INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
[X] Filed by Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14c-5(d)(2))
[ ] Definitive Information Statement
Commission File No. 333-25900
DONNEBROOKE CORPORATION
(Name of Registrant as Specified in Its Charter)
IRS Employer Identification No. 75-2228820
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(9) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computer
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identifying 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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4) Date Filed:
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Donnebrooke Corporation
16910 Dallas Parkway, Suite 100
Dallas, Texas 75248
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
To Be Held February 16, 1999
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of Donnebrooke Corporation, a Delaware corporation (the "Company"),
will be held at the Company's office at 16910 Dallas Parkway, Suite 100, Dallas,
Texas, on Tuesday, February 16, 1999, at 10:00 a.m., local time, or at such
other time and place to which the Meeting may be adjourned. An Information
Statement for the Meeting is enclosed.
The Meeting is for the following purposes:
(1) To elect two directors to serve until the next Annual Meeting of
Shareholders or until their successors are duly elected and qualified;
(2) To approve an amendment to the Company's Certificate of Incorporation
to effect a One for One Thousand (1000) reverse split of the Company's
common stock and to reduce the number of authorized shares from One
Billion shares to Fifty Million shares; and
(3) To transact any other business that may properly come before the
Meeting or any adjournments thereof.
The close of business on January 25, 1999, has been fixed as the record
date for determining shareholders entitled to notice of and to vote at the
Meeting or any adjournments thereof. For a period of at least 10 days prior to
the Meeting, a complete list of shareholders entitled to vote at the Meeting
will be open to examination by any shareholder during ordinary business hours at
the Company's office.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Information concerning the matters to be acted upon at the Meeting is
set forth in the accompanying Information Statement.
By Order of the Board of Directors
Kevin B. Halter, Jr., Secretary
Dallas, Texas
January 26, 1999
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Donnebrooke Corporation
16910 Dallas Parkway, Suite 100
Dallas, Texas 75248
INFORMATION STATEMENT
For
SPECIAL MEETING OF SHAREHOLDERS
To Be Held February 16, 1999
This Information Statement is first being mailed on January 26, 1999,
to shareholders of Donnebrooke Corporation, a Delaware corporation (the
"Company"), by the Board of Directors in connection with the Special Meeting of
Shareholders (the "Meeting") to be held at the offices of the Company at 16910
Dallas Parkway, Suite 100, Dallas, Texas, on Tuesday, February 16, 1999, at
10:00 a.m., local time, or at such other time and place to which the Meeting may
be adjourned.
The purposes of the Meeting are: (i) to elect two directors to serve
until the next Annual Meeting of Shareholders or until their successors are duly
elected and qualified; (ii) to approve an amendment to the Company's Certificate
of Incorporation to effect a One for One Thousand reverse split of the Company's
common stock and to reduce the number of authorized shares from One Billion
shares to Fifty Million shares; and (iii) such other matters as may properly
come before the Meeting or any adjournments thereof.
RECORD DATE AND VOTING SECURITIES
The record date for determining shareholders entitled to vote at the
Meeting was the close of business on January 25, 1999 (the "Record Date"), at
which time the Company had issued and outstanding 37,333,000 shares of Common
Stock, par value $.00001 per share (the "Common Stock"). The shares of Common
Stock constitute the only outstanding voting securities of the Company entitled
to be voted at the Meeting.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY. THE COMPANY HAS BEEN ADVISED THAT SHAREHOLDERS OWNING AN AGGREGATE OF
AT LEAST 19,692,803 SHARES OF COMMON STOCK (CONSTITUTING MORE THAN 52% OF THE
ISSUED AND OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY AS OF JANUARY 25,
1999) INTEND TO VOTE IN FAVOR OF ALL MATTERS TO BE ACTED UPON AT THE MEETING,
THEREBY ASSURING THEIR ADOPTION.
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METHOD OF VOTING
To be elected, each director must receive the affirmative vote of the
holders of a plurality of the issued and outstanding shares of Common Stock
represented in person or by proxy at the Meeting. Approval of Proposal Two will
require the affirmative vote of the holders of the majority of the shares of
Common Stock entitled to vote and represented at the Meeting in person or by
proxy. Abstentions will have the effect of a vote against the proposal.
Non-votes (as defined below) will have no effect on the voting of any of the
proposals. A "non-vote" occurs when a nominee holding shares for a beneficial
owner has voted on certain matters at the Annual Meeting pursuant to
discretionary authority or instructions from the beneficial owner but may not
have received instructions or exercised discretionary voting power with respect
to other matters.
A quorum will consist of a majority of the shares of Common Stock entitled to
vote at the Special Meeting.
PROPOSAL ONE: ELECTION OF DIRECTORS
The Board of Directors of the Company has nominated two persons,
Messrs. Kevin B. Halter and Kevin B. Halter, Jr., for election to the Board of
Directors, each to serve until the next Annual Meeting of Stockholders or until
his successor is elected and qualified. Each of the nominees is currently
serving as a director and has consented to his nomination and, so far as the
Company is aware, will serve as a director if elected. For information regarding
the background and business experience of each see "DIRECTORS AND EXECUTIVE
OFFICERS" below.
DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth certain information regarding the background and
business experience of the Company's Board of Directors and the Company's
executive officers:
Name Age Position
---- --- --------
Kevin B. Halter 63 Director
Kevin B. Halter, Jr. 38 President,Secretary
and Director
Kevin B. Halter has served as a Director of the Company since October 16, 1998.
Mr. Halter has served as President, Chief Executive Officer and Chairman of the
Board of Millennia, Inc. since June 1994. In addition, Mr. Halter has served as
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Chairman of the Board and Chief Executive Officer of Halter Capital Corporation
("HCC"), a privately held investment and consulting company, since 1987, and as
its President since June 1995. Mr. Halter is the father of Kevin B. Halter, Jr.
Kevin B. Halter, Jr. has served as President, Secretary and a Director of the
Company since October 16, 1998. Mr. Halter has also served as Vice President,
Secretary and a director of Millennia, Inc. since January 1994. He is also the
President of Securities Transfer Corporation, a registered stock transfer
company, a position which he has held since 1987. Mr. Halter is also Vice
President and Secretary of HCC. Kevin B. Halter, Jr. is the son of Kevin B.
Halter.
SHARE OWNERSHIP BY PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth information, as of January , 1999,
regarding the beneficial ownership of the Common Stock of the Company by: (i)
each person known by the Company to beneficially own more than 5% of the
outstanding shares of Common Stock; (ii) each director and executive officer of
the Company; and (iii) the directors and executive officers of the Company as a
group. The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock owned by them, unless otherwise noted.
Amount and Nature
Name of Beneficial of Beneficial Percent
Owner or Group Ownership of Class
- -------------------- ----------------- --------
Halter Capital Corporation (1) (2) 19,490,735 52.2%
Kevin B. Halter, Jr., President, 67,356 *
Secretary and Director (1) (2)
Kevin B. Halter, Director (1) (2) -0- *
Jerald Hamman Arnold 5,723,099 15.3%
11711 Memorial, Unit 511
Houston, Texas 77024
Jenifer Annette Arnold 2,293,750 6.1%
1215 Briarpark
Houston, Texas 77042
All Directors and Executive Officers
as a group (two in number) 67,356 *
- -----------
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* Less than 1%.
(1) The address for each is 16910 Dallas Parkway, Suite 100, Dallas, Texas
75248.
(2) Kevin B. Halter and Kevin B. Halter Jr. serve as directors and
officers of HCC and as a result may each be deemed to be the
beneficial owner of the 19,490,735 shares of Common Stock beneficially
owned by Halter Capital Corporation. However, pursuant to Rule 16a-3
promulgated under the Exchange Act, they expressly disclaim that they
are the beneficial owners, for purposes of Section 16 of the Exchange
Act, of any such stock, other than those shares in which they have an
economic interest.
EXECUTIVE COMPENSATION
The Company paid no compensation of any type or in any amount to any of its
directors or officers at any time during the past five years.
BACKGROUND
Donnebrooke Corporation (the "Company") is a publicly owned corporation (with
more than 700 stockholders) which currently has no assets and no liabilities.
The current business purpose of the Company is to seek out and obtain a merger
partner, thereby benefiting its stockholders by merging with an existing
business which is either profitable or is likely to be profitable in the near
future. Its organizational costs and limited operational expenses have been paid
by its principal shareholders since it has never had any significant operations
or revenues. Currently the Company's stock does not trade on any exchange or the
OTC market and there is no known public market for its stock.
On October 16, 1998, Halter Capital Corporation executed a Stock Purchase
Agreement with Albert Ray Allison III ("Seller") and acquired from the Seller
19,490,735 shares (approximately 52% of the total Company shares issued and
outstanding) for a purchase price of $20,000. Please see Annex A for a complete
copy of the Stock Purchase Agreement. On October 16, 1998, Albert Ray Allison
III and Reda Louise Allison resigned as officers and directors of the Company
and caused Kevin B. Halter and Kevin B. Halter, Jr. to be elected to fill the
vacancies that had been created by their resignations. Subsequent to that date,
Halter Capital Corporation paid to the State of Delaware the Company's
delinquent franchise taxes and caused the Company's Certificate of Incorporation
to be reinstated. The current officers and directors of the Company also caused
to be prepared and filed with the Securities and Exchange Commission various
periodic reports on Form 10-K and Form 10-Q so that the Company's delinquent
filings have been cured.
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PROPOSAL TWO: REVERSE STOCK SPLIT OF COMMON STOCK
The Board of Directors has approved and recommends that the stockholders of the
Company approve amending Article IV of the Company's Certificate of
Incorporation so that it will read in its entirety as follows:
"The amount of total authorized capital stock the
Corporation shall have the authority to issue is 50,000,000
shares of Common Stock, each having a par value of $.00001,
all of the same class. Each one share of the corporation's
Common Stock issued and outstanding immediately prior to the
effective date of this Amendment shall be and hereby is
automatically changed without further action into one-one
thousandth (1/1000) of a fully paid and nonassessable share of
the Corporation's Common Stock, provided that no factional
shares shall be issued pursuant to such change. The
Corporation shall issue to each stockholder who would
otherwise be entitled to a fractional share as a result of
such change one full share of the Corporation's Common Stock."
Summary of the Proposed Reverse Split
The Board of Directors has adopted a resolution declaring the advisability of,
and submits to the stockholders for approval, a proposal to amend the Company's
Certificate of Incorporation to effect a reverse split (the "Reverse Split") of
the Company's issued and outstanding Common Stock as of 5:00 p.m. Central
standard time, on the effective date of the amendment on the basis that each
thousand shares of Common Stock then outstanding will be converted into one
share of Common Stock. No fraction of a share of Common Stock will be issued as
a result of such exchange. In lieu thereof all fractional shares which would
otherwise be issuable as a result of the exchange described above will be
rounded up to the nearest whole share and the stockholder who would otherwise be
entitled to a fraction of a share will be issued one full share in lieu thereof.
The proposal may be abandoned by the Board of Directors at any time prior to the
date and time at which the Reverse Split is scheduled to become effective (the
"Effective Date") if for any reason the Board of Directors deems it advisable to
abandon the proposal.
The effect of the Reverse Split on the holders of Common Stock will be as
follows:
(i) Holders of fewer than one thousand (1000) shares of Common Stock on the
Effective Date will have their shares automatically converted in the Reverse
Split into the right to receive one full share in lieu of any fractional share.
(ii) Holders of one thousand (1000) or more shares of Common Stock on the
Effective Date will have their shares automatically converted in the Reverse
Split into the number of whole shares equal to the number of their shares
divided by one thousand and the right to receive one full share in lieu of any
fractional share. Some round lot holders will become odd lot holders as a result
of the Reverse Split and, accordingly, may incur increased brokerage commissions
when they sell their Common Stock.
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Amendment to the Certificate of Incorporation
An amendment to the Company's Certificate of Incorporation in substantially the
form set forth above, assuming approval of the Reverse Split by the stockholders
at the Special Meeting, will be filed with the Secretary of State of Delaware as
soon as practical after the date of Special Meeting and the Reverse Split will
become effective as of 5:00 p.m. Central standard time, on the date of such
filing. It is expected that such filing will take place within 72 hours after
the conclusion of the Special Meeting. Without any further action on the part of
the Company, the Company's stockholders will have their shares of issued and
outstanding Common Stock converted, on the Effective Date, into the right to
receive the number of whole shares equal to the number of their shares divided
by one thousand (1000) plus one whole share in lieu of any fractional share.
Effect of the Proposed Reverse Split and Reduction in Number of Authorized
Shares
The proposed Reverse Split will be effected by an amendment to the Certificate
of Incorporation in substantially the form set forth above. Stockholders have no
right to dissent from the proposed Reverse Split under Delaware law.
On the Effective Date, each stockholder of record will continue as a stockholder
of the Company with respect to the whole share or shares resulting from the
Reverse Split. Each such stockholder will continue to share in the future growth
and earnings of the Company, if any, to the extent of his or her ownership of
shares of Common Stock following the Reverse Split.
The Company currently has authorized capital stock of one billion shares. After
the adoption of the proposed amendment to the Company's Certificate of
Incorporation, the Company will have authorized capital stock of fifty million
shares of Common Stock. As of the Record Date the number of issued and
outstanding shares of Common Stock was 37,333,000. Based upon the Company's best
estimates, the number of issued and outstanding shares of Common Stock will be
reduced as a result of the Reverse Split from 37,333,000 to approximately
38,000. Although the number of shares of Common Stock outstanding will decrease,
the number of authorized shares of Common Stock available for issuance without
further action by the stockholders will exceed 49,000,000 and be more than
adequate for any future anticipated use by the Company. The Board of Directors
will have discretion to determine when and upon which terms such shares may be
issued. The Board of Directors has no present agreements, commitments or plans
to issue additional shares of Common Stock.
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Reasons For the Reverse Split and Reduction in Number of Authorized Shares
The Board of Directors believes that the reverse stock split will enable the
Company to more readily find an acceptable merger partner for the Company since
many existing incorporated operating businesses would object to merging or
consolidating with the Company if its authorized number of hares of capital
stock is so large that the merger ratio is unfavorable to the operating
business. The Board desires, at the same time that it effects the Reverse Split,
to change the capital accounts of the corporation. Reducing the number of
authorized shares of Common Stock from One Billion to Fifty Million will reduce
the Company's stated capital from $10,000 to $500. So long as the Company has no
income and no operations this change will also reduce the franchise tax that it
is obligated to pay annually. In the opinion of the Company's Board of Directors
Fifty Million shares of authorized Common Stock is adequate for all corporate
purposes that the Company might consider in the near future.
Exchange of Stock Certificates and Distribution of Cash
It is expected that the amendment of the Company's Certificate of Incorporation
effecting the Reverse Split will be filed within 72 hours after the Special
Meeting. Pursuant to the terms of such amendment, the Reverse Split will become
effective at 5:00 p.m., Central Standard Time, on the Effective Date.
As soon as practicable after the Effective Date, the Company will send letters
of transmittal to all stockholders of record on the Effective Date for use in
transmitting stock certificates to the Company's exchange agent, Securities
Transfer Corporation, Dallas, Texas. Upon proper completion and execution of the
letter of transmittal and return thereof to the exchange agent, together with
the stockholder's old stock certificates, each stockholder will receive a new
certificate representing the number of whole shares of Common Stock into which
his/her existing shares of Common Stock have been converted as a result of the
Reverse Split. Please see "Effect of the Proposed Reverse Split", above.
Federal Income Tax Consequences of the Proposed Stock Split
The Company believes that the proposed Reverse Split will not result in any
adverse tax consequences either to the Company or its stockholders. As a result
of the Reverse Split, a stockholder will increase his or her basis in each share
of the Common Stock owned from the amount that was paid for the share to an
amount representing one thousand (1000) times the amount paid. Since the
stockholder will own fewer shares after the Reverse Split, any realized gain or
loss will be identical to the gain or loss which would have been realized by the
stockholder if the split had not occurred.
STOCKHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THIS
TRANSACTION.
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Vote Required for Approval
At least a majority of the issued and outstanding shares of Common Stock of the
Company must be voted in favor of the proposal to amend the Certificate of
Incorporation. Abstentions and broker non-votes will have the effect of a vote
against the proposal. It is the current intention of the Company's officers and
directors to vote in favor of the proposals described herein. These officers and
directors currently beneficially own more than 52% of the Common Stock of the
Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and the disclosure
requirements of Item 405 of Regulation S-K require the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% stockholders are required by Securities and Exchange Commission
regulation to furnish the Company copies of all Section 16(a ) forms they file.
Based solely on the review of the copies of such forms furnished to the Company,
or written representations that no Forms 5 were required, the Company believes
that during fiscal year ending December 31, 1998 all Section 16(a) filing
requirements applicable to its greater than 10% beneficial owners, directors and
officers were complied with except with respect to Mr. Jerald Hamman Arnold.
OTHER BUSINESS
The Board of Directors knows of no matters other than those described herein
that will be presented for consideration at the Meeting.
MISCELLANEOUS
All costs incurred in the preparation and mailing of this Information Statement
will be borne by the Company. The Company may make arrangements with brokerage
houses and other custodians, nominees and fiduciaries for the forwarding of
information materials to the beneficial owners of shares of Common Stock held of
record by such persons, and the Company may reimburse such brokerage houses and
other custodians, nominees and fiduciaries for their out-of-pocket expenses
incurred in connection therewith.
By Order of the Board of Directors
Kevin B. Halter, Jr., Secretary
Dallas, Texas
January 26, 1999
