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SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF
THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
MOBINETIX SYSTEMS, INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-----------------------
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
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MOBINETIX SYSTEMS, INC.
500 OAKMEAD PARKWAY
SUNNYVALE, CA 94086
INFORMATION STATEMENT
INTRODUCTION
GENERAL INFORMATION FOR STOCKHOLDERS
This information statement is furnished in connection with the prior
receipt by the Board of Directors of MobiNetix Systems, Inc., a Delaware
corporation (the "COMPANY"), of approvals by written consent of the holders of a
majority of the Company's Common Stock and two-thirds majority of Preferred
Stock voting separately by series on an as-if-converted to common stock basis
(the "VOTING CAPITAL STOCK") of proposal 1 (the "PROPOSAL 1") to approve an
amendment (the "AMENDMENT 1") to the Company's Certificate of Incorporation to
change the Company's name from "MobiNetix Systems, Inc." to "@POS.com, Inc." and
by written consent of holders of majority of the Voting Capital stock of
proposal 2 (the "PROPOSAL 2") to approve an amendment (the "AMENDMENT 2") to the
Company's 1996 Stock Plan (the "STOCK PLAN") to increase the maximum aggregate
number of shares of Common Stock of the Company (the "SHARES") which may be
optioned and sold under the Stock Plan from 1,950,000 to 2,950,000 shares. This
information statement is being first sent to stockholders on or about June 8,
1999. The Company anticipates that the Amendment 1 and the Amendment 2 (these
Amendments) will become effective on or about June 28, 1999.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
VOTE REQUIRED
The vote required approving the Proposal 1 are the affirmative vote of
the holders of a majority of the Company's Common Stock and two thirds majority
of Preferred Stock, voting separately on an as-if-converted to Common Stock
basis. The vote required approving the Proposal 2 are the affirmative vote of
the holders of majority of the Company's Voting Capital Stock, voting together
on an as-converted basis. Each holder of Common Stock is entitled to one vote
for each share held. Each holder of Series B Preferred is entitled to
approximately 2.03 votes for each share held. Each holder of Series C Preferred
is entitled to approximately 40.90 votes for each share held. Each holder of
Series D Preferred is entitled to one vote for each share held. The record date
for purposes of determining the number of outstanding shares of Common Stock and
Preferred Stock of the Company, and for determining stockholders entitled to
vote, is the close of business on June 3, 1999 (the "RECORD DATE"), the day on
which the Board of Directors of the Company adopted these resolutions setting
forth and recommending these Amendments. As of the Record Date, the Company had
outstanding [2,012,357] of Common Stock, [no] shares of Series A Preferred
Stock, [662,337] shares of Series B Preferred, Stock, [28,125] shares of Series
C Preferred Stock, and [1,273,149] shares of Series D Preferred Stock.
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VOTE OBTAINED - SECTION 228 OF THE DELAWARE GENERAL CORPORATION LAW
Section 228 of the Delaware General Corporation Law (the "DELAWARE LAW")
provides that the written consent of the holders of outstanding shares of Voting
Capital Stock, having not less than the minimum number of votes which would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, may be substituted for such a
special meeting. Pursuant to Section 157 of the Delaware Law and Section 6 of
the Restated Certificate of Incorporation, a majority of the outstanding shares
of Common Stock and two-thirds majority of Preferred Stock entitled to vote
thereon is required in order to amend the Certificate of Incorporation. Pursuant
to Section 157 of the Delaware Law and Section 14 of the Stock Plan, a majority
of the outstanding shares of Voting Capital Stock entitled to vote thereon is
required in order to amend the Stock Plan. In order to eliminate the costs and
management time involved in holding a special meeting and in order to effect
these Amendments as early as possible in order to accomplish the purposes of the
Company as hereafter described, the Board of Directors of the Company voted to
utilize, and did in fact obtain, the written consent of the holders of a
majority in interest of the Voting Capital Stock of the Company.
Pursuant to Section 228 of the Delaware Law, the Company is required to
provide prompt notice of the taking of the corporate action without a meeting to
the stockholders of record who have not consented in writing to such action.
This Information Statement is intended to provide such notice. No dissenters' or
appraisal rights under the Delaware Law are afforded to the Company's
stockholders as a result of the approval of the Proposal.
PROPOSAL 1 -- TO CHANGE THE COMPANY'S NAME TO @POS.COM, INC.
GENERAL
At a meeting of the Company's Board of Directors on June 3, 1999,
subject to stockholder approval, the Board of Directors amended the Certificate
of Incorporation to change the Company's Name from "MobiNetix Systems, Inc." to
"@POS.com, Inc."
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
The Board of Directors has approved and the holders of the majority of
the Company's Common Stock and two-thirds majority of Preferred Stock approved
and adopted an amendment to the Company's Certificate of Incorporation to
provide for a change in the Company's name from "MobiNetix Systems, Inc." to
@POS.com, Inc." Article I of the Company's Certificate of Incorporation will be
amended in its entirety to read as follow:
"The Name of the corporation is @POS.com, Inc. (the "Corporation")."
The Company in its present form is the result of a fiscal 1996 acquisition
agreement between PenUltimate, Inc. ("PenUltimate") and PenWare Inc.
("PenWare"). The former operations of PenUltimate, which had been engaged in
developing and marketing application software products for sales and other
mobile professionals, were discontinued in January 1996. In June 1996, common
and preferred stockholders of PenWare exchanged their holdings in PenWare for
shares of PenUltimate common stock, and PenWare became a wholly owned subsidiary
of PenUltimate. In August 1996, PenUltimate changed its name to MobiNetix
Systems, Inc. ("MobiNetix").
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The Company has developed certain technologies that allow merchants to
web-enable the Point Of Sales ("POS") environment. By web-enabling POS
transaction terminals, the Company's customers will be able to run
advertisements, promotions, and surveys at the POS, retrieve receipts via a
personal computer utilizing a consumer-focused web-site and provide other
valuable one-to-one marketing services. It is the Company's intent to further
develop this technology to allow merchants to create and maintain web-based
relationships with its customers.
In order to establish a brand image that is consistent with the
aforementioned business strategy, the Company feels it is necessary to change
its name to @POS.com, Inc., consistent with the overall corporate rebranding and
marketing strategies.
The Board believes that the name MobiNetix Systems, Inc., currently has a
level of brand recognition and value in the marketplace that is generally
favorable and the company will continue to leverage any existing brand equity to
establish the new name. The choice of @POS.com, Inc. as the Company's new name
is intended to shift the focus of the Company from a hardware centric entity to
an Internet services company. Such a shift will better allow for the
establishment and expansion of the Company's internet-based business offerings,
and help the Company compete more effectively in that industry. The name change
will not adversely affect or change the business of the Company or the services
offered to the Company's current customers in the markets presently served by
the Company. The name will act as a key facilitator in the expansion of the
Company's revised business model.
PROPOSAL 2 -- TO INCREASE THE AGGREGATE NUMBER OF SHARES UNDER THE STOCK PLAN
GENERAL
At a meeting of the Company's Board of Directors on June 3, 1999, the
Board of Directors amended the Stock Plan to increase the maximum aggregate
number of Shares which may be optioned and sold under the Stock Plan from
1,950,000 to 2,950,000. On June 8, 1999 the proposal to amend the Stock Plan was
approved by written consent of the holders of a majority of the Company's Voting
Capital Stock, voting together as a single class.
AMENDMENT TO THE STOCK PLAN
The Company's Stock Plan was approved by the Board of Directors on October
22, 1996 and by the stockholders on January 31, 1997. On June 3, 1999 the Board
of Directors approved an amendment to the Stock Plan to increase the number of
shares of Common Stock authorized for issuance thereunder by 1,000,000 shares,
bringing the total number of shares reserved under the Stock Plan to 2,950,000
shares of Common Stock.
Stock options play a key role in the Company's ability to recruit, reward
and retain executives and key employees and consultants. Technology companies
have historically used stock options as an important part of recruitment and
retention packages. The Company competes directly with these technology
companies for experienced executives and engineers and must be able to offer
comparable packages to attract the caliber of individuals that the Company
believes is necessary to provide the growth that stockholders desire. The Stock
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Plan provides for the grant of options and stock purchase rights to employees
and consultants to provide additional incentive to encourage their continued
service to the Company.
The essential provisions of the Stock Plan are outlined below.
SUMMARY OF THE STOCK PLAN
GENERAL. The purpose of the Stock Plan is to attract and retain the best
available personnel for positions of substantial responsibility within the
Company, to provide additional incentives to the employees and consultants of
the Company and to promote the success of the Company's business. Options and
stock purchase rights granted under the Stock Plan may be either "incentive
stock options," as defined in Section 422 of the Internal Revenue Code of 1986,
as amended (the "CODE"), or nonstatutory stock options and stock purchase rights
("SPRS").
ADMINISTRATION. The Stock Plan may be administered by the Board of
Directors or a committee of the Board (the "COMMITTEE"), which Committee shall,
in the case of options intended to qualify as "performance-based compensation"
within the meaning of Section 162(m) of the Code, consist of two or more
"outside directors" within the meaning of Section 162(m) of the Code. The
Committee has the power to determine the terms of the options or SPRs granted,
including the exercise price, the number of shares subject to each option or
SPR, the exercisability thereof, and the form of consideration payable upon such
exercise. In addition, the Committee has the authority to amend, suspend or
terminate the Stock Plan, provided that no such action may affect any share of
Common Stock previously issued and sold or any option previously granted under
the Stock Plan.
TERMS AND CONDITIONS OF OPTIONS. Options and SPRs granted under the Stock
Plan are not generally transferable by the optionee, and each option and SPR is
exercisable during the lifetime of the optionee only by such optionee. Options
granted under the Stock Plan must generally be exercised within three months of
the end of the optionee's status as an employee or consultant of the Company, or
within twelve months after such optionee's termination by death or disability,
but in no event later than the expiration of the option's ten year term. In the
case of SPR's, unless the Committee determines otherwise, the restricted stock
purchase agreement shall grant the Company a repurchase option exercisable upon
the voluntary or involuntary termination of the purchaser's employment with the
Company for any reason (including death or disability). The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be
the original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse
at a rate determined by the Committee. The exercise price of all incentive stock
options granted under the Stock Plan must be at least equal to the fair market
value of the Common Stock on the date of grant. The exercise price of
nonstatutory stock options and SPRs granted under the Stock Plan is determined
by the Committee, but with respect to nonstatutory stock options intended to
qualify as "performance-based compensation" within the meaning of Section 162(m)
of the Code, the exercise price must be at least equal to the fair market value
of the Common Stock on the date of grant. With respect to any participant who
owns stock possessing more than 10% of the voting power of all classes of the
Company's outstanding capital stock, the exercise price of any incentive stock
option must be at least 110% of the fair market value on the grant date and the
term of such incentive stock option must not exceed five years. The term of all
other options granted under the Stock Plan may not exceed ten years. The Company
will receive no monetary consideration for the granting of options or SPRs under
the Stock Plan.
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ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The Stock Plan provides that
in the event of a merger of the Company with or into another corporation, a sale
of substantially all of the Company's assets or a like transaction involving the
Company, each option shall be assumed or an equivalent option substituted by the
successor corporation. If the outstanding options are not assumed or substituted
as described in the preceding sentence, the Optionee shall fully vest in and
have the right to exercise the option or SPR as to all of the optioned stock,
including shares as to which it would not otherwise be exercisable. If an option
or SPR becomes fully vested and exercisable in the event of a merger or sale of
assets, the Administrator shall notify the optionee that the option or SPR shall
be fully vested and exercisable for a period of fifteen (15) days from the date
of such notice, and the option or SPR will terminate upon the expiration of such
period.
An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as long-term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the excise price and the lower of (i)
the fair market value of the shares at the date of the option exercise or (ii)
the sale price of the shares. A different rule for measuring ordinary income
upon such a premature disposition may apply if the optionee is also an officer,
director or 10% stockholder of the Company. The Company will be entitled to a
deduction in the same amount as the ordinary income recognized by the optionee.
Any gain recognized on such a premature disposition of the shares in excess of
the amount treated as ordinary income will be characterized as long-term capital
gain, depending on the holding period.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any taxable
income at the time he is granted a nonstatutory option. However, upon its
exercise, the optionee will recognize taxable income generally measured as the
excess of the then fair market value of the shares purchased over the purchase
price. Any taxable income recognized in connection with an option exercise by an
optionee who is also an employee of the Company will be subject to a tax
withholding by the Company. Upon resale of such shares by the optionee, any
difference between the sales price and the optionee's purchase price, to the
extent not recognized as taxable income as described above, will be treated as
long-term or short-term capital gain or loss, depending on the holding period.
The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the optionee with respect to shares acquired upon
exercise of a nonstatutory option.
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the Stock Plan and does not purport to be complete. Reference
should be made to the applicable provisions of the Code. In addition, this
summary does not discuss the tax consequences of the optionee's death or the
income tax laws of any municipality, state or foreign country in which an
optionee may reside.
CERTAIN MATTERS RELATED TO THESE PROPOSALS
These Amendments will become effective approximately 20 days after this
Information Statement has been distributed to the Company's stockholders.
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SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding the beneficial ownership of each class of the Company's voting
securities as of June 3, 1999, by (a) each beneficial owner of more than 5% of
the Company's Common Stock or Preferred Stock, (b) the Chief Executive Officer
and the other four executive officers who earned more than $100,000 during the
last fiscal year (c) each director of the Company and (d) all directors and
executive officers of the Company as a group. Except as otherwise indicated,
each person has sole voting and investment power with respect to all shares
shown as beneficially owned, subject to community property laws where
applicable.
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial Percent of
Title of Class Name and Address of Beneficial Owner Ownership(1)(2) Class
- --------------- -------------------------------------------- ----------------- ------------
<S> <C> <C> <C>
Common Stock Aziz Valliani (3) 423,099 19.4%
c/o MobiNetix Systems, Inc.
500 Oakmead Parkway, Sunnyvale, CA 94086
Common Stock David M. Licurse, Sr. (4) 219,392 10.6%
c/o MobiNetix Systems, Inc.
500 Oakmead Parkway, Sunnyvale, CA 94086
Common Stock Llavan Fernando (5) 214,156 10.4%
c/o MobiNetix Systems, Inc.
500 Oakmead Parkway, Sunnyvale, CA 94086
Common Stock Abbas Rafii (6) 208,926 10.2%
c/o MobiNetix Systems, Inc.
500 Oakmead Parkway, Sunnyvale, CA 94086
Common Stock Wilmont Living Trust (7) 190,000 9.4%
13333 La Cresta Drive, Los Altos, CA 94022
Common Stock Paul Dali (8) 41,145 2.0%
c/o MobiNetix Systems, Inc.
500 Oakmead Parkway, Sunnyvale, CA 94086
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Common Stock William Powar (9) 24,500 1.2%
c/o MobiNetix Systems, Inc.
500 Oakmead Parkway, Sunnyvale, CA 94086
Common Stock Vivian Stevenson (10) 24,500 1.2%
c/o MobiNetix Systems, Inc.
500 Oakmead Parkway, Sunnyvale, CA 94086
Common Stock All Directors and Officers as a group 1,155,718 48.3%
(seven persons) (11)
Series B Life Investors Insurance Company of America 352,942 19.0%
Preferred 4333 Edgewood Rd NE
Stock Cedar Rapids, IA 52499
Series C Nazem & Company 28,125 30,5%
Preferred 3000 Sand Hill Road, Building 2, Suite 205
Stock Menlo Park, CA 94025
Series D Welch Allyn, Inc. 1,273,149 33.8%
Preferred 4619 Jordan Road
Stock Skaneateles Falls, NY 13153
Preferred All Directors and Officers as a group (one 1,273,149 33.8%
Stock person)
- --------------- -------------------------------------------- ---------------- --------
</TABLE>
(1) The Company effected a reverse stock split in October 1996, converting each
share of Series B Preferred into one-half share, increasing the conversion
ratio of Series B Preferred into Common Stock from 1:1 to 1:2.03,
converting each share of Series C Preferred into one-fourth share and
increasing the conversion ratio of Series C Preferred into Common Stock
from 1:10 to 1:40.90.
(2) Applicable percentage ownership is based on 1,971,387 shares of Common
Stock outstanding as of May 24, 1999, 686,969 shares of Series B Preferred
Stock outstanding as of May 24, 1999, 28,125 shares of Series C Preferred
Stock outstanding as of May 24, 1999 and 1,273,149 shares of Series D
Preferred Stock outstanding as of June 3, 1999. The percentage ownership of
the Common Stock also treats as outstanding all shares of Common Stock
issuable upon exercise of options held by the particular beneficial owner
that are included in the first column.
(3) Includes 253,933 shares held by Aziz Valliani & Dilshad Valliani Trust as
to which Mr. Valliani claims voting and investment control and 169,166
shares subject to currently exercisable options or options exercisable
within 60 days of June 3, 1999.
(4) Includes 162,428 shares held by the D. and P. Licurse Trust, for the
benefit of Mr. Licurse's wife, and 56,964 shares subject to currently
exercisable options or options exercisable within 60 days of June 3, 1999.
Mr. Licurse disclaims beneficial ownership of the shares held by the trust
for the benefit of his wife.
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(5) Includes 167,938 shares held by the Llavanya X. Fernando Trust as to which
Mr. Fernando claims voting and investment control and 46,218 shares subject
to currently exercisable options or options exercisable within 60 days of
June 3, 1999.
(6) Includes 120,000 share held by Kwang-Wei Yao, 3,500 shares held by
Kwang-Wei Yao custody account for Lillian Rafii, 3500 shares held by
Kwang-Wei Yao in custody account for Ilene Rafii as to which Mr. Rafii
claims voting and investment control and 40,988 shares subject to currently
exercisable options or options exercisable within 60 days of June 3, 1999.
(7) Includes 15,000 shares subject to currently exercisable options or options
exercisable within 60 days June 3, 1999.
(8) Includes 41,145 shares subject to currently exercisable options or options
exercisable within 60 days June 3, 1999.
(9) Includes 2,500 shares subject to currently exercisable options or options
exercisable within 60 days of June 3, 1999.
(10) Includes 24,500 shares subject to currently exercisable options or options
exercisable within 60 days of June 3, 1999.
(11) Includes all shares described in notes (3)-(6) and notes (7)-(10) above.
BY ORDER OF THE BOARD OF DIRECTORS
[June 3, 1999]
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