SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[Amendment No. _________]
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 Section 240.14a-11(c) or
Section 240.14a-12
Datalink Systems Corporation
(Name of Registrant as Specified in Its Charter)
Datalink Systems Corporation
(Name of Person(s) Filing Proxy Statement)
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DATALINK SYSTEMS CORPORATION
1735 Technology Drive, Suite 790
San Jose, California 95110
(408) 367-1700
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 22, 1999
TO THE SHAREHOLDERS OF DATALINK SYSTEMS CORPORATION:
NOTICE HEREBY IS GIVEN that the Special Meeting of Shareholders of
Datalink Systems Corporation, a Nevada corporation (the "Company"), will be
held on Tuesday, June 22, 1999, at the Company's offices at 1735 Technology
Drive, Suite 790, San Jose, California 95110, at 10:00 a.m., Pacific Time, and
at any and all adjournments thereof, for the purpose of considering and acting
upon the following matters:
1. The approval of an amendment to the Company's Articles of
Incorporation to increase the number of authorized shares of the Company's
Common Stock from 8,000,000 to 50,000,000 shares.
2. The approval of an amendment to the Company's Employee Stock Option
Plan to increase the number of shares of Common Stock issuable upon the
exercise of options granted under the Plan from 500,000 shares to 1,000,000
shares.
3. The approval of an amendment to the Company's Articles of
Incorporation to change the name of the Company to "Datalink.net, Inc."
4. The transaction of such other business as may properly come before
the meeting or any adjournment thereof.
Only holders of the $.01 par value Common Stock and Series A Convertible
Preferred Stock of the Company of record at the close of business on May 19,
1999, will be entitled to notice of and to vote at the Meeting or at any
adjournment or adjournments thereof. The proxies are being solicited by the
Board of Directors of the Company.
All shareholders, whether or not they expect to attend the Special
Meeting of Shareholders in person, are urged to sign and date the enclosed
Proxy and return it promptly in the enclosed postage-paid envelope which
requires no additional postage if mailed in the United States. The giving of
a proxy will not affect your right to vote in person if you attend the
Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
ANTHONY N. LAPINE, PRESIDENT
San Jose, California
May 19, 1999
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DATALINK SYSTEMS CORPORATION
1735 Technology Drive, Suite 790
San Jose, California 95110
(408) 367-1700
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 22, 1999
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of Datalink Systems Corporation, a Nevada corporation (the
"Company"), for use at the Company's Special Meeting of Shareholders to be
held on Tuesday, June 22, 1999, at the Company's offices at 1735 Technology
Drive, Suite 790, San Jose, California 95110, at 10:00 a.m., Pacific Time, and
at any and all adjournments thereof. It is anticipated that this Proxy
Statement and the accompanying Proxy will be mailed to the Company's
shareholders on or about May 21, 1999.
Any person signing and returning the enclosed Proxy may revoke it at any
time before it is voted by giving written notice of such revocation to the
Company, or by voting in person at the Meeting. The expense of soliciting
proxies, including the cost of preparing, assembling and mailing this proxy
material to shareholders, will be borne by the Company. It is anticipated
that solicitations of proxies for the Meeting will be made only by use of the
mails; however, the Company may use the services of its Directors, Officers
and employees to solicit proxies personally or by telephone, without
additional salary or compensation to them. Brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the proxy soliciting
materials to the beneficial owners of the Company's shares held of record by
such persons, and the Company will reimburse such persons for their reasonable
out-of-pocket expenses incurred by them in that connection.
All shares represented by valid proxies will be voted in accordance
therewith at the Meeting.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the Company's
$.01 par value Common Stock and Series A Convertible Preferred Stock. Each
share of Common Stock entitles the holder to one (1) vote and each share of
Series A Convertible Preferred Stock is entitled to one (1) vote. The Common
Stock and Series A Preferred Stock vote together as a single class. Only
shareholders of record at the close of business on May 19, 1999, are entitled
to notice of and to vote at the Meeting or any adjournment thereof. On May
19, 1999, the Company had 2,441,327 shares of $.01 par value Common Stock and
2,337,753 shares of Series A Convertible Preferred Stock outstanding.
A majority of the Company's outstanding common stock represented in
person or by proxy shall constitute a quorum at the Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares
entitled to vote owned beneficially, as of May 19, 1999, by any person, who is
known to the Company to be the beneficial owner of 5% or more of the Company's
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Common and Preferred Stock considered as a single class, and, in addition, by
each Director of the Company and by all Directors and Officers of the Company
as a group. Information as to beneficial ownership is based upon statements
furnished to the Company by such persons.
AMOUNT AND
NAME AND ADDRESS NATURE OF BENE- PERCENT
OF BENEFICIAL OWNERS FICIAL OWNERSHIP OF CLASS
- -------------------- ---------------- --------
Anthony N. LaPine 915,000 (1) 17.5%
1735 Technology Drive, Suite 790
San Jose, California 95110-1333
Orbis Pension Trustees Ltd. 399,960 (2) 8.2%
One Connaught Place
London, England W11DY
J.F. Shea Co. Inc. as Nominee 399,990 (3) 8.2%
1997-60
Edmund H. Shea Jr. VP
655 Brea Canyon Road
Walnut, CA 91789
Commonwealth Associates 887,051 (4) 16.4%
830 Third Avenue
New York, NY 10022
Frederick M. Hoar 10,000 (6) *
555 Twin Dolphin Drive, Suite 650
Redwood City, CA 94065
David Ladd 10,000 (6) *
2800 Sand Hill Road
Menlo Park, CA 94025
Charles K. Dargan II 10,000 (6) *
515 S. Figueroa Street, 11th Fl.
Los Angeles, CA 90071
Robert L. Priddy 391,000 (7) 8.1%
3435 Kingsboro Road, Apt. 1601
Atlanta, GA 30326
Peter A. Allard 314,917 (8) 6.6%
Seawatch, The Garden
St. James, Barbados
British West Indies
Mitchell H. Cohen 350,000 7.3%
26 Simmons Lane
Greenwich, CT 06830
All Directors and Executive 1,456,000 (9) 26.8%
Officers as a Group (9 Persons)
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* Less than one percent.
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(1) Includes 200,000 shares owned directly by Mr. LaPine; 280,000 shares of
Series A Convertible Preferred Stock; 70,000 shares of Common Stock
underlying currently exercisable options held by Mr. LaPine; 25,000 shares of
Common Stock underlying currently exercisable options held by Mr. LaPine's
wife, Pamela LaPine; and 340,000 shares of Common Stock underlying warrants
held by Mr. LaPine.
(2) Includes 266,640 shares of Series A Convertible Preferred Stock; and
133,320 shares of Common Stock underlying warrants.
(3) Includes 266,660 shares of Series A Convertible Preferred Stock; and
133,330 shares of Common Stock underlying warrants.
(4) Represents 242,000 shares of Common Stock held by Commonwealth
Associates; 10,000 shares of Series A Convertible Preferred Stock held by
Commonwealth Associates; 434, 284 shares underlying warrants held by
Commonwealth Associates; and 200,767 shares of Common Stock underlying
warrants held by Michael S. Falk, the Chairman and controlling equity owner of
Commonwealth Associates.
(5) Includes 10,000 shares of Common Stock underlying currently exercisable
options; 17,760 shares of Series A Convertible Preferred Stock; and 18,880
shares of Common Stock underlying warrants.
(6) Represents shares of Common Stock underlying currently exercisable
options.
(7) Represents 231,000 shares of Common Stock; 100,000 shares of Series A
Convertible Preferred Stock; 50,000 shares of Common Stock underlying
Warrants; and 10,000 shares underlying currently exercisable options.
(8) Includes 214,917 shares of Common Stock held directly by Mr. Allard and
100,000 shares of Common Stock underlying currently exercisable warrants.
(9) Includes the shares listed above as beneficially owned by Messrs. LaPine,
Hoar, Ladd and Priddy, and 120,000 shares of Common Stock underlying options
held by other executive officers.
There are no known agreements, the operation of which may at a subsequent
date result in a change in control of the Company.
INCREASE IN AUTHORIZED COMMON STOCK
The Company's Board of Directors has approved, subject to the approval of
the Company's shareholders, an amendment to the Company's Articles of
Incorporation which would increase the number of shares of Common Stock which
the Company may issue from 8,000,000 shares to 50,000,000 shares.
The Board of Directors believes that it is necessary to increase the
number of authorized shares of Common Stock in order for the Company to have
sufficient shares available to meet its needs for current obligations under
outstanding preferred stock, options and warrants, and to be available for
other corporate purposes such as raising additional capital, possible
acquisitions, stock dividends, and other purposes for which the Board of
Directors deems advisable to issue additional shares. As of May 6, 1999, the
Company had 2,441,327 shares of Common Stock outstanding, and 5,377,802 shares
of Common Stock reserved for issuance upon the conversion or exercise of
outstanding preferred stock, warrants and options.
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Assuming that this proposed amendment is approved (not giving effect to
the proposed increase in the number of shares reserved under the 1996 Stock
Option Plan), the Company would have approximately 42,180,871 shares of Common
Stock authorized, unissued and unreserved, which the Board of Directors would
be able to authorize for issuance for any corporate purposes, at any time,
without obtaining further authorization from the holders of the Company's
Common Stock, unless such authorization is required by applicable law,
regulation or the rules of any stock exchange on which shares of the Company's
Common Stock may then be listed. No specific use of the additional shares is
presently contemplated. Holders of shares of Common Stock of the Company have
no preemptive rights in connection with the issuance of additional shares of
Common Stock.
The affirmative vote of a majority of the outstanding shares of the
Company's Common and Preferred Stock, voting as a single class, will be
required to approve the proposed amendment to the Articles of Incorporation
increasing the authorized Common Stock.
The Board of Directors recommends a vote FOR the proposed amendment to
the Articles of Incorporation.
AMENDMENT TO THE 1996 STOCK OPTION PLAN
DESCRIPTION OF THE PLAN
On June 10, 1996, the Company's Board of Directors approved the
establishment of a Stock Option Plan (the "1996 Plan") and the Company's
shareholders approved the 1996 Plan on or about June 14, 1996. The Board of
Directors believes that the 1996 Plan advances the interests of the Company by
encouraging and providing for the acquisition of an equity interest in the
success of the Company by employees, officers, directors and consultants, and
by providing additional incentives and motivation toward superior Company
performance. The Board believes the 1996 Plan enables the Company to attract
and retain the services of key employees, officers, directors and consultants
upon whose judgment, interest and special effort the successful conduct of its
operations is largely dependent.
The 1996 Plan allows the Board to grant stock options from time to time
to employees, officers and directors of the Company and consultants to the
Company. The Board has the power to determine at the time the option is
granted whether the option will be an Incentive Stock Option (an option which
qualifies under Section 422 of the Internal Revenue Code of 1986) or an option
which is not an Incentive Stock Option. However, Incentive Stock Options may
only be granted to persons who are employees of the Company. Vesting
provisions are determined by the Board at the time options are granted. Prior
to the proposed amendment, the total number of shares of Common Stock subject
to options under the 1996 Plan may not exceed 500,000, subject to adjustment
in the event of certain recapitalization, reorganization and similar
transactions.
The Board of Directors may amend the 1996 Plan at any time, provided that
the Board of Directors may not amend the 1996 Plan to materially increase the
benefits accruing to Participants under the 1996 Plan, or materially change
the eligible class of employees without shareholder approval.
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AMENDMENT
On March 31, 1999, the Board of Directors voted, subject to shareholder
approval, to increase the number of shares of Common Stock subject to options
under the 1996 Plan from 500,000 to 1,000,000. The Board of Directors
believes that the proposed increase is necessary in order for the Company to
have sufficient flexibility to provide the amounts and types of incentives to
its officers, employees, directors and consultants which are deemed necessary
to encourage the Company's success.
As of May 1, 1999, stock options to purchase up to 439,764 shares of
Common Stock are outstanding under the 1996 Plan, and options to purchase
24,264 shares of Common Stock have been exercised.
VOTE REQUIRED; BOARD RECOMMENDATION
Approval of the amendment to the 1996 Plan requires the affirmative vote
of a majority of the shares of Common and Preferred Stock voting as a single
class represented at the meeting. The Board of Directors recommends a vote
FOR approval of the amendment to the 1996 Plan.
AMENDMENT TO ARTICLES OF
INCORPORATION CONCERNING NAME CHANGE
The Board of Directors has approved an amendment to the Articles of
Incorporation to change the name of the Company to "Datalink.net, Inc." The
new name is being proposed to better reflect the Company's strategy to
emphasize its electronic-commerce capabilities. All of the Company's products
are closely related to the Internet, and the new name emphasizes this
relationship. Beginning in January 1999, the Company began doing business
under the "Datalink.net" name and its trading symbol on the OTC Bulletin Board
was changed to "NETD".
An affirmative vote of a majority of the outstanding shares of Common and
Preferred Stock, voting as a single class, will be required to approve the
proposed amendment to the Company's Articles of Incorporation. The Board of
Directors recommends a vote FOR the proposed amendment.
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was not
aware of any other matter to be presented at the Meeting other than as et
forth herein. However, if any other matters are properly brought before the
Meeting, the shares represented by valid proxies will be voted with respect to
such matters in accordance with the judgment of the persons voting them. A
majority vote of the shares represented at the meeting is necessary to approve
any such matters.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
FOR THE ANNUAL MEETING TO BE HELD IN DECEMBER 1999
Any proposal by a shareholder intended to be presented at the Company's
Annual Meeting of Shareholders to be held in December 1999 must be received at
the offices of the Company, 1735 Technology Drive, Suite 790, San Jose,
California 95110, no later than July 9, 1999, in order to be included in the
Company's proxy statement and proxy relating to that meeting.
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Shareholders intending to bring any business before the Annual Meeting of
Shareholders to be held in December 1999 that is not to be included in the
Company's proxy statement and proxy related to that meeting must notify the
Company, in writing, prior to September 25, 1999, of the business to be
presented. Any such notices received after said date will be considered
untimely under Rule 14a(c)(1) under the Securities Exchange Act of 1934, as
amended.
ANTHONY N. LAPINE, PRESIDENT
San Jose, California
May 19, 1999
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P R O X Y
DATALINK SYSTEMS CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Anthony N. LaPine with the power to
appoint a substitute, and hereby authorizes him to represent and to vote as
designated below, all the shares of common stock of Datalink Systems
Corporation held of record by the undersigned on May 19, 1999, at the Special
Meeting of Shareholders to be held on June 22, 1999, or any adjournment
thereof.
1. The approval of an amendment to the Company's Articles of
Incorporation to increase the number of authorized shares of the Company's
Common Stock from 8,000,000 to 50,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. The approval of an amendment to the Company's Employee Stock Option
Plan to increase the number of shares of Common Stock issuable upon the
exercise of options granted under the Plan from 500,000 shares to 1,000,000
shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The approval of an amendment to the Company's Articles of
Incorporation to change the name of the Company to "Datalink.net, Inc."
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To transact such other business as may properly come before the
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL NOS. 1, 2 AND 3.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN
ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATIONS ABOVE. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE
TIME OF THE MAILING OF THE NOTICE OF THE SPECIAL MEETING OF SHAREHOLDERS TO
THE UNDERSIGNED.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DATALINK
SYSTEMS CORPORATION PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED
PRE-ADDRESSED ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO
VOTE IN PERSON IF YOU ATTEND THE MEETING.
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The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders and Proxy Statement.
Dated _____________, 1999.
_____________________________________
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Signature(s) of Shareholder(s)
Signature(s) should agree with the name(s) stenciled hereon. Executors,
administrators, trustees, guardians and attorneys should indicate when
signing. Attorneys should submit powers of attorney.
