UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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:
[X] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
ReDox Technology Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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>
REDOX TECHNOLOGY CORPORATION
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of ReDOX Technology Corporation:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of ReDOX
Technology Corporation (the "Company") will be held at the Best Western Lakeway
Inn, 714 Lakeway Drive, Bellingham, Washington, on Wednesday, January 31 2001 at
10:00 a.m. P.S.T., for the following purposes:
1. To approve an amendment to the Company's Certificate of
Incorporation increasing the authorized number of shares of Common
Stock of the Company; and
2. To approve an amendment to the Company's Certificate of
Incorporation to authorize a class of undesignated Preferred Stock;
and
3. To transact such other business as may properly come before the
meeting, although management was not aware on December 1, 2000 of any other
business to be considered.
Reference is made to the accompanying Proxy Statement for more complete
information concerning the foregoing matters. Only shareholders of record at the
close of business on December 6, 2000 are entitled to notice of and to vote at
the meeting or any adjournment thereof.
Shareholders are cordially invited to attend the meeting. Whether or
not you intend to be present, please read the enclosed Proxy Statement and then
mark, sign and date the enclosed form of Proxy and return it in the envelope
provided. It is important that your shares be represented at the meeting. Please
vote promptly.
By Order of the Board of Directors
Clifton D. Douglas, Secretary
December 1, 2000
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PROXY STATEMENT
This Proxy Statement is being furnished by the Management of ReDox
Technology Corporation, a Delaware Corporation ("Company"), 340 North Sam
Houston Parkway East, Suite 250, Houston, Texas 77060 in connection with the
solicitation by the Management of proxies in the accompanying form for use at a
Special Meeting of Best Western Lakeway Inn, 714 Lakeway Drive, Bellingham,
Washington on Wednesday, January 31,2001 at 10:00 a.m. P.S.T., and at any
adjournments thereof. As of the record date, there were 49,600,478 shares of
Common Stock issued and outstanding and 58,936 shares of Convertible Preferred
Stock.
Only shareholders of record at the close of business December 6, 2000
are entitled to notice of and to vote at the Special Meeting and at any and all
adjournments of the meeting. Each share of Common Stock entitles the holder to
one vote per share. Each share of Convertible Preferred Stock entitles the
holder to one vote per share, voting with the Common Stock as a single class.
The holders of a majority of the shares entitled to vote at the meeting must be
present in person or represented by proxy in order to constitute a quorum for
all matters to come before the meeting. The two matters to be submitted to the
shareholders require the affirmative vote of a majority of the votes cast at the
meeting. For purposes of determining the number of votes cast with respect to a
particular matter, only those cast "For" or "Against" are included. Abstentions
and broker non-votes are counted only for purposes of determining whether a
quorum is present at the meeting.
The accompanying proxy is solicited by the Management of the Company.
The initial solicitation will be by mail. Arrangements will be made with banks,
brokerage firms and others to forward proxy materials to beneficial owners of
the Company's Common Stock. Certain officers, executives and regular employees
of the Company (without additional compensation) may solicit proxies by
telephone, telegraph, mail or personal interviews. The Company has also retained
the firm of Reagan & Associates to aid in the solicitation of brokers, banks,
institutional and other shareholders for a fee of approximately $5,000, plus
reasonable out-of-pocket expenses. The total cost of such solicitation will be
borne by the Company and will include reimbursement to banks, brokerage firms
and others for their expenses in forwarding solicitation materials regarding the
meeting to stockholders.
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Proxies will be voted in accordance with the instructions contained
therein. If instructions are not given, proxies will be voted in favor of both
proposals to amend the Certificate of Incorporation and in the discretion of the
proxy holders on any other matter that may properly come before the meeting.
Any stockholder giving a proxy has the right to revoke such proxy at
any time prior to its exercise, by executing a later dated Proxy, by voting by
ballot at the meeting, or by giving written notice to the Secretary of the
Company. On the accompanying Proxy, a shareholder may substitute the name of
another person in place of those persons presently named as proxies. In order to
vote, however, a substitute must present adequate identification to the
Secretary before the voting occurs.
This Proxy Statement and form of Proxy are first being sent to
shareholders on approximately December 11, 2000. Amendment #2 to Form 10-K for
the fiscal year ended December 31, 1999 is being mailed with this Proxy
Statement. Such Form 10-K is not to be deemed a part of the proxy soliciting
material.
Shareholder proposals for the 2001 Annual Meeting, which is scheduled
for May 14, 2001, must be received no later than January 15, 2001 to be
considered for inclusion in the Company's 2001 proxy materials. All shareholder
proposals should be submitted to the Secretary of the Company.
PURPOSE OF SPECIAL MEETING
In June 1994 the Company solicited general proxies for use for the
period to June 1, 1995. The then President of the Company, the consultant whom
he relied upon, and the Company's majority shareholder, Mr. Szymanski, were not
aware that the Company's status under the Securities Exchange Act of 1934
required the use of a Proxy Statement prepared in accordance with the SEC proxy
rules and reviewed by the SEC staff. Rather, they conducted the proxy
solicitation without the use of a Proxy Statement and no review of the process
was obtained from the SEC staff. The Company used the proxies to amend the
Certificate of Incorporation to increase the authorized capital stock, including
the addition of undesignated Preferred Stock. The Company's current management
has been advised by legal counsel that it cannot rely upon the vote taken in
1995 using the proxies obtained without compliance with the SEC's proxy rules.
At this point the Company needs the authorization of additional capital stock,
and to avoid any legal complications is holding this Special Meeting for which
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proxies are being solicited in accordance with the SEC proxy rules. The purpose
of this meeting is to present to the shareholders two related proposals:
1. A proposal to amend the Certificate of Incorporation to
increase the authorized number of shares of Common Stock from
50,000,000 to 100,000,000; and
2. A proposal to amend the Certificate of Incorporation to add an
authorized class of undesignated Preferred Stock, consisting of 10,000,000
shares.
Both of these proposals are discussed below.
At present, the Company has issued and outstanding 58,936 shares of Convertible
Preferred Stock. In 1996 the Company's Board of Directors designated a series of
"Convertible Preferred Stock". The designation of the Convertible Preferred
Stock series gave it the following rights, privileges and preferences under
Delaware law:
1. The total number of shares designated as the series was
10,000,000 shares, having a par value of $ .001 per share.
2. The shares were given a liquidation preference of $1.00 per share,
and if the total assets were insufficient to permit that payment then the
available assets were to be distributed pro-rata to the then holders of the
series.
3. The shares of the series were given voting rights, of one vote per
share, and the series is voted with the Common Stock as a single class.
4. No fixed dividend, or dividend rate was designated; dividends are as
declared by the Board of Directors from time to time, and the entitlement to
dividends was subordinated to payment of corporate debt.
5. Each share of Convertible Preferred Stock converts into five (5)
shares of the Company's Common Stock, with the conversion privilege subject to
anti-dilution protections.
6. The Company has the right to redeem the shares of Convertible
Preferred Stock at any time upon thirty (30) days notice, at a redemption price
of $1.00 per share.
Mr. Szymanski, in consideration of his cumulative capital contributions to the
Company, was issued 6,000,000 shares of the newly-designated Convertible
Preferred Stock. Subsequently, Mr. Szymanski transferred these shares to the
Richard Alan Szymanski Trust #1. In turn, over the years the Trust has
subsequently sold 1,000,000 of such shares in private transactions to a limited
number of Mr. Szymanski's friends and associates, Holders of 941,064 of the
shares have since converted the shares to Common Stock. When the question of the
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validity of the Convertible Preferred Stock was raised, Mr. Szymanski returned
the 5,000,000 shares held by the Trust and received a Promissory Note for his
cumulative advances to June 30, 2000. The 58,936 shares which remain issued and
outstanding are the unconverted balance of the 1,000,000 shares sold by the
Trust.
VOTING SECURITIES
Voting Rights
On December 6, 2000 (the Record Date) the Company had outstanding two classes of
voting securities outstanding, namely 49,600,478 shares of Common Stock, $.00005
par value, whose holders are entitled to one vote for each share registered in
their name at the close of business on the Record Date, and 58,936 shares of
Convertible Preferred Stock, $.001 par value, whose holders are entitled to 1
vote for each share registered in their name at the close of business on the
Record Date. Pursuant to the designation of the series of Preferred Stock, it
votes with the Common Stock as a single class. The quorum necessary to conduct
business at the Special Meeting consists of a majority of the outstanding shares
of Common Stock and Convertible Preferred Stock, taken as a single class. The
two matters being submitted to the shareholders and covered by this Proxy
Statement require the affirmative vote of a majority of the votes cast at the
meeting. For purposes or determining the number of votes cast with respect to a
particular matter, only those cast "For" or "Against" are included. Abstentions
and broker non-votes are counted only for purposes of determining whether a
quorum is present at the meeting.
Because the legal status of the Preferred Stock is uncertain, the
holders of the Preferred Stock have waived the right to vote their shares on
either of the two items being presented at this Special Meeting. Their shares
will be counted to determine whether a quorum is present; however, the shares
will not be voted on either item.
Principal Stockholders
The following table indicates the number of shares of Common Stock
owned beneficially as of December 6, 2000 (the Record Date) by (i) each person
known to the Company to own more than 5% of the Company's outstanding Common
Stock and (ii) each Officer and Director of the Company, and (3) all officers
and Directors of the Company as a group:
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Name and Address of Number of Percent
Beneficial Owner Shares As of 12/01/00 /1/
---------------- ------ -------------------
Richard Alan Szymanski 15,144,900/2/ 30.53%
Trust #1
15 White Oak Manor
Conroe, Texas 77304
Clifton D. Douglas 500,000 1.01%
14674 F. Perthshire
Houston, Texas 77079
James R. Schuler -0- -0-
1141 Harbor Bay Parkway
Alameda, CA 94502
All officers and
directors as a group/3/ 15,644,900 31.54%
----------------------
/1/ Based on 49,600,478 shares of Common Stock issued and outstanding as of
12/01/00.
/2/ These shares were placed in a trust, The Richard Alan Szymanski Trust #1,
for the benefit of Patricia Szymanski, Wendy Szymanski, Jonathan Szymanski
and Holly Szymanski.
/3/ None of the shares of Convertible Preferred Stock are owned by any officer
or director or by any person owning 5% of the Company's outstanding Common
Stock.
Committees
At present, the Company does not have separate nominating, audit or
compensation committees. Such matters are handled by the Board of Directors as a
whole.
Attendance and Compensation
During 1999, all of the current members of the Board of Directors were
on the Board, and all directors attended a minimum of 85% of the meetings.
None of the current Directors receive compensation for their service as
Directors.
MANAGEMENT
Present Officers and Directors of the Company
As of December 1, 2000, the following are the Officers and Directors of
the Company, together with brief resumes for each:
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Name Age Position
---- --- --------
Richard Szymanski 58 President/Director
Clifton D. Douglas 71 Secretary/Treasurer/Director
James R. Schuler 60 Director
The members of the Board of Directors of the company are elected by the
shareholders at each annual meeting for a one year term. Officers are elected by
the Directors at each annual meeting for a one year term, or until otherwise
replaced by the Board of Directors.
Richard A. Szymanski is President, Chairman of the Board of Directors and CEO of
our Company, serving in these capacities since our incorporation in April 1993.
Mr. Szymanski is involved in research, development and improvement of high
density power batteries. Mr Szymanski previously served as Vice President and
Technical Director of World Book Encyclopedia Science Service for several years
where he maintained a staff of professional science writers and photographers
for the purpose of writing and illustrating major scientific events, including:
exclusive coverage of the seven original astronauts, organizing all photo
coverage including space launchers at Cape Kennedy, and the initial heart
transplants performed in Houston, Texas.
Clifton D. Douglas has served as Secretary/Treasurer and Director since July
1996, overseeing and managing all of the accounting and financial affairs of the
Company. From 1990 though 1995, Mr. Douglas was Vice President of Tiger Oil and
Gas, Inc., Latin America Trading Company and Petrorental Internacionales, S.A.,
where he was responsible for operations in Mexico and Latin America. Previously,
Mr. Douglas was a financial consultant in the areas of oil, gas and real estate
construction.
In 1953, Mr. Douglas received a Bachelor of Science in Accounting from Arizona
State University.
James R. Schuler has served as a Director of our Company since August 4, 1998.
Presently, Mr. Schuler is the President and CEO of Trans United Partners, Inc.
of Pacifica, California, having been with that company since 1998. Also since
1998 through the present, Mr. Schuler is CEO to S-Cube Investments, LLC, where
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he has been forming a technology cooperative among new technology companies.
Previously, Mr. Schuler co-founded a research and development company in 1994
called Add-Vision, Inc., which produced a new illumination technology made up of
a revolutionary thin, flat, programmable display product with multiple uses
(called Intelligent Illumination). He remained with Add-Vision until 1998. Prior
to that, Mr. Shuler served as President and CEO to a transportation relocation
company called Relocation Controls Corporation, and to a petroleum refining
administrative company which he founded called Transatlantic Petroleum.
Mr. Schuler received a Bachelor of Science Degree in Finance and Business
Administration from the University of North Carolina.
Executive Compensation of Present Officers
For the years 1997, 1998 and 1999 and for the year 2000 to date, the
Company has not compensated any of its executive employees, including
particularly its President and Chief Executive Officer, Richard Szymanski,
Employment Agreements
At present, the Company has no employment agreements with either of its
two employees.
ITEM I
PROPOSED AMENDMENT TO ARTICLE FOURTH
OF THE CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED COMMON STOCK
The Board of Directors has proposed the adoption of an amendment of the
FOURTH Article of the Certificate of Incorporation. If adopted the amendment
would change the capital structure by increasing the authorized number of shares
of Common Stock from 50,000,000 shares having a par value of $.00005 per share
to 100,000,000 shares, having a par value of $.00005 per share. This amendment
will not affect the preferences, limitations and relative rights in respect of
the currently authorized shares of Common Stock.
The Board of Directors recommends a vote FOR the adoption of the
following amendment to the Certificate of Incorporation:
RESOLVED, that Article FOURTH of the Company's Certificate of
Incorporation be, and hereby is amended to read as follows:
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FOURTH. The aggregate number of shares which the
corporation shall have authority to issue is One
Hundred Million (100,000,000) shares of Common Stock,
having a par value of $.00005 per share
The terms of the 100,000,000 Common Shares of the corporation shall be
as follows:
(1) Dividends. Whenever cash dividends upon the Preferred Shares of all
series thereof at the time outstanding, to the extent of the preference to which
such shares are entitled, shall have been paid in full for all past dividend
periods, or declared and set apart for payment, such dividends, payable in cash,
stock, or otherwise, as may be determined by the Board of Directors, may be
declared by the Board of Directors and paid from time to time to the holders of
the Common Shares out of the remaining net profits or surplus of the
corporation.
(2) Liquidation. In the event of any liquidation, dissolution, or
winding up of the affairs of the corporation, whether voluntary or involuntary,
all assets and funds of the corporation remaining after the payment to the
holders of the Preferred Shares of all series thereof of the full amounts to
which they shall be entitled as hereinafter provided, shall be divided and
distributed among the holders of the Common Shares according to their respective
shares.
(3) Voting rights. Each holder of a Common Share shall have one vote in
respect of each share of such stock held by him. There shall not be cumulative
voting.
MANAGEMENT'S DISCUSSION OF PROPOSED AMENDMENT
The Board of Directors believes that the proposed increase is in the
best interests of the Company and its shareholders. In 1995, the Company, which
was then being advised by a non-attorney consultant, solicited proxies for a
Stockholders' Meeting to amend the Certificate of Incorporation substantially as
now proposed. That proxy solicitation was conducted without the use of a Proxy
Statement filed with the Securities and Exchange Commission pursuant to its
Proxy Rules under which stockholders would have received a definitive Proxy
Statement detailing the proposed amendment. A majority of the then stockholders
provided proxies which were voted to amend the Certificate of Incorporation so
as (a) to increase the authorized number of shares of Common Stock from
50,000,000 to 100,000,000 and
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(b) to authorize the issuance of 10,000,000 shares of undesignated Preferred
Stock. The Company has recently retained corporate and securities counsel who
have questioned the validity of the vote based upon the use of those proxies in
the absence of the SEC filing. Assuming that the validity of the prior amendment
and authorization is in question, this poses two problems to the Company:
1. In 1996, Mr. Szymanski was issued shares of Convertible Preferred Stock in
recognition of the advances which he had made to the Company and in anticipation
of his continued financial support of the Company. To date, substantially all of
the financial support which the Company has received has been from Mr.
Szymanski; as of June 30, 2000 his advances total $1,080,712 and the Company is
dependent upon his continuing that support for the foreseeable future until
equity financing can be obtained on terms acceptable to the Company. When the
validity of the issuance of the Convertible Preferred Stock was questioned, the
transaction was reversed, Mr. Szymanski turned in his 5,000,000 shares of
Convertible Preferred Stock and was issued a Promissory Note in the amount of
his advances.
The Promissory Note, dated August 14, 2000, is in the principal sum of
$1,008,712, representing his prior advances, without interest. There is no
interest on this sum, if the note is paid on or before December 31, 2000. If the
note is not paid by that date, then simple interest at the rate of ten percent
(10%) per annum will be retroactively applied for the period from August 14,
2000 to December 31, 2000. Then, the combined total of principal and interest
shall bear interest at the rate of eighteen percent (18%) per annum until paid.
The Company does not have the funds to repay the Promissory Note. The
Board of Directors has met with Mr. Szymanski with respect to this indebtedness
and has approved an agreement to issue 11,937,311 shares of Common Stock to him
in conversion of that indebtedness. The number of shares is based upon the
calculation of his advances to the date of the 1996 transaction, ($379,379)
divided by $.045 representing the fair market value of restricted shares of the
Company's Common Stock at that time and his further advances to June 30, 2000
($701,733) divided by $.20 representing the fair market value of restricted
shares of the Company's Common Stock at that time. On the dates that the
determinations of the fair market values were made, the market prices of the
Company's Common Stock was as follows:
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<TABLE>
<CAPTION>
Bid Ask Price
Date High Low Close High Low Close High Low Close
----- --- ------ ---- --- ------ ---- --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
July 1996 .17 .22 .21 .23 .21 .20 .23 .16 .20
June 30, 2000 .4375 .5 .5 .51 .5 .5 .51 .4375 .5
</TABLE>
The Company does not have sufficient remaining authorized but unissued
Common Stock to issue the shares to Mr. Szymanski in payment of the note. Unless
additional shares are authorized, the only alternative would be a reverse stock
split, which Management does not wish to do.
2. At this point, the Company has issued and outstanding 49,600,478 shares of
its Common Stock which utilizes almost all of the legally authorized 50,000,000
shares. The 58,936 issued and outstanding shares of Preferred Stock each convert
to five shares of Common Stock; if all the shares were converted it would
substantially deplete the remaining balance. The Company is currently seeking to
raise equity financing to support its next stage of product development and
manufacturing; without the proper authorization of the additional shares of
Common Stock this cannot be done except by a reverse stock split, which
Management does not wish to do. In order to have sufficient shares of new Common
Stock to raise the equity financing, Management recommends a vote FOR the
amendment. In addition, shares of Convertible Preferred Stock were issued by the
Board of Directors in 1996 in reliance upon the presumed validity of the
authorizing amendment to the Certificate of Incorporation. The authorization of
the additional Common Stock will provide the necessary shares for such Preferred
Stock to be converted Common Stock according to its terms.
Except as set forth below, there are no plans, agreements, commitments
or understandings for the issuance of the newly authorized shares at the present
time, other than:
(a) to permit conversion of the issued and outstanding
Convertible Preferred Stock; and
(b) to issue 11,937,311 shares of Common Stock to Richard Szymanski in
consideration of the $1,080,712 which he has advanced to the corporation, as a
conversion of the Company's indebtedness to him; and
(c) possible issuance for general corporate purposes, including future
equity financings, acquisitions, stock dividends and stock splits. Unless
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required by law, no further stockholder approval would be sought for the
issuance of such shares. Current holders of the Company's Common Stock do not
have preemptive rights to subscribe for additional shares that may be issued by
the Company.
The Company does not have any type of anti-takeover program in effect
and the amendment is not being proposed as any type of anti-takeover defense nor
is it part of any anti-takeover program. Shareholders should note that the Board
of Directors is authorized to issue the additional shares of Common Stock
without further approval of the shareholders and without notice to them.
Furthermore, the availability of authorized but unissued shares of Common Stock,
and the ability of the Board of Directors to issue such shares without approval
of the shareholders, could impede or deter an unsolicited tender offer or
takeover proposal regarding us and the issuance of additional shares could make
an attempted acquisition of a controlling interest, by an unwanted suitor, more
difficult, time- consuming or costly, thereby having the effect of discouraging
such an attempt.
Adoption of the amendment requires the affirmative vote of the holders
of a majority of the votes cast at the meeting, with the Common Stock and the
Convertible Preferred Stock, voting as a single class.
ITEM II
PROPOSED AMENDMENT TO ARTICLE FOURTH
OF THE CERTIFICATE OF INCORPORATION
TO ADD AN AUTHORIZED CLASS OF PREFERRED STOCK
The Board of Directors has proposed the adoption of a second amendment
of the FOURTH Article of the Certificate of Incorporation. If adopted the
amendment would change the capital structure by authorizing the issuance of
10,000,000 shares of undesignated Preferred Stock, with the rights, limitations
and privileges of such Preferred Stock to be designated by the Board of
Directors from time to time as series of such Preferred Stock are actually
issued. This amendment will not affect the preferences, limitations and relative
rights in respect of the shares of each class, common stock and preferred stock,
nor will it affect the 58,936 shares of the outstanding series of Convertible
Preferred Stock.
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The Board of Directors recommends a vote FOR the adoption of the
following amendment to the Certificate of Incorporation:
RESOLVED, that Article FOURTH of the Company's Certificate of
Incorporation be, and hereby is amended to read as follows:
FOURTH. The aggregate number of shares which the
corporation shall have authority to issue is (either
One Hundred Ten Million (110,000,000) shares, divided
into:
or
Sixty Million (60,000) shares, divided into: )**
10,000,000 Preferred Shares, having a par value of one
tenth of a cent ($.001) per share
and
(either 100,000,000 Common Shares, having a par value of $.00005 per
share or Fifty Million Common Shares, having a par value of $.00005 per
share)**
**Note: The number of shares of Common Stock to be contained in the amendment
will depend upon whether or not Item I is approved and the number of authorized
shares of Common Stock is increased.
A statement of the preferences, privileges, and restrictions granted to or
imposed upon the respective classes of shares or the holders thereof is as
follows:
A. Common Shares. The terms of the (either 100,000,000 or
50,000) Common Shares of the corporation shall be as
follows:
(1) Dividends. Whenever cash dividends upon the Preferred Shares of all
series thereof at the time outstanding, to the extent of the preference to which
such shares are entitled, shall have been paid in full for all past dividend
periods, or declared and set apart for payment, such dividends, payable in cash,
stock, or otherwise, as may be determined by the Board of Directors, may be
declared by the Board of Directors and paid from time to time to the holders of
the Common Shares out of the remaining net profits or surplus of the
corporation.
(2) Liquidation. In the event of any liquidation, dissolution, or
winding up of the affairs of the corporation, whether voluntary or involuntary,
all assets and funds of the corporation remaining after the payment to the
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holders of the Preferred Shares of all series thereof of the full amounts to
which they shall be entitled as hereinafter provided, shall be divided and
distributed among the holders of the Common Shares according to their respective
shares.
(3) Voting rights. Each holder of a Common Share shall have one vote in
respect of each share of such stock held by him. There shall not be cumulative
voting.
B. Preferred Shares. Prior to the issuance of any of the Preferred
Shares, the Board of Directors shall determine the number of Preferred Shares to
then be issued from the Ten Million (10,000,000) shares authorized, and such
shares shall constitute a series of the Preferred Shares. Such series shall have
such preferences, limitations, and relative rights as the Board of Directors
shall determine and such series shall be given a distinguishing designation.
Each share of a series shall have preferences, limitations, and relative rights
identical with those of all other shares of the same series. Except to the
extent otherwise provided in the Board of Directors' determination of a series,
the shares of such series shall have preferences, limitations, and relative
rights identical with all other series of the Preferred Shares. Preferred Shares
may have dividend or liquidation rights which are prior (superior or senior) to
the dividend and liquidation rights and preferences of the Common Shares and any
other series of the Preferred Shares. Also, any series of the Preferred Shares
may have voting rights.
MANAGEMENT'S DISCUSSION OF PROPOSED AMENDMENT
The Board of Directors believes that the proposed authorization of a
class of undesignated Preferred Stock is in the best interests of the Company
and its shareholders. As noted in the discussion to Item I, the Company used the
proxies to amend the Certificate of Incorporation. A part of that amendment was
the authorization of a class of Preferred Stock. Although Mr. Szymanski returned
the 5,000,000 shares which he was still holding, 58,936 shares remain issued and
outstanding; there are no outstanding commitments for the issuance of any other
preferred stock.. Since the validity of the prior amendment and authorization is
in question, the authorization of the class will obviate the problem. If the
amendment is not approved, and if the prior authorization was not valid, then
the holders of the outstanding shares could have a cause of action against the
Company.
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Other than to issue 58,936 shares to correct the over- issuance
discussed, there are no plans, agreements, commitments or understandings for the
issuance of the newly authorized shares at the present time. The Company does
not have any type of anti-takeover program in effect and the amendment is not
being proposed as any type of anti-takeover defense nor is it part of any
anti-takeover program. Shareholders should note that the Board of Directors is
authorized to designate series of the Preferred Stock and to issue shares of
such stock without further approval of the shareholders and without notice to
them. Furthermore, the availability of authorized but unissued shares of
Preferred Stock, and the ability of the Board of Directors to designate and
issue such undesignated shares, could impede or deter an unsolicited tender
offer or takeover proposal regarding us and the issuance of additional shares
having preferential rights could adversely affect the voting power and other
rights of holders of Common Stock. The rights of holders of shares of Preferred
Stock that may be issued may be superior to the rights granted to the holders of
the existing shares of Common Stock.
Adoption of the amendment requires the affirmative vote of the holders
of a majority of the votes cast at the meeting, with the Common Stock and the
Convertible Preferred Stock, voting as a single class.
ADDITIONAL INFORMATION
Other Matters The Board of Directors does not intend to present to the
meeting any matters not referred to in the form of Proxy. No stockholder
proposals were submitted for inclusion in this Proxy Statement. If any proposal
not set forth in the Proxy Statement is properly presented for action at the
meeting, it is intended that the shares represented by proxies will vote with
respect to such matters in accordance with the judgment of the persons voting
them.
By Order of the Board of Directors,
-----------------------------------
President
Dated: December 1, 2000
Houston, Texas
15
<PAGE>
REDOX TECHNOLOGY CORPORATION
This Proxy is solicited on Behalf of the Management
The undersigned hereby appoints Richard Szymanski, Clifton D. Douglas
and James R. Schuler, and each of them, jointly and severally, as Proxies, each
with power to appoint his substitute, and hereby authorizes them to represent
and vote, as designated below, all the shares of Common Stock of ReDox
Technology Corporation held of record by the undersigned on December 6, 2000, at
the Special Meeting of Stockholders to be held on January 31, 2001, or any
adjournment thereof. Please indicate your vote on the following proposals:
1. Proposal to amend Article FOURTH of the Certificate of Incorporation of the
Company to increase the authorized number of shares of Common Stock to be
issued.
FOR AGAINST ABSTAIN
----- ----- -----
2. Proposal to amend Article FOURTH of the Certificate of Incorporation of the
Company to authorize a class of undesignated Preferred Stock
FOR AGAINST ABSTAIN
----- ----- -----
This proxy, when properly dated and signed will be voted in the manner directed.
If no direction is made, this proxy will be voted FOR the Proposal and in the
discretion of the proxies with respect to any other matters properly presented
to the meeting.
Dated: ,2000
-----------------------------------
Name (Please Print):
----------------------------------------------------------
Signature of Owner:
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Signature of Co-Owner, if any:
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Please sign exactly as name appears on stock certificate. Where shares
are held as joint tenants, both should sign. When signing as attorney,
as executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
