,
MA 01945 761,000(3) 4.80%
Golden Phoenix, LTD.
P.O. Box 350, Fairfax Station,
VA 22039 2,969,121(5) 18.72%
Innovative Communications Technology,
LTD. (ICT) Le Clos D'Avranche
La Rue Bel-Aire St. Mary, Jersey C.I.
(Alan C. Bashforth, President of the
Company controls ICT) 1,500,000(4) 9.46%
The following table sets forth certain information as of February 5, 1999
with respect to the ownership of the Company's Common Stock by each director
of the Company, and all directors and officers of the Company as a group.
Number Percent of
Name and Address Title of Shares Outstanding
---------------- ----- --------- Shares(1)
------
Lyndon A. Keele Chairman of the Board 775,534(2) 4.89%
701 Garwood Road
Moorestown, NJ 08057
Russell R. Angely Vice President 41,000(6) .26%
107 Hardwood Court
Chalfont, PA 18914
<PAGE>
Joy C. Hartman Exec. Vice President, 86,000(2)(6) .54%
504 Bartram Road CFO, Treasurer,
Moorestown, NJ 08057 Secretary, Director
Kenneth P. Ray Director 40,000(3)(6) .25%
909 Darfield Drive
Raleigh, NC 27615
Alan C. Bashforth President, CEO and 1,500,000(4) 9.46%
Le Clos D'Avranche Director
La Rue Bel-Aire
St. Mary, Jersey C.I.
Sheldon C. Hofferman Director 2,969,121(5) 18.72%
P.O. Box 350, Fairfax
Station, VA 22039
All Directors and
Officers as a Group(6) 5,411,655 33.81%
1 Based upon a total number of 15,861,449 shares issued and
outstanding as of February 5, 1999.
2 Includes 1,700 shares owned by Mr. Keele's daughter, and 300
shares owned by Ms. Hartman's children. The daughter of Mr. Keele
has sole voting and investment power with respect to her shares and
Mr. Keele has sole voting and investment power with respect to all
other shares in this total.
3 Has sole voting power and sole investment power with respect to
the shares owned by such person.
4 Shares in the name of Innovative Communications Technology, LTD.,
a corporation, controlled by Mr. Bashforth.
5 Represents 2,969,121 shares held in the name of Golden Phoenix,
Ltd. of which Sheldon C. Hofferman is the General Partner.
6 In addition to the 10,000 shares owned by K. Ray, an outside
Company Director, Mr. Ray holds incentive options to acquire 30,000
shares. Mr. Angely holds incentive options to acquire 30,000 shares
in addition to the 11,000 shares owned. In addition to the 1,000
shares owned, Ms. Hartman holds incentive options to acquire 65,000
shares and 20,000 warrants.
<PAGE>
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of
the persons named in the enclosed proxy card to vote the shares they
represent as the Board of Directors may recommend.
It is important that your shares be represented at the meeting,
regardless of the number of shares which you hold. You are, therefore, urged
to execute and return, at your earliest convenience, the accompanying proxy
card in the envelope which has been enclosed.
OTHER INFORMATION
The Company files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC"). You may read and copy any reports, statements or other
information filed by the Company at the SEC's public reference rooms in
Washington, D.C., New York City, and Chicago, Illinois. The Company's SEC
filings are also available from commercial document retrieval services or on
the SEC's web site at http://www.sec.gov. You may also request a copy of the
Company's financial reports filed with the SEC by contacting Ms. Joy C.
Hartman, Corporate Secretary, SCIENCE DYNAMICS CORPORATION 1919 Springdale
Road, Cherry Hill, New Jersey 08003.
<PAGE>
APPENDIX A
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
SCIENCE DYNAMICS CORPORATION
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
SCIENCE DYNAMICS CORPORATION
SCIENCE DYNAMICS CORPORATION, a corporation organized and existing under
the General Corporation Law of the State of Delaware DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, at a meeting
called for such purpose, duly adopted resolutions setting forth the proposed
amendment to the Certificate of Incorporation of the Corporation and calling
for the submission of the proposed amendment to a vote on the stockholders
of the Corporation, for their approval and adoption. The resolution setting
forth proposed amendment is as follows:
RESOLVED, that the Corporation amend its Certificate of Incorporation
so that:
ARTICLE 4 of the Certificate of Incorporation shall read as follows:
IV.
The Corporation is authorized to issue one class of shares to be
designated as Common Stock. The total number of shares of stock which the
Corporation has authority to issue is Forty-Five Million (45,000,000)
shares, each having a par value of one cent ($.01) (the "Common Stock").
Effective immediately upon the filing of this Amended and Restated
Certificate of Incorporation in the office of the Secretary of State of the
State of Delaware, the issued and outstanding shares of Common Stock shall
be and hereby are combined and reclassified as follows: each share of Common
Stock shall be reclassified as and converted into one-xxx of a share of
Common Stock, with fractional shares to be rounded up to the next full
share.
Certificates representing shares combined and reclassified as provided
in this Amendment to the Certificate of Incorporation are hereby canceled,
and, upon presentation of the canceled certificates to the Corporation, the
holders thereof shall be entitled to receive new certificates representing
the shares resulting from such combination and reclassification.
SECOND: That the holders of a majority of the issued and outstanding
shares of common stock of the Corporation did duly adopt said amendment
proposed by the Board of Directors, at a special meeting held on March 26,
1999.
THIRD: That these amendments were duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Laws.
<PAGE>
The undersigned hereby acknowledges that the foregoing Certificate
of Incorporation is his act and deed and that the facts stated herein are
true.
--------------------------------------
Alan C. Bashforth
President and Chief Executive Officer
- --------------------------------
Attest: Joy C Hartman, Corporate Secretary
Dated: March 26, 1999
<PAGE>
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P R O X Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SCIENCE DYNAMICS CORPORATION
SPECIAL MEETING OF STOCKHOLDERS
The undersigned stockholder of SCIENCE DYNAMICS CORPORATION hereby
acknowledges receipt of the Notice of Special Meeting of Stockholders and
Proxy Statement for the Special Meeting of Stockholders of SCIENCE DYNAMICS
CORPORATION to be held on March 26, 1999 and hereby appoints Alan C.
Bashforth, Lyndon A. Keele and Joy C. Hartman, and each of or any of them,
proxy and attorney-in-fact, with full power of substitution, on behalf and
in the name of the undersigned, to represent the undersigned at such meeting
and at any adjournment or postponement thereof, and to vote all shares of
Common Stock which the undersigned would be entitled to vote if then and
there personally present, on the matters set forth below.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE LISTED PROPOSAL AND AS THE PROXY HOLDERS
DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING AND ANY
ADJOURNMENT OR POSTPONEMENT THEREOF.
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COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENTS/ADDRESS BOX BELOW
- ---------------------------------------------------------------------------
FOLD
Please mark
your choices
like this /X/
Proposal to amend the Company's FOR AGAINST ABSTAIN
Certificate of Incorporation to effect a / / / / / /
reverse stock split.
I PLAN TO ATTEND THE MEETING. / /
COMMENT/ADDRESS CHANGE
Please mark this box if you have written
comments/address change on the reverse side. / /
Signature(s)______________________________________ Dated____________, 1999
______________________________________ Dated ___________, 1999
NOTE: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
