<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
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
</TABLE>
PubliCARD, Inc.
- --------------------------------------------------------------------------------
(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):
[ ] 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:
N/A
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(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):
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
(5) Total fee paid:
N/A
- --------------------------------------------------------------------------------
[X] Fee paid with preliminary materials.
$5,000
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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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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<PAGE> 2
LOGO
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 26, 2000
We will hold a special meeting of shareholders of PubliCARD, Inc. at 10:00
a.m. (New York City time), on May 26, 2000, at the offices of Kaye, Scholer,
Fierman, Hays & Handler, LLP, 425 Park Avenue, New York, New York, to consider
the following proposals:
1. To consider and act upon a proposal to approve a Plan of Asset Transfer
authorizing the sale of the Company's Greystone Peripherals, Inc.,
Greenwald Industries Inc., Greenwald Intellicard, Inc. and Amazing!
Smart Card Technologies, Inc. subsidiaries or the property or assets
thereof on such terms and conditions (including the consideration to be
received by PubliCARD) as may be determined by the PubliCARD Board of
Directors, in its sole discretion; and
2. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 26, 2000,
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting and any adjournments or postponements thereof.
By Order of the Board of Directors
/s/ Antonio L. Delise
ANTONIO L. DELISE
Secretary
April 27, 2000
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING REGARDLESS OF
THE NUMBER OF SHARES YOU HOLD. PLEASE COMPLETE, SIGN AND MAIL THE ENCLOSED PROXY
IN THE ACCOMPANYING ENVELOPE EVEN IF YOU INTEND TO BE PRESENT AT THE MEETING.
RETURNING THE PROXY WILL NOT LIMIT YOUR RIGHT TO VOTE IN PERSON OR TO ATTEND THE
SPECIAL MEETING, BUT WILL ENSURE YOUR REPRESENTATION IF YOU CANNOT ATTEND. THE
PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE. PLEASE NOTE, HOWEVER, THAT IF
YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH
TO ATTEND AND VOTE AT THE MEETING, YOU MUST OBTAIN FROM SUCH BROKER, BANK OR
OTHER NOMINEE, A PROXY ISSUED IN YOUR NAME.
The Special Meeting proxy statement is dated April 27, 2000, and was first
mailed to PubliCARD shareholders on or about April 27, 2000.
<PAGE> 3
SUMMARY TERM SHEET
This summary term sheet, together with the "Questions & Answers About the
Special Meeting" on the page following this summary term sheet, highlight
important selected information from this proxy statement relating to our
proposed Plan of Asset Transfer. This summary term sheet and this question and
answer section may not contain all the information that is important to you. To
more fully understand the proposed Plan of Asset Transfer and for a more
complete description of the legal terms of the proposed Plan of Asset Transfer,
you should read carefully this entire proxy statement before voting on the
proposed Plan of Asset Transfer. We have included page references
parenthetically to direct you to more complete descriptions of the topics
presented in this summary term sheet.
THE PLAN OF ASSET TRANSFER (PAGE 5)
Upon approval of the Plan of Asset Transfer the PubliCARD Board of
Directors will be authorized to sell the Company's Greystone Peripherals, Inc.,
Greenwald Industries Inc., Greenwald Intellicard, Inc. and Amazing! Smart Card
Technologies, Inc. subsidiaries or the property or assets thereof on such terms
and conditions (including the consideration to be received by PubliCARD) as may
be determined by the Board of Directors, in its sole discretion. You should read
the description of the Plan of Asset Transfer in this proxy statement under the
headings "Proposed Plan of Asset Transfer" and "Background and Reasons for the
proposed Plan" carefully.
VOTE REQUIRED (PAGE 8)
Under the Company's Articles of Incorporation, the proposed Plan of Asset
Transfer must be approved by a majority of the outstanding shares of PubliCARD
common stock entitled to vote on the proposed Plan of Asset Transfer at the
special meeting.
RECOMMENDATION OF PUBLICARD'S BOARD OF DIRECTORS
Based on all the factors the PubliCARD Board of Directors considered, the
Board of Directors unanimously approved the Plan of Asset Transfer and decided
to submit it to PubliCARD's shareholders for approval.
REASONS FOR THE PLAN OF ASSET TRANSFER (PAGE 7)
In reaching its conclusion to approve and recommend the Plan of Asset
Transfer, the Board of Directors considered, among other factors, the Company's
announced intent to:
- focus on the broadband market;
- dispose of its non-core assets; and
- redeploy its existing technology to facilitate television and electronic
commerce.
DISSENTERS' RIGHTS (PAGE 9)
Under the Pennsylvania Business Corporation Law holders of shares of common
stock of PubliCARD will not be entitled to dissenters' rights with respect to
the Plan of Asset Transfer.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES (PAGE 8)
The sale of PubliCARD's subsidiaries or the properties and assets thereof
pursuant to the Plan of Asset Transfer are expected to be taxable transactions
to the Company for federal income tax purposes and will have no effect on the
individual shareholders.
ACCOUNTING TREATMENT (PAGE 8)
The subsidiaries to be sold pursuant to the Plan of Asset Transfer have
been accounted for as discontinued operations in accordance with generally
accepted accounting principles.
i
<PAGE> 4
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING
Q. WHO IS ENTITLED TO VOTE AT THE SPECIAL MEETING?
A. Shareholders as of the close of business on April 26, 2000, the record date.
Q. WHAT HAPPENS IF I SELL MY PUBLICARD SHARES BEFORE THE SPECIAL MEETING?
A. If you transfer your shares of PubliCARD common stock after the record date,
but before the Special Meeting, you will retain your right to vote at the
Special Meeting.
Q. IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE MY
SHARES FOR ME?
A. Generally, your broker will not have the power to vote your shares. Your
broker will vote your shares only if you provide him or her with instructions
on how to vote. Any failure to instruct your broker on how to vote in favor
of the Plan of Asset Transfer will result in your shares not being voted,
which will have the effect of a vote "against" the proposed Plan of Asset
Transfer. You should follow the directions provided by your broker on how to
instruct your broker to vote your shares.
Q. MAY I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?
A. Yes. You may revoke it any time before the Special Meeting by:
- giving written notice of your revocation to PubliCARD's Secretary;
- filing a revoking instrument or a duly executed proxy bearing a later
date with the Secretary; or
- attending the Special Meeting and voting in person.
Q. WHEN AND WHERE IS THE SPECIAL MEETING?
A. The Special Meeting will take place at the offices of Kaye, Scholer, Fierman,
Hays & Handler, LLP, 425 Park Avenue, New York, New York, on May 26, 2000 at
10:00 a.m. local time.
Q. WHAT DO I NEED TO DO NOW?
A. We urge you to read this proxy statement carefully and to consider how the
Plan of Asset Transfer affects you as a shareholder.
Q. HOW DO I VOTE?
A. You can vote in one of the following ways:
You can either vote in person at the Special Meeting or by proxy. If you
choose to vote by proxy, indicate on your proxy card how you want to vote, and
sign and mail your proxy card in the enclosed return envelope as soon as
possible so that your shares will be represented at the Special Meeting. If you
do attend the Special Meeting you may still revoke your proxy and vote in
person. If you sign and send in your proxy and do not indicate how you want to
vote, your proxy will be counted as a vote "FOR" the Plan of Asset Transfer,
unless your shares are held in a brokerage account in which case you should
follow the directions provided by your broker on how to instruct your broker to
vote your shares.
Q. WHO CAN HELP ANSWER MY QUESTIONS?
A. If you would like additional copies of this proxy statement or if you have
questions about the Plan of Asset Transfer, including how to complete and
return your proxy card or would like more information about PubliCARD, you
should contact:
PubliCARD, Inc.
620 Fifth Avenue
Rockefeller Center
New York, NY 10020
Attn: Antonio DeLise
Vice President, Chief Financial Officer and Secretary
Telephone: (212)489-8021
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PUBLICARD, INC.
620 FIFTH AVENUE
ROCKEFELLER CENTER
NEW YORK, NEW YORK 10020
(212) 489-8021
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
MAY 26, 2000
------------------------
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of PubliCARD, Inc., a Pennsylvania corporation
("PubliCARD" or the "Company"), to be voted at the Special Meeting of
Shareholders of the Company referred to in the foregoing Notice (the "Special
Meeting"). All proxies received pursuant to this solicitation will be voted,
and, where a choice is specified as to the proposal described in the foregoing
Notice, they will be voted in accordance with that specification. If no choice
is specified with respect to the proposal, the proxy will be voted in favor of
the proposal. Shareholders who execute proxies may revoke them at any time
before they are voted by written notice delivered to the Secretary of the
Company. The Company anticipates that mailing of the proxy material to
shareholders will commence on or about April 27, 2000.
RECORD DATE AND VOTING SECURITIES
Only holders of Common Stock of record at the close of business on April
26, 2000 (the "Record Date") are entitled to notice of and to vote at the
meeting. On that date the Company had outstanding and entitled to vote
23,307,726 shares of Common Stock, par value $.10 per share (the "Common
Stock"). Each outstanding share entitles the record holder to one vote on each
matter. Abstentions and broker non-votes are each included in the determination
of the number of shares present and voting. Each is tabulated separately.
Abstentions are counted in tabulations of the votes cast on proposals presented
to shareholders, whereas broker non-votes are not.
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<PAGE> 6
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth, as of April 5, 2000, except as otherwise
noted, the beneficial ownership of the Company's Common Stock by each person who
owns of record or is known by the Company to own beneficially more than 5% of
the Common Stock of the Company.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS
------------------------------------ ----------------------- ----------------
<S> <C> <C>
Taube Hodson Stonex Partners Limited....................... 2,720,000(2) 11.9%
27 St. James Place
London
SWIA INR
United Kingdom
Harry I. Freund............................................ 2,329,963(3) 9.7%
c/o PubliCARD, Inc.
620 Fifth Avenue
Rockefeller Center
New York, NY 10020
Jay S. Goldsmith........................................... 2,334,153(4) 9.7%
c/o PubliCARD, Inc.
620 Fifth Avenue
Rockefeller Center
New York, NY 10020
</TABLE>
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(1) Calculated in accordance with Rule 13d-3 adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended.
(2) Based on a statement on Schedule 13G filed with the Securities and Exchange
Commission on October 11, 1999. Taube Hodson Stonex Partners Limited is a
discretionary investment advisor to J. Rothschild Assurance Life Fund, St.
James Place International Unit Trust, J. Rothschild Assurance Pension Fund,
J. Rothschild International Assurance Managed Fund, J. Rothschild
International Assurance US Managed Fund, TDG Funds Limited, GAM Worldwide
Fund and The Partners Fund. Taube Hodson Stonex Partners has power to vote
and direct the vote and power to dispose and direct the disposition of
shares held by such funds.
(3) Includes shares of Common Stock which may be acquired by Mr. Freund within
60 days as follows: 541,912 shares through the exercise of stock options and
688,861 shares through the exercise of stock purchase warrants. Also
includes 5,454 shares of Common Stock held by Mr. Freund's spouse over which
Mr. Freund has shared voting and investment power but as to which he
disclaims any beneficial ownership interest, and includes 273,625 shares
that may be deemed to be owned beneficially by Mr. Freund which are held by
Balfour Investors, Inc. ("Balfour") for its clients in discretionary
accounts, as to which Mr. Freund disclaims beneficial ownership. Messrs.
Freund and Goldsmith are Chairman and President, respectively, and the only
shareholders of Balfour. The discretionary clients of Balfour have the sole
power to vote and direct the vote of the shares held in their account.
Balfour and its discretionary clients have shared power to dispose of or
direct the disposition of the shares held in such clients' accounts. At
present, Balfour has the right to receive or the power to direct the receipt
of dividends from, or the proceeds from the sale of the Company's Common
Stock for all of its discretionary clients. Also includes 13,000 shares that
may be deemed to be owned beneficially by Mr. Freund which are held by the
Balfour Defined Benefit Pension Plan ("the Plan"), for which Mr. Freund is a
Trustee and Plan Administrator and in which he participates. Mr. Freund
disclaims ownership of 5,850 shares of such 13,000 shares.
(4) Includes shares of Common Stock which may be acquired by Mr. Goldsmith
within 60 days as follows: 541,912 shares through the exercise of stock
options and 744,930 shares through the exercise of stock
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<PAGE> 7
purchase warrants. Also includes 1,250 shares of Common Stock held by
Mr. Goldsmith's spouse over which Mr. Goldsmith has shared voting and
investment power but as to which he disclaims any beneficial interest, and
includes 273,625 shares that may be deemed to be owned beneficially by Mr.
Goldsmith which are held by Balfour for its clients in discretionary
accounts as to which Mr. Goldsmith disclaims beneficial ownership (see
Note 2 above). Also includes 13,000 shares that may be deemed to be owned
beneficially by Mr. Goldsmith which are held by the Balfour Defined
Benefit Pension Plan, of which Mr. Goldsmith is a Trustee and Plan
Administrator and in which he participates. Mr. Goldsmith disclaims
ownership of 7,280 shares of Common Stock held by the Plan.
SECURITY OWNERSHIP OF MANAGEMENT
The following information is furnished as of April 5, 2000 with respect to
each class of equity securities of the Company beneficially owned by all
directors and officers of the Company.
The information concerning the directors and officers and their security
holdings has been furnished by them to the Company.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF SHARES
OF COMMON STOCK AS OF PERCENT
NAME POSITION APRIL 5, 2000(1) OF CLASS(1)
---- --------------------------- ------------------------------ -----------
<S> <C> <C> <C>
Harry I. Freund............ Director and Chairman of 2,329,963(2) 9.7%
the Board
Jay S. Goldsmith........... Director and Vice Chairman 2,334,153(3) 9.7%
of the Board
Jan-Erik Rottinghuis....... Director, President and 200,000(4) Less than 1%
Chief Executive Officer
Clifford B. Cohn........... Director 259,180(5) 1.1%
David L. Herman............ Director 315,108(6) 1.4%
L.G. Schafran.............. Director 366,159(7) 1.6%
Hatim A. Tyabji............ Director 155,000(8) Less than 1%
M. Richard Phillimore...... Executive Vice President -- 150,000(9) Less than 1%
Strategy
Antonio L. DeLise.......... Vice President, Chief 152,000(10) Less than 1%
Financial Officer and
Secretary
James J. Weis.............. Former President, Chief 430,181(11) 1.9%
Executive Officer and
Director
All directors and officers
as a
group (10 persons)....... 6,691,744(12) 25.3%
</TABLE>
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(1) Calculated in accordance with Rule 13d-3 adopted by the Securities and
Exchange Commission under the Securities and Exchange Act of 1934, as
amended.
(2) Includes shares of Common Stock which may be acquired by Mr. Freund within
60 days as follows: 541,912 shares through the exercise of stock options
and 688,861 shares through the exercise of stock purchase warrants. Also
includes 5,454 shares of Common Stock held by Mr. Freund's spouse over
which Mr. Freund has shared voting and investment power but as to which he
disclaims any beneficial ownership interest, and includes 273,625 shares
that may be deemed to be owned beneficially by Mr. Freund which are held by
Balfour for its clients in discretionary accounts, as to which Mr. Freund
disclaims beneficial ownership. Messrs. Freund and Goldsmith are Chairman
and President, respectively, and the only shareholders of Balfour. The
discretionary clients of Balfour have the sole power to vote and direct the
vote of the shares held in their account. Balfour and its discretionary
clients have shared power to dispose of or direct the disposition of the
shares held in such clients' accounts. At
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<PAGE> 8
present, Balfour has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of the Company's
Common Stock for all of its discretionary clients. Also includes 13,000
shares that may be deemed to be owned beneficially by Mr. Freund which are
held by the Balfour Defined Benefit Pension Plan ("the Plan"), for which
Mr. Freund is a Trustee and Plan Administrator and in which he
participates. Mr. Freund disclaims ownership of 5,850 shares of such 13,000
shares.
(3) Includes shares of Common Stock which may be acquired by Mr. Goldsmith
within 60 days as follows: 541,912 shares through the exercise of stock
options and 744,930 shares through the exercise of stock purchase warrants.
Also includes 1,250 shares of Common Stock held by Mr. Goldsmith's spouse
over which Mr. Goldsmith has shared voting and investment power but as to
which he disclaims any beneficial interest, and includes 273,625 shares
that may be deemed to be owned beneficially by Mr. Goldsmith which are held
by Balfour for its clients in discretionary accounts as to which Mr.
Goldsmith disclaims beneficial ownership (see Note 2 above). Also includes
13,000 shares that may be deemed to be owned beneficially by Mr. Goldsmith
which are held by the Balfour Defined Benefit Pension Plan, of which Mr.
Goldsmith is a Trustee and Plan Administrator and in which he participates.
Mr. Goldsmith disclaims ownership of 7,280 shares of Common Stock held by
the Plan.
(4) Mr. Rottinghuis became the Company's President and Chief Executive Officer
in early 2000. Pursuant to the employment between Mr. Rottinghuis and the
Company, the Company issued 200,000 shares of Common Stock to Mr.
Rottinghuis on November 2, 1999.
(5) Includes 182,059 shares which may be acquired by Mr. Cohn within 60 days
through the exercise of stock options.
(6) Includes shares of Common Stock which may be acquired by Mr. Herman within
60 days as follows: 112,058 shares through the exercise of stock options
and 40,050 shares through the exercise of stock purchase warrants.
(7) Includes 212,059 shares which may be acquired by Mr. Schafran within 60
days through the exercise of stock options. Also includes 114,050 shares of
Common Stock and 40,050 shares that may be acquired through the exercise of
stock purchase warrants held by Mr. Schafran's spouse as to which Mr.
Schafran disclaims any beneficial interest.
(8) Includes 155,000 shares which may be acquired by Mr. Tyabji within 60 days
through the exercise of stock options.
(9) Includes 100,000 shares of Common Stock which may be acquired by Mr.
Phillimore within 60 days through the exercise of stock options.
(10) Includes 150,000 shares which may be acquired by Mr. DeLise within 60 days
through the exercise of stock options.
(11) Mr. Weis was President and Chief Executive Officer of the Company through
November 3, 1999 and a Director through November 5, 1999. Includes 119,000
shares which may be acquired by Mr. Weis within 60 days through the
exercise of stock options.
(12) Includes shares of Common Stock which may be acquired by such persons
within 60 days as follows: 2,114,000 shares through the exercise of stock
options and 1,513,891 shares through the exercise of stock purchase
warrants.
4
<PAGE> 9
PROPOSAL 1.
PROPOSED PLAN OF ASSET TRANSFER
INTRODUCTION
At the Special Meeting, shareholders will be asked to approve a Plan of
Asset Transfer authorizing the sale of the Company's Greystone Peripherals, Inc.
("Greystone"), Greenwald Industries Inc. ("Industries"), Greenwald Intellicard,
Inc. ("Intellicard") and Amazing! Smart Card Technologies, Inc. ("Amazing")
subsidiaries or the property or assets thereof on such terms and conditions
(including the consideration to be received by the Company) as may be determined
by the Company's Board of Directors, in its sole discretion (the "Proposed
Plan"). Currently, the Company is in negotiations with a potential buyer of its
Industries and Intellicard subsidiaries, has engaged a broker to assist in the
sale of its Greystone subsidiary and is exploring various disposition
alternatives relative to Amazing.
Under Pennsylvania law, the approval of shareholders is required in order
to sell "all or substantially all" of the property and assets of the Company. It
is not clear what constitutes "substantially all" of such property and assets
and whether individual sales should be aggregated in making such determination.
The Company believes that the potential sale of Greystone, Intellicard or
Amazing (or the assets or property thereof), whether considered individually or
together, would not constitute a sale of "substantially all" of the property and
assets of the Company under Pennsylvania law. However, the Company is also
currently pursuing the potential sale of Industries. The Company believes that
the sale of Industries individually or the sale of Greystone, Intellicard or
Amazing when viewed together with the sale of Industries, would constitute a
sale of "substantially all" of the assets of the Company under Pennsylvania law.
Therefore, the Company is seeking shareholder approval for the proposed sale of
any or all of Greystone, Industries, Intellicard and Amazing (or the property or
assets thereof) under the Proposed Plan. At this time the Company has only begun
to explore the possible sale of Greystone, Industries, Intellicard and certain
assets of Amazing. Accordingly, the shareholders are being asked to approve a
Plan of Asset Transfer authorizing the sale of Greystone, Industries,
Intellicard and Amazing, or the property or assets thereof on such terms and
conditions (including the consideration to be received by the Company) as may be
determined by the Company's Board of Directors, in its sole discretion. If the
Proposed Plan is not approved, the Board may still authorize the sale of any one
of Greystone, Industries, Intellicard or Amazing, or the property or assets
thereof, if it determines, after receiving an opinion of counsel, that such sale
will not constitute "substantially all" of its property and assets. See
"Shareholder Approval Requirement Under Pennsylvania Law."
Holders of shares of Common Stock will not be entitled to dissenters'
rights with respect to the Proposed Plan. See "Absence of Dissenters' Rights"
below.
On March 6, 2000, the Board of Directors of the Company unanimously
approved the Proposed Plan and directed that it be submitted to shareholders of
the Company for approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED PLAN
AT THE SPECIAL MEETING AND IT IS INTENDED THAT PROXIES NOT MARKED TO THE
CONTRARY AND NOT DESIGNATED AS BROKER NON-VOTES WILL BE VOTED IN FAVOR OF
APPROVAL OF THE PROPOSED PLAN.
THE COMPANY
Background
The Company entered the smart card industry in early 1998, and began to
develop solutions for the conditional access, security, payment system and data
storage needs of industries utilizing smart card technology. The Company made a
series of acquisitions to enhance its position in the smart card industry:
- In February 1998, the Company acquired, through a joint venture
arrangement in Intellicard, the assets and intellectual property of
Intellicard Systems, Ltd. Intellicard provides smart cards, smart card
readers, value transfer stations, card management software and machine
interface boards for the
5
<PAGE> 10
commercial laundry appliance industry. The Company initially acquired 65%
of Intellicard, and acquired the remaining 35% in February 2000.
- In November 1998, the Company acquired Tritheim Technologies, Inc., which
develops conditional access and security products for the software
industry, computers and the electronic information and digital video
broadcast, also known as DVB, industry.
- In February 1999, the Company acquired Amazing, a developer of consumer
smart card solutions and a manufacturer of customized smart cards.
- In February 1999, the Company acquired Greystone, a developer of hard
disk duplicators.
- In November 1999, the Company acquired Absec Limited, a designer of
closed environment solutions, including small value electronic cash
systems and database management solutions. Through Absec, the Company
provides systems for closed populations to allow individual user access,
unique rights and monitoring.
While the Company developed a number of successful smart card products and
solutions, its operations were fragmented throughout a variety of markets. The
Company's Board of Directors, together with its management team, determined to
integrate its operations and focus on a single market in which:
- high growth potential exists;
- the Company has established relationships;
- the Company has already deployed products and gained credibility; and
- the Company possesses core technologies and competencies.
The Company determined that it could leverage its existing technology for
deployment in the rapidly growing broadband market, which it had already
penetrated and which the Company believes exhibits each of the characteristics
identified above. The Company currently is positioning itself to be a leading
provider of end-to-end solutions to enable access and secure content and
transactions for the broadband market. The Company's broadband initiative is
driven by its proprietary technology and proven engineering and design talent.
The Company's proprietary technologies facilitate content protection and
transaction security.
To effect this new business strategy, the Board of Directors of the Company
adopted the Plan of Asset Transfer on March 6, 2000, pursuant to which the
Company will divest its non-core operations. The Company currently is in
negotiations with a potential buyer of its Industries and Intellicard
subsidiaries. Industries is a designer and manufacturer of coin meter systems
used in the commercial laundry appliance industry. If these negotiations do not
result in a definitive agreement, the Company intends to seek an alternative
buyer of the Intellicard and Industries subsidiaries. Pursuant to the plan of
disposition, the Company is exploring various disposition alternatives relative
to Amazing and has engaged a broker to seek a buyer of Greystone.
The Company will pursue its new business strategy through the integration
of its remaining operations. As a result of this integration, the Company's
product range includes application specific integrated circuits, also known as
ASICs, for television set-top boxes, secure electronic commerce, Internet
security and software copy protection. The Company's ASICs incorporate multiple
chip set functionality into a single integrated circuit board. In addition, the
Company is developing point-of-deployment applications, also known as PODs,
which scramble and unscramble data entering and exiting set-top boxes.
In addition, the Company will continue to design closed environment
solutions, including small value electronic cash systems and database management
solutions. The Company provides systems for closed populations to allow
individual user access, unique rights and monitoring.
The principal executive offices of the Company are located at 620 Fifth
Avenue, Rockefeller Center, New York, NY 10020 and its telephone number is (212)
489-8021.
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<PAGE> 11
BACKGROUND AND REASONS FOR THE PROPOSED PLAN
Background
Beginning in 2000, the Board considered the prospect of selling a
significant portion of the Company's subsidiaries. The Board undertook such
consideration as a result of PubliCARD's adoption of a new corporate strategy to
capitalize on its core technologies and focus solely on becoming a leading
provider of end-to-end solutions to enable access and secure content and
transactions for the broadband market. See "Reasons for the Proposed Plan." This
resulted in the Board's determination in early 2000 to explore the possibility
of selling several of its non-core operations by commencing efforts to seek
potential buyers for Greystone, Industries, Intellicard and Amazing, or the
property or assets thereof. The decision by the Board to explore the sale of
these subsidiaries resulted from consideration of the following factors: (i) the
types of businesses operated by each of these subsidiaries, (ii) the Company's
ability to find likely buyers and successfully negotiate a sale, (iii) sale
prices reasonably expected to be obtained and (iv) the respective subsidiaries'
potential contributions to the Company's new corporate strategy. The Board
ascribed significant weight to factors (i) and (v).
Description of Proposed Plan and Sale Process
Industries and Intellicard. On March 6, 2000, the Company's Board of
Directors unanimously approved the Proposed Plan and determined that it would be
in the best interests of the Company to sell its Industries and Intellicard
subsidiaries. This decision was based on the Company's adoption of a new
corporate strategy which includes the disposition of its non-core assets. Since
that time, the Company has begun preliminary negotiations with a potential buyer
for its Industries and Intellicard subsidiaries. There can be no assurance that
the Company will be successful in finding a buyer for either Industries and
Intellicard on terms that it would find acceptable, or that any offer would
result in a sale of either of its Industries and Intellicard subsidiaries.
Greystone. As part of the Company's adoption of its new corporate
strategy, the Company engaged H. Russel Lemcke Group, Inc. on March 7, 2000, in
order to initiate the process of assessing the market for Greystone and
identifying potential purchasers. A confidential offering memorandum describing
Greystone was prepared and distributed to potential buyers. There can be no
assurance that the Company will be successful in finding a buyer for Greystone
on terms that it would find acceptable, or that any offer would result in a sale
of its Greystone subsidiary.
Amazing. The Company's Board of Directors has begun exploring various
disposition alternatives relative to the smart card manufacturing business of
Amazing. This decision was based on the Company's decision to discontinue its
activities in smart card manufacturing as part of the Company's new corporate
strategy. The Company has had preliminary discussions with potential buyers
regarding the sale of certain assets of Amazing. There can be no assurance that
the Company will be successful in finding a buyer for the assets of Amazing on
terms that it would find acceptable, or that any offer would result in a sale of
the assets of its Amazing subsidiary.
Reasons for the Proposed Plan
In making the decision to sell Greystone, Industries, Intellicard and
Amazing, the Company's Board of Directors considered the following. The Company
believes that its current operations are fragmented throughout a variety of
markets and has determined that an integrated operation, focused on a single
high growth market provides a better platform for long-term success As such, the
Board of Directors decided to dispose of its non-core assets and leverage its
existing technology for deployment in the broadband market. The Company is
positioning itself to be a leading provider of end-to-end solutions to enable
access and secure content and transactions for the broadband market. Ultimately,
the Company intends to deploy software solutions to facilitate
television-commerce and electronic-commerce through consumer television sets.
The Company's broadband initiative is driven by its proprietary technology and
proven engineering and design talent. The Company's proprietary technologies
facilitate content protection and transaction security. The Company does not
believe that the businesses to be disposed of pursuant to the Proposed Plan will
provide significant contributions to its broadband initiative.
7
<PAGE> 12
Past Contacts, Transactions or Negotiations
On December 17, 1999 a potential buyer approached the Company about its
Industries and Intellicard subsidiaries. The Company initially met with the
potential buyer on January 11, 2000. The Company and the potential buyer entered
into a confidentiality agreement on January 21, 2000. Since that date, the
Company and the potential buyer have been involved in preliminary negotiations.
As of the mailing date of this Proxy Statement, such discussions were
continuing.
On March 7, 2000, the Company engaged H. Russel Lemcke Group, Inc. in order
to initiate the process of assessing the market for Greystone and identifying
potential purchasers. On April 20, 2000, H. Russel Lemcke Group, Inc.
distributed a confidential offering memorandum to potential buyers of the
Company's Greystone subsidiary.
USE OF PROCEEDS
The Company plans to use the proceeds from the sales of Greystone,
Industries, Intellicard and Amazing (or the property or assets thereof) to
expand the Company's sales and marketing efforts and for new product
development, working capital and capital expenditures. The Company intends to
further its penetration into the broadband market by leveraging its most
important assets, its core technology and its engineering and management
talents.
SHAREHOLDER APPROVAL REQUIREMENT UNDER PENNSYLVANIA LAW
Pursuant to Sections 1932 and 1924 of the Pennsylvania Business Corporation
Law ("PABCL"), shareholder approval is required in order to sell "all or
substantially all" of the property and assets of the Company (the "Shareholder
Approval Requirement"). It is not clear what constitutes "substantially all" of
such property and assets and whether individual sales should be aggregated in
making such determination. The Company believes that the potential sale of
either of Greystone, Intellicard or Amazing (or the property or assets thereof),
whether considered individually or together, would not constitute a sale of
"substantially all" of the property and assets of the Company within the meaning
of PABCL Section 1932. However, the Company is also currently pursuing the
potential sale of Industries. The Company believes that the sale of Industries
individually or the sale of Greystone, Intellicard or Amazing when viewed
together with the sale of Industries, would constitute a sale of "substantially
all" of the assets of the Company within the meaning of PABCL Section 1932.
Therefore, the Company is seeking shareholder approval of such proposed sale of
any or all of Greystone, Industries, Intellicard or Amazing (or the property or
assets thereof) under the Proposed Plan. At this time the Company has only begun
to explore the possible sale of Greystone, Industries, Intellicard and certain
assets of Amazing. Accordingly, the shareholders are being asked to approve a
Plan of Asset Transfer authorizing the sales of Greystone, Industries,
Intellicard and Amazing, or the property or assets thereof, on such terms and
conditions (including the consideration therefor) as may be determined by the
Company's Board of Directors, in its sole discretion. If the Proposed Plan is
not approved, the Board may still authorize the sale of any of its subsidiaries
if it determines, after receiving an opinion of counsel that such sale will not
constitute "substantially all" of its property and assets.
Pursuant to the Company's Articles of Incorporation, the affirmative vote
of a majority of the outstanding Common Stock is required for the Proposed Plan
to be approved and adopted by the shareholders.
ACCOUNTING TREATMENT
The subsidiaries to be sold pursuant to the Proposed Plan have been
accounted for as discontinued operations in accordance with generally accepted
accounting principles.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain of the expected U.S.
federal income tax consequences of the potential disposition of certain of the
subsidiaries of the Company pursuant to the Proposed Plan in exchange for cash.
Shareholders of the Company should also be aware that the tax consequences of
the proposed transactions are governed by the Internal Revenue Code of 1986, as
amended, and interpretations, rulings and regulations which are subject to
change, including changes which may be applied retroactively.
8
<PAGE> 13
The potential sales of Greystone, Industries, Intellicard and Amazing will
be taxable transactions to the Company for federal income tax purposes. It is
expected that income generated by such sales, if any, will be substantially
offset by the Company's net operating loss carryforwards.
REGULATORY APPROVALS
It cannot be determined at this time what, if any, regulatory requirements
will need to be complied with or approvals obtained in order to consummate the
sales of Greystone, Industries, Intellicard and Amazing, or the sale of the
property or assets thereof, because the Proposed Plan includes the sale of these
subsidiaries or their assets pursuant to terms and conditions to be determined
by the Board of Directors at a future date.
ABSENCE OF DISSENTERS' RIGHTS
Under the PABCL, a shareholder has the right to dissent from, and to obtain
payment of the fair value of his shares in the event of a sale of all or
substantially all of a corporation's assets pursuant to a plan of asset
transfer, except that the holders of the shares of any class or series of shares
that, at the record date fixed to determine the shareholders entitled to notice
of and to vote at the meeting at which a plan of asset transfer is to be voted
on, is registered under the Exchange Act of 1934, shall not have the right to
obtain payment of the fair value of any such shares. On the Record Date, the
Company's Common Stock was registered under the Exchange Act of 1934.
Accordingly, under Pennsylvania Law holders of shares of Common Stock will not
be entitled to any dissenters' rights with respect to the Proposed Plan.
CHANGES IN THE RIGHTS OF SHAREHOLDERS
Due to the fact that the Proposed Plan involves the sale of assets of the
Company or its subsidiaries for cash or other consideration to be paid to the
Company or such subsidiary, the shareholders of the Company will retain their
equity interests in the Company following the consummation of the Proposed Plan.
Accordingly, there should not be any differences in the rights of security
holders of the Company as a result of the Proposed Plan.
PRO FORMA FINANCIAL STATEMENTS
The following unaudited pro forma financial statements give effect to the
disposition by the Company of its Greystone, Industries and Intellicard and
Amazing subsidiaries. The pro forma financial information is based on the
historical financial statements of the Company, adjusted to give effect to the
dispositions of Greystone, Industries, Intellicard and Amazing, and on estimates
and assumptions set forth below and in the accompanying notes. Greystone,
Industries, Intellicard and Amazing have been reflected as discontinued
operations in the Company's historically reported financial statements.
The pro-forma condensed balance sheet presents the estimated effect of the
Proposed Plan as if the sales of the Company's subsidiaries had occurred as of
December 31, 1999. The Company is not including a pro forma condensed statement
of income (loss) for the year ended December 31, 1999 as the historically
reported financial statements present Greystone, Industries, Intellicard and
Amazing as discontinued operations and there are no pro forma adjustments. See
"Selected Financial Data" for the Statement of Income (loss) for the year ended
December 31, 1999.
The unaudited pro forma information is based on estimates, available
information and certain assumptions made by management. The pro forma condensed
balance sheet is not necessarily indicative of future operations or the actual
results that would have occurred had the disposition been consummated at the
date indicated above. The pro forma financial information should be read in
conjunction with the Company's historical financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, filed on March 30, 2000.
9
<PAGE> 14
PUBLICARD, INC.
AND SUBSIDIARY COMPANIES
PRO FORMA CONDENSED BALANCE SHEET AS OF
DECEMBER 31, 1999
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AS REPORTED ADJUSTMENTS(A) BALANCES
----------- -------------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash, including short-term investments.................. $18,236 $16,500 $34,736
Trade receivables, less allowance for doubtful
accounts............................................. 1,720 -- 1,720
Inventories............................................. 903 -- 903
Net assets of discontinued operations................... 10,832 (10,832) --
Other................................................... 613 -- 613
------- ------- -------
Total current assets............................ 32,304 5,668 37,972
------- ------- -------
Equipment and leasehold improvements, net................. 1,063 -- 1,063
Goodwill.................................................. 11,508 -- 11,508
Other assets.............................................. 613 -- 613
------- ------- -------
$45,488 $ 5,668 $51,156
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable.................................. $ 2,413 -- $ 2,413
Accrued liabilities..................................... 6,002 -- 6,002
------- ------- -------
Total current liabilities....................... 8,415 -- 8,415
Other non-current liabilities............................. 6,674 -- 6,674
------- ------- -------
Total liabilities............................... 15,089 -- 15,089
------- ------- -------
Shareholders' equity:
Common shares, $0.10 par value,
Authorized -- 40,000,000
Issued -- 26,191,189 in 1999......................... 2,619 -- 2,619
Additional paid-in capital.............................. 111,476 -- 111,476
Accumulated deficit..................................... (74,610) 5,668 68,942
Common shares held in treasury, at cost................. (8,649) -- (8,649)
Unearned compensation................................... (437) -- (437)
------- ------- -------
Total shareholders' equity...................... 30,399 -- 36,067
------- ------- -------
$45,488 $ 5,668 $51,156
======= ======= =======
</TABLE>
- ---------------
(a) The pro forma adjustments assume that the $25.0 million estimated proceeds
from the dispositions of four of the Company's subsidiaries or the property
or assets thereof, are used to pay transaction closing costs, liabilities
retained by the Company and other expenses associated with winding down
various activities of the subsidiaries to be sold.
10
<PAGE> 15
SELECTED FINANCIAL DATA
The selected financial data for the five years ended December 31, 1995
through December 31, 1999, have been derived from the consolidated financial
statements of the Company, which have been audited by Arthur Andersen LLP. The
information set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's Consolidated Financial Statements and the Notes thereto contained
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999, filed on March 30, 2000 which is incorporated by reference in this
Proxy Statement. The selected financial data has been restated to reflect the
Greystone, Industries, Intellicard and Amazing subsidiaries as discontinued
operations.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1999 1998 1997 1996 1995
-------- ------- ------- -------- -------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net sales..................................... $ 1,930 $ 3 $ -- $ -- --
Cost of sales................................. 978 7 -- -- --
-------- ------- ------- -------- -------
Gross margin................................ 952 (4) -- -- --
-------- ------- ------- -------- -------
Operating expenses:
General and administrative.................. 5,713 3,694 3,570 4,866 3,885
Sales and marketing......................... 2,862 21 -- -- --
Product development......................... 1,318 53 -- -- --
In-process research and development......... -- 2,800 -- -- --
Stock compensation expense.................. 2,759 145 -- -- --
Goodwill amortization....................... 1,749 128 -- -- --
Severance and other special charges......... 1,895 -- 768 -- --
-------- ------- ------- -------- -------
16,296 6,841 4,338 4,866 3,885
-------- ------- ------- -------- -------
Loss from operations........................ (15,344) (6,845) (4,338) (4,866) (3,885)
Other income (expenses):
Interest income............................. 561 528 667 476 138
Interest expense............................ (158) (191) (234) (594) (1,835)
Cost of retirement
benefits -- non-operating................ (1,028) (846) (768) (769) (744)
Other (expense) income...................... (751) (1,023) 31 9 (290)
-------- ------- ------- -------- -------
(1,376) (1,532) (304) (878) (2,731)
Loss from continuing operations before
taxes....................................... (16,720) (8,377) (4,642) (5,744) (6,616)
Income tax benefit............................ -- -- -- 2,412 --
-------- ------- ------- -------- -------
Loss from continuing operations............... (16,720) (8,377) (4,642) (3,332) (6,616)
Discontinued operations:
Income (loss) from discontinued
operations............................... (13,999) 2,302 2,954 1,544 6,325
Gain (loss) on disposition of discontinued
operations............................... (5,000) -- 609 12,783 --
-------- ------- ------- -------- -------
Net loss...................................... $(35,719) $(6,075) $(1,079) $ 10,995 $ (291)
======== ======= ======= ======== =======
Per common share:
Continuing operations....................... $ (.88) $ (.61) $ (.33) $ (.22) $ (.36)
Discontinued operations..................... (1.00) .17 .25 .94 .34
-------- ------- ------- -------- -------
$ (1.88) $ (.44) $ (.08) $ .72 $ (.02)
======== ======= ======= ======== =======
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1999 1998 1997 1996 1995
-------- ------- ------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital............................... $ 23,889 $23,420 $18,219 $ 22,071 $ 6,503
Total assets.................................. 45,488 36,875 23,130 27,544 29,414
Total debt.................................... -- -- -- -- 7,435
Other non-current liabilities................. 6,674 7,689 9,043 10,057 11,134
Shareholders' equity.......................... 30,399 21,917 10,873 13,996 (2,594)
</TABLE>
11
<PAGE> 16
CERTAIN INFORMATION REGARDING
MARKETS, MARKET PRICES AND DIVIDENDS
The Nasdaq National Market (the "Nasdaq") is the principal market on which
the Company's Common Stock is traded (trading symbol: CARD).
There were approximately 2,600 registered holders of record of Common Stock
as of April 26, 2000. The Company did not pay dividends on its Common Stock
during the prior five fiscal years and does not anticipate paying dividends in
the foreseeable future. The high and low sale prices for the Company's Common
Stock on the Nasdaq as of March 3, 2000, the day preceding the day the Proposed
Plan was approved and adopted by the Board of Directors, were $12.00 and $11.375
per share, respectively.
SHAREHOLDER PROPOSALS
The Company hereby gives notice to the shareholders that the date of the
Company's 2000 Annual Meeting will be Thursday, June 29, 2000 at a time and
location to be announced. As the Company is advancing the date of the 2000
Annual Meeting by more than 30 days from the date of the Company's 1999 Annual
Meeting, any proposals by shareholders of the Company intended to be included in
the Company's Proxy Statement relating to the Company's 2000 Annual Meeting of
Shareholders must be in writing and received by the Company at its principal
executive office no later than May 26, 2000.
GENERAL
The entire cost of soliciting management proxies will be borne by the
Company. Proxies will be solicited by mail and may be solicited personally by
directors, officers or regular employees of the Company, who will not be
compensated for their services. In order to support the Proposed Plan and to
help insure the presence of a quorum, the Company has retained the services of
D.F. King as proxy solicitor to assist in the solicitation of proxies for this
meeting. The fees payable to D.F. King in connection with this solicitation are
estimated to be $5,000. The Company will reimburse banks, brokerage firms, and
other custodians, nominees and fiduciaries for reasonable expenses incurred in
sending proxy material to their principals and obtaining their proxies.
INCORPORATION BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999 previously filed with the SEC by the Company pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), is hereby incorporated by
reference in this Proxy Statement.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the Special Meeting shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents. Any statement contained in a document, all or
a portion of which is incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of this Proxy
Statement to the extent that a statement contained herein, or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Proxy Statement.
12
<PAGE> 17
The Company will provide without charge to each person to whom a copy of
this Proxy Statement is delivered, upon the written or oral request of such
person and by first class mail or other equally prompt means within one business
day of receipt of such request, a copy of any or all of the documents referred
to above which have been or may be incorporated by reference in this Proxy
Statement, other than exhibits to such documents unless such exhibits are
specifically incorporated by reference. Such written or oral request should be
directed to: PubliCARD, Inc., 620 Fifth Avenue, Rockefeller Center, New York,
New York 10020, Attention: Secretary; telephone number (212) 489-8021.
By Order of the Board of Directors
/s/ Antonio L. Delise
ANTONIO L. DELISE
Secretary
April 27, 2000
13
<PAGE> 18
ANNEX A
PUBLICARD, INC.
AND SUBSIDIARY COMPANIES
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To PubliCARD, Inc.:
We have audited the accompanying consolidated balance sheets of PubliCARD,
Inc. (a Pennsylvania corporation) and subsidiary companies as of December 31,
1999 and 1998, and the related consolidated statements of income (loss),
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of PubliCARD, Inc. and
subsidiary companies as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.
/s/ ARTHUR ANDERSEN LLP
Stamford, Connecticut
March 20, 2000
<PAGE> 19
PROXY PUBLICARD, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints HARRY I. FREUND and JAY S. GOLDSMITH or either
of them, with full power of substitution, proxies to vote, unless such authority
is withheld, all shares registered in the name of the undersigned of common
stock of PubliCARD, Inc. (the 'Company') that the undersigned would be entitled
to vote at the Special Meeting of Shareholders of the Company to be held at the
offices of Kaye, Scholer, Fierman, Hays & Handler, LLP, 425 Park Avenue, New
York, New York on Friday, May 26, 2000 at 10:00 a.m., and any adjournments or
postponements thereof (the 'Special Meeting'), with all powers the undersigned
would possess if personally present, FOR the approval of the Plan of Asset
Transfer and on all other matters which otherwise come before the Special
Meeting in the discretion of the Board of Directors.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO INSTRUCTION TO THE CONTRARY IS INDICATED, THIS PROXY WILL BE VOTED
FOR THE PLAN OF ASSET TRANSFER.
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. To consider and act upon a proposal to approve a Plan of Asset Transfer
authorizing the sale of the Company's Greystone Peripherals, Inc., Greenwald
Industries Inc., Greenwald Intellicard, Inc. and Amazing! Smart Card
Technologies, Inc. subsidiaries or the property or assets thereof on such terms
and conditions (including the consideration to be received by PubliCARD) as may
be determined by the Company's Board of Directors, in its sole discretion;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed and dated on the reverse side.)
<PAGE> 20
(Continued from other side)
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Dated: , 2000
----------------------------------
Signature
----------------------------------
Signature if held jointly
NOTE: YOUR SIGNATURE SHOULD
CONFORM WITH YOUR NAME AS IT
APPEARS HEREON. IF SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE
YOUR FULL TITLE AS SUCH. IF STOCK
IS OWNED BY A PARTNERSHIP OR
CORPORATION, PLEASE INDICATE YOUR
CAPACITY IN SIGNING THE PROXY. IF
STOCK IS HELD IN JOINT OWNERSHIP,
ALL CO-OWNERS MUST SIGN.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
