SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 14f-1
INFORMATION STATEMENT
Pursuant to Section 14(f) of the
Securities Exchange Act of 1934 and Rule 14f-1 thereunder
DATAMEG CORP.
(Exact name of registrant as specified in its charter)
New York 000-12493 13-3134389
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
3148 Dumbarton Street, N.W.
Washington, D.C. 20007
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (202) 965-2448
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INFORMATION STATEMENT PURSUANT TO SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER
The information contained herein is being furnished to holders of the
commn stock, par value $.01 per share (the "Common Stock"), of DataMeg
Corp., a New York corporation (the "Company"), pursuant to the
requirements of Section 14(f) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and Rule 14f-1 under the Exchange Act
in order to effect a change in majority control of the Company's Board
of Directors other than by a meeting of shareholders. The date of this
Information Statement is October 30, 2000.
SUMMARY
The Company and the DataMeg Corporation ("DTMG-VA") entered into a share
exchange agreement pursuant to which all of DTMG-VA shareholders received
shares of the Company's Common Stock and DTMG-VA became a wholly owned
subsidiary of the Company. As a condition to the transaction and
pursuant to a voting agreement ("Voting Agreement") between then existing
management and majority shareholders of the Company, DTMG-VA's founder
Andy Benson and his designees (collectively "Mr. Benson") will assume
control of the DataMeg board of directors ("Board"). Under the terms
of the Voting Agreement, Mr. Benson will control the number and identity
of the persons who sit on the DataMeg Board.
NO ACTION IS REQUIRED BY THE SHAREHOLDERS OF THE COMPANY IN CONNECTION
WITH THE RESIGNATION OR APPOINTMENT OF ANY DIRECTOR OR OFFICER.
However, Section 14(f) of the Exchange Act requires the mailing to the
Company's shareholders of the information set forth in this Information
Statement. The Company is notifying its shareholders of the contemplated
change in majority control of the Company's Board of Directors by mailing
this Information Statement to shareholders of record as of September 30,
2000 and by filing a copy of the Information Statement with the Securities
& Exchange Commission (SEC). After the new directors have taken office,
the Company will report the resulting change of control by filing a
Current Report on Form 8-K.
On September 30, 2000, the Company had 33,245,634 shares of Common Stock
otstanding. While pursuant to a August 4, 2000 amendment to the Company's
Certificate of Incorporation the Company is authorized to issue 80,000,000
shares of capital stock, 75,000,000 of which are Common Stock and
5,000,000 of which are Preferred Stock, par value $.01 per share, the
Common Stock is currently the only class of securities of the Company
outstanding and entitled to vote. Each share of Common Stock is entitled
to one non-cumulative vote. Shareholders of the Company will have the
opportunity to vote with respect to the election of directors at the next
annual meeting of the Company's shareholders.
THE AGREEMENT AND PLAN OF SHARE EXCHANGE
On April 24, 2000, the sole director of DataMeg approved an
Agreement and Plan of Share Exchange between the Company and DTMG-VA
pursuant to which all of the issued and outstanding shares of DTMG-VA
were exchanged for shares of the Company's common stock equaling, upon
completion of the share exchange, 90% of the issued and outstanding voting
capital stock of the Company. As a result of this transaction, the
Company's former stockholders owned 10% of the Company's issued and
outstanding shares of Common Stock. The former stockholders of DTMG-VA,
as a consequence of the Share Exchange, then owned 90% of the Company's
issued and outstanding shares of Common Stock and DTMG-VA became a wholly
owned subsidiary of the Company.
Under New York Law, the vote of the Company's stockholders, as the
acquiring corporation, was not required to approve a share exchange.
However, the Company could not effect the share exchange without an
amendment to the Company's Certificate of Incorporation increasing the
number of shares the Company is authorized to issue. New York law does
require stockholder approval for such an amendment. On June 5, 2000, at
a special meeting, the Company's' stockholders approved an amendment to
the Company's Certificate of Incorporation which, among other things,
increased the Company's authorized capital stock to 80,000,000 shares,
75,000,000 shares of which are Common Stock and 5,000,000 shares of which
are shares of Preferred Stock, par value $.01 per share.
On April 24, 2000, the Board of Directors of DTMG-VA approved the con-
templated Share Exchange and recommended that the stockholders of DTMG-VA
approve the contemplated Share Exchange. By unanimous written consent of
the DTMG-VA stockholders, effective May 5, 2000, the stockholders of
DTMG-VA approved, adopted and consented to the proposed Agreement and
Plan of Share Exchange with the Company. DTMG-VA
DTMG-VA is a research and development stage company focused
primarily on developing new technologies related to the internet and
information access. DTMG-VA was incorporated in Virginia in 1999 and
has its principal place of business at 3148 Dumbarton Street, NW.,
Washington, D.C. 20007. Telephone (202) 965-2448.
DTMG-VA has no material properties. Other than office supplies, furniture
and equipment incidental to the development to the of its technology
products, its primary assets are the technology it has and is developing
for high speed data transmission over ordinary telephone lines referred to
by the Company as a Communications Acceleration Systems (CAS). DTMG-VA
reports to have filed patents pertinent to this technology development and
its proprietary tone, frequency, modulation technology. DTMG-VA's core
strategy is to obtain business partners in specific market sectors that
its feels will enhance its ability to introduce a working CAS network.
As with all start-up companies, the success of its business plan, the
viability of its technology, market acceptance of its products, when and
if developed from such technology, and DTMG-VA's ability to obtain the
necessary capital to implement such plan are speculative.
Agreement regarding control of the DataMeg Board of Directors
The Agreement and Plan of Share Exchange provides that promptly
upon compliance with the requirements of Section 14(f) of the Securities
Exchange Act of 1934 and Rule 14(f)-1 promulgated thereunder, two
designees of Andrew Benson, DTMG-VA's founder, will be appointed to serve
the vacant unexpired terms of office of former Directors of the Company's
Board of Directors. The effect of the forgoing would be to put designees
of DTMG-VA, the acquired corporation, in control of the Company's Board of
Directors, without a vote of the stockholders. Rule 14(f)-1 requires the
dissemination of certain information regarding the director designees who
will take control of the Company's Board to all Company stockholders ten
(10) days prior to their taking office, however, it does not empower
stockholders to vote on such matter. Mr. Benson has nominated himself
and Reggie Phillips as his designees to the Company's Board of Directors.
BENEFICIAL SECURITY OWNERSHIP
The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock as of September 30, 2000, by:
(i) each person who is known by the Company to beneficially own 5% or more
of the Company's outstanding Common Stock; (ii) the Company's President
and Chief Executive Officer ("CEO"); (iii) each director and director
nominee; and (iv) all directors, director nominees and executive officers
of the Company as a group. The Company is not aware of any beneficial
owner of more than 5% of the outstanding Common Stock other than as set
forth in the following table. Unless otherwise indicated, the address of
each named beneficial owner is c/o DataMeg Corporation, 3148 Dumbarton
Street, NW., Washington, D.C. 20007.
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF CLASS
OF BENEFICIAL OWNER BENEFICIALLY OWNED OUTSTANDING
Andrew Benson 10,448,892 33%
Reggie Phillips 10,917,642 33%
John Cairns 4,362,057 13%
All directors,
director nominees and
executive officers ---------- ---
as a group 25,728,591 79%
(3 persons)
*Less than 1 percent
BOARD OF DIRECTORS
As noted above, the Company and DTMG-VA entered into a share exchange
agreement pursuant to which all of DTMG-VA shareholders received share
s of the Company's Common Stock and DTMG-VA became a wholly owned
subsidiary of the Company. As a condition to the transaction and
pursuant to a voting agreement ("Voting Agreement") between the existing
management and majority shareholders of the Company, DTMG-VA's founder
Andy Benson and his designees (collectively "Mr. Benson") will assume
control of the Company's board of directors ("Board"). Under the terms
of the Voting Agreement, Mr. Benson will control the number and identity
of the persons who sit on the Board.
On August 18, 2000, pursuant to the Voting Agreement, Mr. Benson and
Reggi Phillips ("Mr. Phillips"), a designee of Mr. Benson, were
appointed to the Board of Directors to take office, subject to
compliance with the requirements of Section 14(f) of the Exchange Act
and Rule 14f-1 under the Exchange Act, on November 13, 2000
(the "Effective Date")
NAME AGE POSITION HELD
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Andrew Benson 45 Chairman of the Board of Directors
President and Secretary
Reggie Phillips 50 Director Nominee
ANDREW BENSON, founded DTMG-VA in January 1999. From 1990 to 1997,
Mr. enson served as the Chief Executive Officer of Video Sentry
Corporation, a Minnesota corporation and, from 1997 to 1999,
Mr. Benson served a the Vice President of CCTV Operations of Sentry
Technology. In addition, Mr. Benson served on the Boards of Directors
of both Video Sentry Corporation and Sentry Technology, both public
corporations. REGGIE PHILLIPS, co-founded DTMG-VA in January 1999 and
has served as the company's Chief Operating Officer since March 1999.
Most recently, prior to his work with DTMG-VA, Mr. Phillips served as
the Chief Operating Officer and Vice President of Sales of SQL
Software, a Delaware corporation based in Vienna, Virginia. Prior
to that, Mr. Phillips served as a Director with Landmark Systems,
a Delaware corporation. Mr. Phillips holds an A.A. from Florida
Junior College and a B.B.A. from the University of Florida.
Following the Effective Date, the Company will designate audit and
compenstion committees of the Board of Directors. The Audit Committee
recommends engagement of the Company's independent auditors, is primarily
responsible for approving the services performed by the Company's
independent auditors and for reviewing and evaluating the Company's
accounting principles and internal system of accounting controls and
has general responsibility in connection with related matters. The
Compensation Committee evaluates management's recommendations and makes
recommendations to the Board of Directors concerning the compensation of
the Company's executive officers. The Compensation Committee is also
responsible for the formulation of the Company's executive compensation
policy and the research, analysis and subsequent recommendation regarding
the establishment and administration of the Company's Stock Option and
Stock Purchase Plans. The Board of Directors does not have a Nominating
Committee or an Executive Committee.
The Company's Bylaws provide that there shall be six (6) members of the
Board of Directors subject to amendment of the number from time to time
by resolution of either the Board or the Shareholders. Each director
is elected at the annual meeting of the shareholders to serve until his
successor is elected and qualified. Executive officers are elected
annually by the Board of Directors and serve at the discretion of the
Board of Directors.
Neither Mr. Benson nor Mr. Phillips, are a party to any material
proceeding adverse to, or have a material interest adverse to, the
Company or any of its subsidiaries.
COMPENSATION OF DIRECTORS
Directors receive a quarterly cash fee of $1,250 for their services.
In addition, directors receive $500 per Board of Directors' meeting
attended, and $250 per committee meeting attended (unless such meeting
is combined with a full Board of Directors' meeting). Directors who are
employees do not receive any additional compensation for their service
as directors. Directors are reimbursed for out-of-pocket expenses
associated with their attendance at Board of Directors' meetings.
EXECUTIVE OFFICERS
As of October 30, 2000, Mr. Benson served as President and Secretary,
the only officers, of the Company and there were no executive officers
of the Company who are not also directors of the Company. There are
no family relationships among the directors or executive officers of
the Company.
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE OF
CONTROL ARRANGEMENTS
On January 1, 1999, the Company's wholly owned subsidiary, DTMG-VA
entered into employment agreements with Messrs. Benson and Phillips that
will expire on March 30, 2002, unless automatically extended for an
additional period of one year. Automatic renewal will result unless
either party notifies the other in writing of its intent not to renew
at least thirty days in advance of the expiration of the term. Under
their respective agreements, Messrs. Benson and Phillips will serve,
first as full time consultants to, and then as full time employees of,
DTMG-VA with the titles of President and Chief Operating Officer,
respectiely of DTMG-VA. Transition from consultant to employee is based
upon DTMG-VA achieving certain agreed upon levels of debt and/or equity
financing. Under his agreement, Mr. Benson was entitled to receive an
initial monthly base compensation of $10,000 for the first three and
one-half months of his employment, a monthly base compensation of
$18,000 or the next six months of his employment and thereafter will be
entitled to receive an monthly base compensation of $36,000 as a con-
sultant, until he transitions to full employee status. Upon becoming a
full time employee Mr. Benson will receive an annual base salary of
$500,000. If Mr. Benson is terminated by DTMG-VA other than for cause,
DTMG-V must continue to pay Mr. Benson either periodically corresponding
to the dates such base salary would otherwise be paid or, at the election
of DTMG-VA, as a lump sum payment, that amount equal to Mr. Benson's
base salary through that would have been payable to Mr. Benson through
the remainder of the term of the agreement. In connection with his
sevice as DTMG-VA's President, Mr. Benson was also awarded a 5-year
option to purchase 187,500 shares of the Company's common stock at a
purchase price of $3.30 per share, which he has exercised. Under his
agreement, Mr. Phillips was entitled to receive an initial monthly base
compensation of $10,000 for the first three and one-half months of his
employment, a monthly base compensation of $18,000 for the next six
months of his employment and thereafter will be entitled to receive a
monthly base compensation of $36,000 as a consultant, until he
transitions to full employee status. Upon becoming a full time employee
Mr. Phillips will receive an annual base salary of $500,000. If
Mr. Phillips is terminated by DTMG-VA other than for cause, DTMG-VA
must continue to pay Mr. Phillips either periodically corresponding
to the dates such base salary would otherwise be paid or, at the
election of DTMG-VA, as a lump sum payment, that amount equal to
Mr. Phillips's base salary through that would have been payable to
Mr. Phillips through the remainder of the term of the agreement.
In connection with his service as DTMG-VA's President, Mr. Phillips
was also awarded a 5 -year option to purchase 187,500 shares of the
Company's common stock at a purchase price of $3.30 per share, which
he has exercised.
The Agreement and Plan of Share Exchange provides that promptly
upon compliance with the requirements of Section 14(f) of the Securities
Exchange Act of 1934 and Rle 14(f)-1 promulgated thereunder, two
designees of Andrew Benson, DTMG-VA's founder, will be appointed to
serve the vacant unexpired terms of office of former Directors of the
Company's Board of Directors. The effect of the forgoing would be to
put designees of DTMG-VA, the acquired corporation, in control of the
Company's Board of Directors, without a vote of the stockholders. Rule
14(f)-1 requires the dissemination of certain information regarding the
director designees who will take control of the Company's Board to all
Company stockholders ten (1) days prior to their taking office, however,
it does not empower stockholders to vote on such matter. Mr. Benson has
nominated himself and Reggie Phillips as his designees to the Company's
Board of Directors.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors and holders of more than 10% of the Company's Common
Stock, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "Commission"). Such persons are
required to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no other
reports were required from such persons, the Company believes, that
during or with respect to the period from July 1, 1999 to June 30, 2000,
all of its executive officers, directors and 10% stockholders complied
with their Section 16(a) obligations.
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
who is so duly authorized.
DATAMEG CORPORATION
Date: _____________, 2000 Andrew Benson
By: /s/ -------------
Andrew Benson
President
