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:
[ X ] Preliminary proxy statement [ ] Confidential, for use of the
[ ] Definitive proxy statement Commission only (as permitted
[ ] Definitive additional materials by Rule 14a-6(e)(2))
[ ] Soliciting material pursuant to
Sec. 240.14a-11(c) or Sec. 240.14a-12
DIMENSIONAL VISIONS GROUP, LTD.
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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):
[ ] 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 transactions 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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(5) 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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DIMENSIONAL VISIONS GROUP, LTD.
8855 North Black Canyon Highway, Suite 2000 2301 West Dunlap Avenue
Phoenix, Arizona 85021 Phoenix, Arizona 85021
Until approximately December 15, 1997 After approximately December 15, 1997
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 8, 1998
NOTICE IS HEREBY GIVEN that a Special Meeting of the Stockholders of
Dimensional Visions Group, Ltd., a Delaware corporation (the "Company"), will be
held on January 8, 1998 at 10:00 a.m. at the offices of Gammage & Burnham
P.L.C., Two North Central Avenue, Suite 1800, Phoenix, Arizona 85004, (the
"Meeting") for the purpose of considering and voting upon the following matters:
1. To approve an amendment to the Company's Certificate of
Incorporation to effect a reverse split of the Company's Common Stock,
$.001 par value per share (collectively, the "Common Stock") pursuant
to which each twenty-five shares of Common Stock then outstanding will
be converted into one share of Common Stock.
2. To authorize the change of the name of the Company from
Dimensional Visions Group, Ltd. to Dimensional Visions Incorporated.
3. To transact such other business, if any, as may properly
come before the Meeting or any adjournment thereof.
The Board of Directors has no knowledge of any other business to be
transacted at the Meeting.
The Board of Directors has fixed the close of business on December 4,
1997 as the record date for the determination of stockholders entitled to notice
of and to vote at the Meeting and at any adjournments thereof. A list of the
Company's stockholders is open for examination to any stockholder at the
principal executive offices of the Company, 8855 North Black Canyon Highway,
Suite 2000, Phoenix, Arizona 85021 (until approximately December 15, 1997 and,
thereafter, at 2301 West Dunlap Avenue, Phoenix, Arizona 85021), and will be
available at the Meeting at the offices of Gammage & Burnham P.L.C.
By Order of the Board of Directors,
GEORGE S. SMITH,
Chairman of the Board
Phoenix, Arizona
December 1, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE PROMPTLY
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING
ENVELOPE. NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED
STATES.
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DIMENSIONAL VISIONS GROUP, LTD.
8855 North Black Canyon Highway, Suite 2000 2301 West Dunlap Avenue
Phoenix, Arizona 85021 Phoenix, Arizona 85021
Until approximately December 15, 1997 After approximately December 15, 1997
PROXY STATEMENT
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 8, 1998
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Dimensional Visions Group, Ltd., a Delaware
corporation (the "Company"), of proxies for use at the Special Meeting of
Stockholders to be held on January 8, 1998 at 10:00 a.m. at the offices of
Gammage & Burnham P.L.C., Two North Central Avenue, Suite 1800, Phoenix, Arizona
85004, and at any adjournments thereof (the "Meeting").
All proxies will be voted in accordance with the instructions of the
stockholder. If no choice is specified, the proxies will be voted in favor of
the matters set forth in the accompanying Notice of Meeting. Any proxy may be
revoked by a stockholder at any time before its exercise by delivery of a
written revocation or a subsequently dated proxy to the Secretary of the Company
or by voting in person at the Meeting. Attendance at the Meeting will not itself
be deemed to revoke a proxy unless the stockholder gives affirmative notice at
the Meeting that the stockholder intends to revoke the proxy and vote in person.
THE NOTICE OF MEETING, THIS PROXY STATEMENT AND THE ENCLOSED PROXY CARD
ARE BEING MAILED TO STOCKHOLDERS ON OR ABOUT DECEMBER 1, 1997.
Voting Securities and Votes Required
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The holders of record of the Company's shares of stock at the close
business on December 4, 1997, as listed below, are entitled to receive notice
of, and to vote at, the Meeting and any adjournment thereof:
1. There were 73,257,720 shares of Common Stock, $.001 par
value ("Common Stock"), issued and outstanding. Each share of Common
Stock is entitled to one (1) vote for each matter considered;
2. There were 25,500 shares of First Series A Convertible 5%
Preferred Stock ("Series A") issued and outstanding. Each share of
Series A is entitled to forty (40) votes for each matter considered;
3. There were 5,000 shares of Second Series B Convertible 8%
Preferred Stock ("Series B") issued and outstanding. Each share of
Series B is entitled to one hundred (100) votes for each matter
considered;
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4. There were 18,681 shares of Series C Convertible Preferred
Stock ("Series C") issued or to be issued and outstanding. Each share
of Series C Stock is entitled to ten (10) votes for each matter
considered;
5. There were 2,150 shares of Third Series S Convertible
Participating Preferred Stock ("Series S") issued and outstanding. Each
share of Series S is entitled to one hundred (100) votes for each
matter considered; and
6. There were 167,547 shares of Fourth Series P Convertible
Participating Preferred Stock ("Series P") issued and outstanding. Each
share of Series P is entitled to ten (10) votes for each matter
considered.
Series A, Series B, Series C, Series P and Series S may be collectively
referred to as "Preferred Stock." Preferred Stock and Common Stock may be
collectively referred to as "Stock." Pursuant to the terms of the Series A, a
five percent (5%) annual dividend is due and owing to Series A holders. Pursuant
to the terms of the Series B, an eight percent (8%) annual dividend is due and
owing to Series B holders. As of June 30, 1997, the Company has not declared
dividends on Series A or Series B. The unpaid cumulative dividends totaled
approximately $68,000.
The total number of shares of the Company's securities entitled to vote
at the Meeting is 73,476,598, and the total number of votes entitled to be cast
at the Meeting is 76,995,000 (the "Total Votes").
A majority of the Total Votes entitled to vote at the Meeting shall
constitute a quorum for the transaction of business at the Meeting. Shares of
Stock present in person or represented by proxy (including shares which abstain
or do not vote with respect to one or more of the matters presented for
stockholder approval) will be counted for purposes of determining whether a
quorum exists at the Meeting.
The affirmative vote of a majority of the Total Votes and the
affirmative vote of a majority of the shares of Common Stock is required to
approve the reverse split of the Common Stock. The affirmative vote of a
majority of the Total Votes is required to authorize the change of the name of
the Company. Shares which abstain from voting as to the amendments to the
Company's Certificate of Incorporation, and shares held in "street name" by
brokers or nominees who indicate on their proxies that they do not have
discretionary authority to vote such shares as to a such matter are nonetheless
considered outstanding shares and will have the same effect as a vote against
the amendments (causing the reverse split of the Common Stock and the name
change) to the Company's Certificate of Incorporation.
Security Ownership of Certain Beneficial Owners and Management
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The following table sets forth certain information, as of December 1,
1997, with respect to the beneficial ownership of shares of Stock by (i) each
person known to the Company to beneficially own more than 5% of any class of the
Company's securities, (ii) the directors of the Company, (iii) the Chief
Executive Officer of the Company and the four most highly compensated executive
officers (other than the Chief Executive Officer), and (iv) all current
directors and executive officers of the Company as a group.
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<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Ownership (1)
Title of Name and Address of Number of Percent of
Class Beneficial Owner (2) Shares Class (3)
----- ---------------- ------ -----
<S> <C> <C> <C>
Common George S. Smith (4) 6,478,550 8.1
Series C 3688 N. Littlerock Drive 544 2.9
Provo, UT 84604
Common H. Thomas Ferstl (5) 4,635,920 6.0
Series C 8761 State Street 3,592 19.2
Millington, MI 48746
Common John D. McPhilimy - 0 - - 0 -
Dimensional Visions Group, Ltd.
8855 N. Black Canyon Highway, Suite 2000
Phoenix, AZ 85021
Common Sean F. Lee (6) 1,854,850 2.5
Dimensional Visions Group, Ltd.
8855 N. Black Canyon Highway, Suite 2000
Phoenix, AZ 85021
Common Robert L. Morris, Jr. (7) 1,278,000 1.7
Series S 305 2nd Avenue, #318 1,500 69.8
New York, NY 10003
Common Steven L. Flint - 0 - - 0 -
946 N. Williams
Mesa, AZ 85203
Common Hans J. Kaemmlein (8) 2,031,120 2.7
80 Orville Drive
Bohemia, NY 11716
Common Lawrence G. Olson - 0 - - 0 -
214 W. Vista
Phoenix, AZ 85021
Series A Murray B. Dey 5,000 19.6
549 W. Crescent Drive
Palo Alto, CA 94301
Series A Andrew S. and Eva Kasten Grove Living Trust 2,500 9.8
dated 6/4/70
12762 La Cresta Drive
Los Altos Hills, CA 94022
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Series A Robert W. and Winnifred R. Johnston 2,500 9.8
9120 Los Lagos Circle S
Loomis, CA 95650
Series A Elliot B. Lefferts 3,000 11.8
Kenneth Leventhal & Co.
100 Spear Street, Suite 1200
San Francisco, CA 94105
Series A Lloyd K. and Harriet Lloyd Trust 2,500 9.8
dated 6/5/85
1200 California Street, 8C
San Francisco, CA 94109
Series A Richard A. Matza 2,500 9.8
1389 W. Main Street, Suite 123
Waterbury, CT 06708
Series A Richard B. Oliver Revocable Family Trust 2,500 9.8
dated 9/25/72
25466 Adobe Lane
Los Altos Hills, CA 94022
Series A The Robert C. and Jacqueline A. Stibor Family Trust 5,000 19.6
9016 Thurberry Lane
Las Vegas, NV 89134
Series B J. Patrick Carter 1,500 30.0
2621 S. Tewilleger Blvd.
Tulsa, OK 74114
Series B Dale McMackin 1,500 30.0
311 W. Edwardsville Road
Troy, IL 62294
Series B Barbara Stillman 2,000 40.0
6528 30th Avenue, NE
Seattle, WA 98115
Series C Paul R. Essi 1,171 6.3
2250 One Cleveland Center
Cleveland, OH 44114
Series C Marton and Kjellaug M. Klepp 1,825 9.8
12 Day Road
Armonk, NY 10504
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Series C Richard Peery Trust 2,068 11.1
UTA 7/20/77
2200 Cowper Street
Palo Alto, CA 94301
Series C Vadex-Panama, S.A. 1,097 5.9
Mr. Gustavo Nicolich
P.O. Box 60040
Palo Alto, CA 94306-0040
Series C Alejandro and Lida Zaffaroni 2,419 12.9
c/o G. Silveira
Technofyn
4005 Miranda Avenue, Suite 180
Palo Alto, CA 94304
Series P Robert Huskins 67,741 40.4
42 Shady Vista Road
Rolling Hills Estates, CA 90274
Series P John E. Matlock 77,407 46.2
19960 N. Denaro Drive
Glendale, AZ 85308
Series P Midland Trust Company, Ltd. 18,899 11.3
Roderick Thompson
B.A.S.E. 57
Rue Grimaldi, Monte Carlo
98000 Monaco
Series S Joann Furman 650 30.2
The North Pole Inn
Red Hill
Wateringbury
Maidstone, Kent
England ME 18 5BJ
Common All directors and executive officers as a group 8,231,340 11.2
Series C (10 persons) (9) 544 2.9
Series S 1,500 69.8
</TABLE>
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(1) The number of shares beneficially owned by each director and executive
officer is determined under rules promulgated by the Securities and
Exchange Commission (the "SEC"), and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which the individual has
sole or shared voting power or investment power and also any shares which
the individual has the right to acquire within 60 days after December 1,
1997 through the exercise of any stock option or other right. The inclusion
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herein of such shares, however, does not constitute an admission that the
named stockholder is a direct or indirect beneficial owner of such shares.
Unless otherwise indicated, each person or entity named in the table has
sole voting power and investment power (or shares such power with his or
her spouse) with respect to all shares of capital stock listed as
beneficially owned by such person or entity. The directors and executive
officers do not beneficially own any shares of Preferred Stock except as
set forth in the table.
(2) Except as otherwise indicated, all of the shares are owned beneficially and
of record. Beneficial ownership has been determined in accordance with Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended.
(3) Number of shares of Common Stock deemed outstanding includes 73,257,720
shares of Common Stock outstanding as of December 1, 1997, plus any shares
subject to options, warrants, convertible debentures or convertible
securities held by the person or entity in question that are currently
exercisable, exercisable, or convertible (including Preferred Stock) within
60 days following December 1, 1997.
(4) Mr. Smith owns 3,873,110 shares of Common Stock. Also included in the
amount are Common Stock purchase warrants to purchase 2,600,000 shares of
the Company's Common Stock, and 544 shares of Series C, convertible at 10
to 1 into Common Stock.
(5) Mr. Ferstl owns 3,600,000 shares of Common Stock. Also included in the
amount are Common Stock purchase warrants to purchase 1,000,000 shares of
Common Stock and 3,592 shares of Series C convertible at 10 to 1 into
Common Stock.
(6) Includes 1,528,410 shares of Common Stock which is owned by the Lee Family
Partnership of which Mr. Lee is the general partner. Also included in the
amount are 26,440 shares of Common Stock and Common Stock purchase warrants
to purchase 300,000 shares of Common Stock.
(7) Mr. Morris owns 28,000 shares of Common Stock. Also included in the amount
are Common Stock purchase warrants to purchase 1,100,000 shares of Common
Stock and 1,500 Series S which is convertible at 100 to 1 into Common
Stock.
(8) Mr. Kaemmlein owns 1,831,120 shares of Common Stock. Also included in the
amount are Common Stock purchase warrants to purchase 200,000 shares of
Common Stock.
(9) Includes Common Stock purchase warrants to purchase in the aggregate
4,000,000 shares of Common Stock, and 544 shares of Series C which would be
convertible into 5,440 shares of Common Stock and 1,500 shares of Series S
convertible into 150,000 shares of Common Stock and 3,500 Series P
convertible into 35,000 shares of Common Stock.
PROPOSAL 1.
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APPROVAL OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO EFFECT
ONE-FOR-TWENTY-FIVE REVERSE STOCK SPLIT
The Board of Directors has adopted a resolution declaring the
advisability of, and submitting to the stockholders for approval, a proposal to
amend the Company's Certificate of Incorporation (the "Proposed Amendment #1")
to effect a reverse split of the Company's Common Stock, pursuant to which each
twenty-five shares of Common Stock will be automatically converted into one
share of Common Stock without any action on the part of the stockholder (the
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"Reverse Split"). The text of the Proposed Amendment #1 is set forth in Exhibit
A to this Proxy Statement.
Consummation of the Reverse Split will not change the number of shares
of Common Stock authorized by the Company's Certificate of Incorporation, which
will remain at 100,000,000 shares, or the par value of the Common Stock per
share. The Reverse Split will become effective as of 5:00 p.m., Phoenix, Arizona
time (the "Effective Date"), on the date that the certificate of amendment to
the Company's Certificate of Incorporation is filed with the Secretary of State
of Delaware. If for any reason the Board of Directors deems it advisable,
Proposed Amendment #1 may be abandoned at any time before the Effective Date,
whether before or after the Meeting (even if such proposal has been approved by
the stockholders).
In lieu of issuing less than one whole share resulting from the Reverse
Split to holders of an odd number of shares, the Company will determine the fair
value of each outstanding share of Common Stock on the Effective Date (the
"Fractional Share Purchase Price"). The Company currently anticipates that the
Fractional Share Purchase Price will be based on the average daily closing bid
price per share of the Common Stock as reported by the primary trading market
for the Company's Common Stock, if any, for the ten (10) trading days
immediately preceding the Effective Date. In the event the Company determines
that unusual trading activity would cause such amount to be an inappropriate
measure of the fair value of the Common Stock, the Company may base the
Fractional Share Purchase Price on the fair market value of the Common Stock as
reasonably determined in good faith by the Board of Directors of the Company.
Stockholders who hold an odd number of shares of Common Stock on the Effective
Date will be entitled to receive, in lieu of the less than one whole share
arising as a result of the Reverse Split, cash in the amount of the relevant
portion of the Fractional Share Purchase Price.
As soon as practical after the Effective Date, the Company will mail a
letter of transmittal to each holder of record of a stock certificate or
certificates which represent issued Stock outstanding on the Effective Date. The
letter of transmittal will contain instructions for the surrender of such
certificate or certificates to the Company's designated exchange agent in
exchange for certificates representing the number of whole shares of Common
Stock (plus the relevant portion of the Fractional Share Purchase Price, if any)
into which the shares of Stock have been converted as a result of the Reverse
Split. No cash payment will be made or new certificate issued to a stockholder
until the stockholder has surrendered outstanding certificates together with the
letter of transmittal to the Company's exchange agent. See, "- Exchange of Stock
Certificates."
Purpose of the Reverse Split
- ----------------------------
On October 10, 1997, the Company entered into an agreement with Capital
West Investment Group, Inc. ("CWIG") to raise $1 million by sale of up to 42.5%
of the Company's Common Stock or other acceptable securities (the "Private
Placement") on a "best efforts" basis. The Company's Board of Directors entered
into a covenant with CWIG to approve and recommend the Reverse Split of the
Common Stock to the Company's stockholders. The Company and CWIG believe that
the relatively low current market price per share of the Common Stock may impair
the acceptability of the Common Stock to certain investors who may be interested
in participating in the Private Placement, institutional investors and other
members of the investing public. Theoretically, the number of shares outstanding
should not, by itself, affect the marketability of the Common Stock, the type of
investor who acquires it, or the Company's reputation in the financial
community. In practice, this is not necessarily the case, as certain investors
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view low-priced stock as unattractive, although certain other investors may be
attracted to low-priced stock because of the greater trading volatility
sometimes associated with such securities. Many brokerage houses are reluctant
to recommend lower-priced stock to their clients or to hold it in their own
portfolios. Further, a variety of brokerage house policies and practices
discourage individual brokers within those firms from dealing in low-priced
stock because of the time-consuming procedures that make the handling of
low-priced stock unattractive to brokerage houses from an economic standpoint.
In addition, since the broker's commissions on low-priced stock generally
represent a higher percentage of the stock price than commissions on higher
priced stock, the current share price of the Common Stock can result in
individual stockholders paying transaction costs (commission, markups or
markdowns) which are a higher percentage of their total share value than would
be the case if the share price were substantially higher. This factor also may
limit the willingness of institutions to purchase the Common Stock at its
current relatively low per share market price.
If adopted, the Reverse Split may result in some stockholders owning
"odd lots" of less than 100 shares of the Common Stock received as a result of
the Reverse Split. Brokerage commissions and other costs of transactions in
odd-lots may be higher, particularly on a per-share basis, than the cost of
transactions in even multiples of 100 shares.
The Reverse Split would indirectly result in the authorization of a
significant number of additional shares of Common Stock since the outstanding
shares of Common Stock would be decreased to 2,930,309 shares but the authorized
would remain at 100,000,000.
Authorization of the Reverse Split of the Common Stock is required to
comply with the covenants the Company has entered into with CWIG related to the
Private Placement. FAILURE TO APPROVE THE REVERSE SPLIT OF THE COMMON STOCK WILL
RESULT IN THE CANCELLATION OF CWIG'S AGREEMENT TO COMPLETE ON A "BEST EFFORTS"
BASIS THE PRIVATE PLACEMENT OF $1 MILLION. The Company believes that the
authorization of additional shares of Common Stock will also enhance the
Company's flexibility for purposes of its future financing needs. The Company
believes that having such additional shares available for issuance will enable
the Company to take prompt action on such corporate opportunities as may
materialize in the future, if the Board of Directors of the Company deems such
issuance to be in the best interest of the Company, as well as provide continued
incentives to employees through the issuance of stock options. The Board of
Directors believes an increase in the authorized shares of Common Stock is
essential to meet the immediate financial obligations of the Company and for
the future well being of the Company. However, the disadvantage of such
increase is that any additional issuances of Common Stock will dilute the
percentage of the Company owned by existing stockholders.
Effect of the Reverse Split on Common Stock and Preferred Stock
- ---------------------------------------------------------------
As a result of the Reverse Split, the number of whole shares of Common
Stock held by stockholders of record as of the close of business on the
Effective Date will automatically, without any action required by the
stockholders, be equal to the number of shares of Common Stock held immediately
prior to the close of business on the Effective Date divided by twenty-five,
plus cash in lieu of any fractional share. The Reverse Split will not affect a
stockholder's percentage ownership interest in the Company or proportional
voting power, except for minor differences resulting from the payment of cash in
lieu of fractional shares. The rights and privileges of the holders of shares of
Common Stock will be unaffected by the Reverse Split. The par value of the
Common Stock will remain at $.001 per share following the Effective Date of the
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Reverse Split, and the number of shares of Common Stock issued will be reduced.
Consequently, the aggregate par value of the issued Common Stock also will be
reduced. In addition, the number of authorized but unissued shares of Common
Stock will be increased by the Reverse Split, the issuance of which may have the
effect of diluting the earnings per share and book value per share, as well as
the stock ownership and voting rights, of outstanding Common Stock. As the
Reverse Split will increase the number of authorized but unissued shares of
Common Stock, it may be construed as having an anti-takeover effect by
permitting the issuance of shares to purchasers who might oppose a hostile
takeover bid or oppose any efforts to amend or repeal certain provisions of the
Company's Certificate of Incorporation or By-laws.
Stockholders have no right under Delaware law or under the Company's
Certificate of Incorporation or By-laws to dissent from the Reverse Split.
The Common Stock is currently registered under Section 12(g) of the
Exchange Act and as a result, the Company is subject to the periodic reporting
and other requirements of the Exchange Act. The Reverse Split will not affect
the registration of the Common Stock under the Exchange Act, and the Company has
no current intention of terminating its registration under the Exchange Act.
None of the shares of Preferred Stock will be split. However, the
conversion amounts and voting rights of each class of Preferred Stock will be
proportionately adjusted as a result of the Reverse Split as follows: 1.6 shares
of Common Stock and 1.6 votes for each share of Series A; 4 shares of Common
Stock and 4 votes for each share of Series B; 0.4 shares of Common Stock and 0.4
votes for each share of Series C; 4 shares of Common Stock and 4 votes for each
share of Series S; and 0.4 shares of Common Stock and 0.4 votes for each share
of Series P. If the Reverse Split is approved, the Series A, Series C, and
Series P Preferred Stock will each have fractional votes. If the Reverse Split
is approved, conversion of any of said series into Common Stock would cause the
issuance of fractional shares of Common Stock. The Company, however, will not
issue a fraction of one share of Common Stock, but in lieu thereof shall pay to
any person who would otherwise be entitled thereto an amount equal to such
fraction multiplied by the Market Price of Common Stock on the last business day
of the week preceding the week in which the conversion privilege was deemed to
have been exercised. As used herein, "Market Price" means the last reported sale
price regular way on such day or, in case no such reported sale takes place on
such day, the reported closing bid price regular way, in either case on the
principal national securities exchange on which the Common Stock is then listed.
No adjustment shall be made for dividends payable on the Preferred Stock as a
result of the Reverse Split. All other rights and privileges of the holders of
the Preferred Stock will be unaffected by the Reverse Split.
If the Reverse Split is adopted, the number of shares reserved for
grants of stock options and the number of shares that may be purchased upon
exercise of options, warrants or other convertible instruments pursuant to
existing stock option agreements, warrant agreements or other convertible
instruments and the exercise prices thereof will be adjusted appropriately
pursuant to the terms of such agreements.
No Common stockholder's interest will be completely eliminated by
virtue of the Reverse Split, except for those stockholders, if any, owning fewer
than twenty-five shares of the Common Stock. No officer, director, associate or
affiliate of the Company will derive any material benefit from the Reverse Split
other than the benefits which would be enjoyed by any other person holding the
same number of shares.
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Exchange of Stock Certificates
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As soon as practicable after the Effective Date, the Company intends to
require stockholders to exchange their stock certificates ("Old Certificates")
for new certificates ("New Certificates") representing the number of whole
shares of Common Stock into which their shares of Common Stock have been
respectively converted as a result of the Reverse Split (as well as cash in lieu
of fractional shares resulting from the Reverse Split). Stockholders will be
furnished with the necessary materials and instructions for the surrender and
exchange of stock certificates at the appropriate time by the Company's transfer
agent. Stockholders will not be required to pay a transfer or other fee in
connection with the exchange of certificates. STOCKHOLDERS SHOULD NOT SUBMIT ANY
CERTIFICATES TO THE TRANSFER AGENT UNTIL REQUESTED TO DO SO.
Federal Income Tax Consequences of the Reverse Split
- ----------------------------------------------------
The following is a summary of the material anticipated federal income
tax consequences of the Reverse Split to holders of the Common Stock. This
summary is based on the federal income tax laws now in effect and as currently
interpreted; it does not take into account possible changes in such laws or
interpretations, including amendments to applicable statutes, regulations and
proposed regulations or changes in judicial or administrative rulings, some of
which may have retroactive effect. This summary is provided for general
information only and does not purport to address all aspects of the possible
federal income tax consequences of the Reverse Split and IS NOT INTENDED AS TAX
ADVICE TO ANY PERSON. In particular, and without limiting the foregoing, this
summary does not consider the federal income tax consequences to stockholders of
the Company in light of their individual investment circumstances or to holders
subject to special treatment under the federal income tax laws (for example,
life insurance companies, regulated investment companies and foreign taxpayers).
The summary does not address any consequence of the Reverse Split under any
state, local or foreign tax laws.
No ruling from the Internal Revenue Service or opinion of counsel will
be obtained regarding the federal income tax consequences to the stockholders of
the Company as a result of the Reverse Split. ACCORDINGLY, EACH STOCKHOLDER IS
ENCOURAGED TO CONSULT HIS OR HER TAX ADVISOR REGARDING THE SPECIFIC TAX
CONSEQUENCES OF THE PROPOSED TRANSACTION TO SUCH STOCKHOLDER, INCLUDING THE
APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS.
The Company believes that the Reverse Split would be a tax-free
recapitalization to the Company and its stockholders. If the Reverse Split
qualifies as a recapitalization under Section 368(a)(1)(E) of the Internal
Revenue Code of 1986, as amended, a stockholder of the Company who exchanges Old
Certificates solely for New Certificates received from the Company as a result
of the Reverse Split should recognize no gain or loss for federal income tax
purposes, except for any cash received by a stockholder in lieu of a fractional
share. A stockholder's aggregate tax basis in his Common Stock represented by
the New Certificates received from the Company as a result of the Reverse Split
should be the same as his aggregate tax basis in the Common Stock represented by
the Old Certificates. The holding period of shares of the Common Stock
represented by the New Certificates received from the Company as a result of the
10
<PAGE>
Reverse Split should include the period during which shares of the Common Stock
surrendered in exchange therefor were held, provided all such shares of Common
Stock were held as a capital asset on the date of the exchange.
A stockholder who receives cash in lieu of fractional shares will be
treated as if the Company has issued fractional shares to him and then
immediately redeemed such shares for cash. Such stockholder should generally
recognize gain or loss, as the case may be, measured by the difference between
the amount of cash received and the basis of such stockholder's Common Stock
allocable to the fractional shares, had they actually been issued. Such gain or
loss will generally be a capital gain or loss if such stockholder's Common Stock
was held as a capital asset, and any such capital gain or loss will generally be
a long-term capital gain or loss to the extent such stockholder's holding period
for his Common Stock exceeds eighteen months.
THE BOARD OF DIRECTORS BELIEVES THE ADOPTION OF THE PROPOSED AMENDMENT
#1 IS IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS
THAT STOCKHOLDERS VOTE "FOR" THE PROPOSED AMENDMENT #1. FAILURE TO APPROVE THE
REVERSE SPLIT OF THE COMMON STOCK WILL RESULT IN THE CANCELLATION OF CWIG'S
AGREEMENT TO COMPLETE ON A "BEST EFFORTS" BASIS THE PRIVATE PLACEMENT OF $1
MILLION.
PROPOSAL 2.
- -----------
APPROVAL OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION
TO EFFECT A NAME CHANGE
The Board of Directors has adopted a resolution declaring the
advisability of, and is submitting to the stockholders for approval, a proposal
to amend the Company's Certificate of Incorporation (the "Proposed Amendment
#2") to effect a change in the name of the Corporation to Dimensional Visions
Incorporated. The Board of Directors believes it is appropriate to change the
name in order to clarify the nature and purpose of the Company. Management of
the Company has, from time to time, received comments which indicate there may
be some confusion about the Company resulting from use of the words "Group" and
"Ltd." in the Company name, including without limitation, whether the Company is
a conglomerate consisting of a diverse collection of operating subsidiaries, and
whether the Company is domiciled in Canada. Accordingly, the Board of Directors
believes using a more common word to readily identify the Company as a United
States corporation will enhance the corporate image. If for any reason the Board
of Directors deems it advisable, Proposed Amendment #2 may be abandoned at any
time before the Effective Date, whether before or after the Meeting (even if
such proposal has been approved by the stockholders).
THE BOARD OF DIRECTORS BELIEVES THE ADOPTION OF THE PROPOSED AMENDMENT
#2 IS IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS
THAT STOCKHOLDERS VOTE "FOR" THE PROPOSED AMENDMENT #2.
11
<PAGE>
GENERAL
Other Matters
- -------------
The Board of Directors knows of no other business which will be
presented for consideration at the Meeting other than that described above.
However, if any other business should come before the Meeting, it is the
intention of the persons named in the enclosed Proxy to vote, or otherwise act,
in accordance with their best judgment on such matters.
Stockholder Proposals For 1998 Annual Meeting
- ---------------------------------------------
Any proposal that a stockholder intends to present at the 1998 Annual
Meeting of Stockholders must be submitted to the Secretary of the Company at
present office at 8855 North Black Canyon Highway, Suite 2000, Phoenix, Arizona
85021, or if after December 15, 1997, then at its new principal executive
offices, 2301 West Dunlap Avenue, Phoenix, Arizona 85021, no later than February
1, 1998 in order to be considered for inclusion in the proxy statement relating
to that meeting.
Costs of Solicitation
- ---------------------
The Company will bear the costs of soliciting proxies. In addition to
solicitations by mail, the Company's directors, officers and regular employees
may, without additional remuneration, solicit proxies by telephone, facsimile
and personal interviews. The Company has also retained the services of Beacon
Hill Partners, Inc. to provide proxy solicitation services in connection with
the Meeting at an estimated cost of $4,000 plus incidental expenses. The Company
will also request brokerage houses, custodians, nominees and fiduciaries to
forward copies of the proxy material to those persons for whom they hold shares
and request instructions for voting the Proxies. The Company will reimburse such
brokerage houses and other persons for their reasonable expenses in connection
with this distribution.
By Order of the Board of Directors,
GEORGE S. SMITH,
Chairman of the Board
Phoenix, Arizona
December 1, 1997
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, SIGN, DATE, AND
RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE
WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION IS
APPRECIATED.
12
<PAGE>
EXHIBIT A
RESOLVED: That, subject to stockholder approval, the following
paragraph be inserted prior to the Article FOURTH of the
Certificate of Incorporation:
"That upon the filing date of the Certificate of Amendment of
Restated Certificate of Incorporation of the Corporation (the
"Effective Date"), a one-for-twenty-five reverse split of the
Corporation's Common Stock shall become effective, such that
each twenty-five shares of Common Stock outstanding and held
of record by each stockholder of the Corporation (including
treasury shares) immediately prior to the Effective Date shall
represent one share of Common Stock from and after the
Effective Date."
A-1
<PAGE>
EXHIBIT B
RESOLVED: That, subject to stockholder approval, Article FIRST of the
Certificate of Incorporation shall be amended and restated
as follows:
"FIRST: The name of the corporation (hereinafter called the
"corporation") is
DIMENSIONAL VISIONS INCORPORATED"
B-1
<PAGE>
DIMENSIONAL VISIONS GROUP, LTD.
8855 North Black Canyon Highway, Suite 2000 2301 West Dunlap Avenue
Phoenix, Arizona 85021 Phoenix, Arizona 85021
Until approximately December 15, 1997 After approximately December 15, 1997
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 8, 1998
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY
AND SHOULD BE RETURNED AS SOON AS POSSIBLE
The undersigned, having received notice of the Special Meeting of
Stockholders and the Board of Directors' proxy statement therefor, and revoking
all prior proxies, hereby appoint(s) George S. Smith, John D. McPhilimy, and Roy
D. Pringle, and each of them, attorneys or attorney of the undersigned (with
full power of substitution in them and each of them) for and in the name(s) of
the undersigned to attend the Special Meeting of Stockholders of DIMENSIONAL
VISIONS GROUP, LTD. (the "Company") to be held on January 8, 1998 at 10:00 a.m.
at the offices of Gammage & Burnham P.L.C., Two North Central Avenue, Suite
1800, Phoenix, Arizona 85004, and any adjournments thereof, and there to vote
and act upon the following matters in respect of all shares of stock of the
Company which the undersigned may be entitled to vote or act upon, with all the
powers the undersigned would possess if personally present.
In their discretion, the proxy holders are authorized to vote upon such
other matters as may properly come before the meeting or any adjournments
thereof. The shares represented by this proxy will be voted as directed by the
undersigned. If no direction is given with respect to any proposal, this proxy
will be voted as recommended by the Board of Directors. Attendance of the
undersigned at the meeting or at any adjournment thereof will not be deemed to
revoke this proxy unless the undersigned shall revoke this proxy in writing.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO
COMPLETE, DATE, SIGN AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE.
A VOTE "FOR" PROPOSED AMENDMENT #1 AND PROPOSED AMENDMENT #2 TO THE
COMPANY'S CERTIFICATE OF INCORPORATION IS RECOMMENDED BY THE BOARD OF DIRECTORS.
FAILURE TO APPROVE THE REVERSE SPLIT OF THE COMMON STOCK WILL RESULT IN
THE CANCELLATION OF CWIG'S AGREEMENT TO COMPLETE ON A "BEST EFFORTS" BASIS THE
PRIVATE PLACEMENT OF $1 MILLION.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND ANY ADJOURNMENT
THEREOF.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED STOCKHOLDER(S). IF NO OTHER INDICATION IS MADE, THE
PROXIES SHALL VOTE "FOR" THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION.
<PAGE>
1. To approve the amendment to the Company's Certificate of Incorporation to
effect a one-for-twenty-five reverse split of the Common Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To approve the amendment to the Company's Certificate of Incorporation
to change the name of the Corporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, to transact such other business as may properly
come before this meeting and any adjournments thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Please mark your votes as indicated: [X]
UNLESS PREVIOUSLY REVOKED THIS PROXY SHALL REMAIN VALID
AND IN FULL EFFECT UNTIL FEBRUARY 28, 1998.
MARK HERE FOR ADDRESS CHANGE [ ] MARK HERE IF YOU PLAN TO ATTEND [ ]
AND NOTE AT LEFT THE MEETING
Dated:_______________, 199_
___________________________
Signature
___________________________
Signature if held jointly
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD
BY JOINT OWNERS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY AUTHORIZED OFFICER, GIVING
FULL TITLE. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED
PERSON, GIVING FULL TITLE.
