SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use
of the Commission Only (as permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
CZECH INDUSTRIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| | $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
|_| $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
|_| 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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5) Total fee paid:
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|X| 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.
<PAGE>
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>
CZECH INDUSTRIES, INC.
August 26, 1996
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders of Czech
Industries, Inc. The meeting will be held at 10 a.m. (local time) on Tuesday,
September 10, 1996 at the Company's offices in Rockville, Maryland.
Please note that attendance at the Special Meeting will be limited to
stockholders as of the record date (or their authorized representatives) and to
guests of the Company. If your shares are registered in your name and you plan
to attend the Special Meeting, please mark the appropriate box on the enclosed
proxy card and you will be registered for the meeting. Stockholders who are not
pre-registered will only be admitted to the Special Meeting upon verification of
stock ownership.
Please give these proxy materials your careful attention. It is important that
your shares be represented and voted at the Special Meeting regardless of the
size of your holdings. Accordingly, whether or not you plan to attend the
Special Meeting, please complete, sign, date and return the accompanying proxy
card in the enclosed envelope in order to make certain that your shares will be
represented at the Special Meeting.
Sincerely,
Martin A. Sumichrast
Executive Vice President,
Chief Financial Officer
and Secretary
<PAGE>
CZECH INDUSTRIES, INC.
Notice of Special Meeting of Stockholders
September 10, 1996
Dear Stockholders:
A Special Meeting of Stockholders of Czech Industries, Inc., a Delaware
corporation (the "Company"), will be held at 15245 Shady Grove Road, Suite 340,
Rockville, Maryland 20850, at 10 a.m., local time, on Tuesday, September 10,
1996 for the following purposes:
1. To approve an amendment to the Company's Certificate of Incorporation
to effect a one-for-five reverse split of the Company's Common Stock
and to reduce the number of authorized and issued and outstanding
shares of Common Stock; and
2. To transact such other business as may be properly brought before the
meeting and any adjournments or postponements thereof.
Only holders of record of the Company's Common Stock as of the close of business
on August 19, 1996 are entitled to notice of and to vote at the Special Meeting
and any adjournments or postponements thereof. A list of such stockholders may
be examined for any purpose germane to the meeting at the Company's Rockville
offices during the ten-day period preceding the meeting.
Martin A. Sumichrast
Executive Vice President,
Chief Financial Officer
and Secretary
Rockville, Maryland
August 26, 1996
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YOUR VOTE IS IMPORTANT, ACCORDINGLY, YOU ARE URGED TO
COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY
CARD WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
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<PAGE>
CZECH INDUSTRIES, INC.
15245 Shady Grove Road, Suite 340
Rockville, Maryland 20850
PROXY STATEMENT
This Proxy Statement and enclosed form of proxy are being furnished commencing
on or about August 27, 1996 in connection with the solicitation by the Board of
Directors of Czech Industries, Inc., a Delaware corporation (the "Company"), of
proxies in the enclosed form for use at the Special Meeting of Stockholders to
be held on September 10, 1996 for the purposes set forth in the accompanying
Notice of Special Meeting of Stockholders. Any proxy given pursuant to such
solicitation and received in time for the meeting will be voted as specified in
such proxy. If no instructions are given, proxies will be voted FOR the
amendment to the Certificate of Incorporation, and in the discretion of the
proxies named on the proxy card with respect to any other matters properly
brought before the meeting and any adjournments thereof. Any proxy may be
revoked by written notice received by the Secretary of the Company at any time
prior to the voting thereof, by submitting a subsequent proxy or by attending
the meeting and voting in person.
Only holders of record of the Company's voting securities as of the close of
business on August 19, 1996 are entitled to notice of and to vote at the special
meeting and any adjournments or postponements thereof. As of the record date,
the following shares of voting securities were outstanding: 14,355,000 shares of
Common Stock, par value $.01 per share ("Common Stock").
Each share of Common Stock entitles the record date holder thereof to one vote
on the proposal to amend the Certificate of Incorporation, as well as on all
other matters properly brought before the meeting.
The presence of a majority of the outstanding shares of Common Stock,
represented in person or by proxy at the meeting, will constitute a quorum.
Shares represented by proxies that are marked "abstain" will be counted as
shares present for purposes of determining the presence of a quorum on all
matters. Proxies relating to "street name" shares that are voted by brokers on
some but not all of the matters will be treated as shares entitled to vote at
the special meeting on those matters as to which authority to vote is withheld
by the broker ("broker non-votes"). The proposed amendment to the Company's
Certificate of Incorporation will require the affirmative vote of a majority of
the issued outstanding Common Stock; accordingly, with respect to the proposed
amendment, abstentions and broker non-votes will have the same effect as
negative votes.
A proxy card is enclosed for your use. YOU ARE SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS TO COMPLETE, SIGN, DATE, AND RETURN THE PROXY CARD IN THE
ACCOMPANYING ENVELOPE, which is postage-paid if mailed in the United States.
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<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the Company's
Common Stock owned as of August 1, 1996 by (i) each person who is known by the
Company to own beneficially more than five percent of the Company's Common
Stock; (ii) each of the Company's officers and directors; and (iii) all officers
and directors as a group. The following calculations were based upon there being
14,355,000 shares of the Company's Common Stock issued and outstanding as of
August 1, 1996. Except as otherwise noted, the persons named in the table below
do not own any other capital stock of the Company and have sole voting and
investment power with respect to all shares as beneficially owned by them.
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS (1) POSITION WITH COMPANY NUMBER OF SHARES SHARES
- -------------------- --------------------- ---------------- -----------
<S> <C> <C>
Michael Sumichrast, Ph.D.(2) Chairman of the Board 53,500 *
August A. de Roode(3) Chief Executive Officer, 1,057,500 7.37
Director
Peter Schmid (4) President, Director 2,094,125 14.59
Wolfgang Koessner(4) Executive Vice President, 2,256,625 15.72
Director
Martin A. Sumichrast (2) Executive Vice President, 328,500 2.29
Chief Financial Officer,
Secretary, Director
Miloslav Chrobok, JUDr. Vice President __ __
Petr Bednarik, Ing. (5) Director 600,000 4.18
Randall F. Greene Director 94,100 *
Kaerntner Landes Shareholder 2,085,875 14.53
und Hypothekenbank AG
All Officers and Directors as 4,390,225 30.58
a Group (8 persons)
</TABLE>
* Less than 1%
(1) c/o Czech Industries, 15245 Shady Grove Road, Suite 340, Rockville, Maryland
20850.
(2) 382,000 shares owned by Sumichrast Enterprises, Inc., a corporation of which
Martin A. Sumichrast, Dr. Sumichrast's son, is an officer and director and
the owner. Dr. Sumichrast may be deemed to have voting and investment power
with respect to 53,500 of these 382,000 shares. Sumichrast Enterprises, Inc.
also owns 5,000 Class A Warrants, each representing the right to acquire one
share at a purchase price of $4.00.
(3) Includes 700,000 shares owned directly by Mr. de Roode and 357,500 shares
owned indirectly through VCH Vermoegensverwaltung and Holding Ges.m.b.H.
which is controlled by Mr. de Roode.
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<PAGE>
(4) 1,094,125 shares are owned indirectly through KHS Beteiligungs AG ("KHS")
which is jointly controlled by Mr. Schmid and Mr. Koessner and 1,000,000
shares are owned by Kaerntner Landes und Hypothekenbank AG (the "Bank") as
nominee for KHS. Messrs. Schmid and Koessner may be deemed to share voting
and investment power with respect to these shares. In the case of Mr.
Koessner, also includes 162,500 shares held by the Bank as nominee for
Central and Eastern European Fund ("Fund"), of which Mr. Koessner is a
director. The inclusion of such Fund shares shall not be construed as an
admission that Mr. Koessner is the beneficial owner of such shares.
(5) Petr Bednarik, Ing. is an officer, director and owner of Stratego a.s., a
Prague based investment company, which is the record owner of the shares of
Common Stock indicated. Mr. Bednarik may be deemed to be the beneficial
owner of such shares.
EASTBROKERS TRANSACTION
On August 1, 1996, the Company acquired 80% of the capital stock of
Eastbrokers Beteiligungs AG ("Eastbrokers"), a Vienna, Austria based investment
banking and brokerage firm. The consideration for this acquisition was 5.4
million newly issued shares of the Company's Common Stock, which represents
approximately 37.6% of the outstanding Common Stock following the acquisition.
This consideration is subject to adjustment conditional upon satisfaction of
certain financial targets.
In connection with the foregoing transaction, the Board of Directors was
reduced from nine directors to eight with one seat remaining temporarily vacant.
Dr. Michael Sumichrast, Martin A. Sumichrast, Petr Bednarik, Randall F. Greene
and Peter Schmid are continuing as directors of the Company and August A. de
Roode and Wolfgang Koessner have joined the Board. Mr. Schmid was also a founder
and one of the three principal stockholders of Eastbrokers and is President of
WMP Boersenmakler AG, a subsidiary of Eastbrokers. Messrs. de Roode, Schmid and
Koessner have the right to designate the individual to fill the vacant seat on
the Board. At the time of the acquisition, Mr. de Roode became Chief Executive
Officer of the Company, Mr. Schmid became President and Mr. Koessner became an
Executive Vice President.
Also in connection with the acquisition, the Company's By-laws were amended
so as to provide modified quorum requirements for Board meetings and increased
voting requirements for certain material transactions in an effort to have Board
decisions reflect a greater consensus of the directors than might have occurred
under the existing By-law provisions.
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO
EFFECT A ONE-FOR-FIVE REVERSE SPLIT OF THE COMPANY'S COMMON STOCK
AND TO REDUCE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has proposed an amendment to Article FOURTH of the
Company's Certificate of Incorporation that would effect a reverse split of the
Company's Common Stock on the basis of one new share of Common Stock for each
five shares of presently outstanding Common Stock and reduce the authorized
number of Common Stock from 50,000,000 shares to 10,000,000 shares. As of August
1, 1996, 14,355,000 shares of Common Stock were issued and outstanding, no
shares were held in treasury and 35,645,000 shares were unissued. As of August
1, 1996, there were 8,495,000 shares of Common Stock reserved for issuance upon
the exercise of outstanding options or warrants.
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<PAGE>
REASONS FOR THE PROPOSED REVERSE STOCK SPLIT
The Company has been advised by The Nasdaq Stock Market, Inc. ("Nasdaq") that in
Nasdaq's view, the Company's recently announced acquisition of Eastbrokers has
resulted in a change in control of the Company. Based upon this, Nasdaq has
indicated that in order to maintain its listing, the Company must meet all of
the criteria for initial listing on the Nasdaq SmallCap Market. The Company
believes that the acquisition of Eastbrokers does not trigger the need to meet
initial listing requirements and has requested a hearing before the Nasdaq
Listing Qualifications Committee (the "Committee"). The Company believes that it
currently meets all of the initial listing criteria with the exception of the
$3.00 bid price. On August 23, 1996, the last reported bid and asked prices for
the Common Stock were $1.50 and $1.625, respectively.
Since there can be no assurance that the Committee will render a favorable
decision with respect to the Company's application, the Board of Directors has
determined that it is in the best interests of the Company and its stockholders
to effect a one-for-five reverse stock split in an effort to meet the $3.00 bid
price which is required under Nasdaq's initial listing criteria relating to the
SmallCap Market. There can be no assurance, however, that the price of the
Common Stock after the reverse split will actually increase in an amount
proportionate to the decrease in the number of outstanding shares.
In addition, the Board of Directors believes that the present level of per share
market prices of the Common Stock impairs the acceptability of the stock by
portions of the financial community and the investing public. Theoretically, the
number of shares outstanding should not, by itself, affect the marketability of
the stock, the type of investor who acquires it or a company's reputation in the
financial community, but in practice this is not necessarily the case, as many
investors look upon low priced stock as unduly speculative in nature and, as a
matter of policy, avoid investment in such stocks. The Board of Directors also
believes that the current per share price of the Common Stock has reduced the
effective marketability of the shares because of the reluctance of many leading
brokerage firms to recommend low priced stock to their clients. Further, various
brokerage house policies and practices tend to discourage individual brokers
from dealing in low priced stocks. Some of those policies and practices pertain
to the payment of brokers' commissions and to time-consuming procedures which
function to make the handling of low priced stocks unattractive to brokers from
an economic standpoint. In addition, the structure of trading commissions also
tends to have an adverse impact upon holders of low priced stock because the
brokerage commission on a sale of low priced stock generally represents a higher
percentage of the sales price than the commission on higher priced issues.
Another purpose of the proposed amendment is to reduce the number of shares of
Common Stock outstanding. The Board of Directors believes that the total number
of shares currently outstanding is disproportionately large relative to the
Company's present market capitalization. Moreover, when such a large number of
shares is outstanding, earnings per share is only affected by a significant
change in net earnings. If a smaller number of shares were outstanding, the
Company's financial results would be better reflected in the Company's earnings
per share.
Although there can be no assurance that the price of the Common Stock after the
reverse split will actually increase in an amount proportionate to the decrease
in the number of outstanding shares, the proposed reverse stock split is
intended to result in a price level for the Common Stock that will enable the
Company to maintain its Nasdaq SmallCap Market listing, increase investor
interest and reduce resistance of brokerage firms to recommend the Common Stock.
-4-
<PAGE>
PRINCIPAL EFFECTS
The principal effects of the proposed reverse stock split would be the
following:
Based upon 14,355,000 shares of Common Stock outstanding on August 1, 1996, the
proposed one-for-five reverse stock split would decrease the outstanding shares
of Common Stock by approximately 80%, and thereafter approximately 2,871,000
shares of Common Stock would be outstanding, held by approximately 100
stockholders of record. The proposed reverse split would not affect the
proportionate equity interest in the Company of any holder of Common Stock,
except as may result from the provisions for the elimination of fractional
shares as described below. The proposed reverse stock split will not affect the
registration of the Common Stock under the Securities Exchange Act of 1934.
The reverse split may leave certain stockholders with one or more "odd lots" of
the Company's Common Stock, i.e., stock in amounts of less than 100 shares.
These shares may be more difficult to sell, or require a greater commission per
share to sell, than shares in even multiples of 100.
As of August 1, 1996, there were outstanding options and warrants to purchase
shares relating to an aggregate of 8,495,000 shares of Common Stock. All of the
outstanding options and warrants include provisions for adjustments in the
number of shares covered thereby, and the exercise price thereof, in the event
of a reverse stock split by appropriate action of the Board of Directors. If the
proposed one-for-five reverse split is approved and effected, there would be
reserved for issuance upon exercise of all outstanding options and warrants a
total of 1,699,000 shares of Common Stock. Each of the outstanding options would
thereafter evidence the right to purchase 20% of the shares of Common Stock
previously covered thereby and the exercise price per share would be five times
the previous exercise price.
In addition, by reason of the amendment to the Certificate of Incorporation, the
par value of the common stock will be reduced from $.01 to $.002.
The following table illustrates the principal effects of the proposed reverse
stock split discussed in the preceding paragraphs:
PRIOR TO REVERSE AFTER REVERSE
NUMBER OF SHARES SPLIT AND AMENDMENT SPLIT AND AMENDMENT
OF COMMON STOCK TO CERTIFICATE TO CERTIFICATE
--------------- -------------- --------------
Authorized............................. 50,000,000 10,000,000
Outstanding............................ 14,355,000 2,871,000
Reserved for future
issuance upon exercise
of options and warrants.............. 8,495,000 1,699,000
Available for future issuance
by action of the Board of
Directors (after giving effect
to the above reservations)........... 27,150,000 5,430,000
Assuming the proposed amendment to the first clause of Article FOURTH of the
Certificate effecting the reverse stock split and reducing the number of
authorized and issued and outstanding shares of Common Stock is approved, a
Certificate of Amendment amending the
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<PAGE>
Certificate as set forth in Exhibit A to this Proxy Statement will be filed with
the Secretary of State of the State of Delaware (the "Delaware Secretary of
State") as promptly as practicable thereafter. The amendment and the proposed
reverse stock split would become effective upon the date of filing (the
"Effective Date").
EXCHANGE OF STOCK CERTIFICATES AND ELIMINATION OF FRACTIONAL SHARE INTERESTS
As soon as possible after the Effective Date, holders of Common Stock will be
notified and requested to surrender their present Common Stock certificates for
new certificates representing the number of whole shares of Common Stock after
the reverse split. Until so surrendered, each current certificate representing
shares of Common Stock will be deemed for all corporate purposes after the
Effective Date to evidence ownership of Common Stock in the appropriately
reduced whole number of shares. American Stock Transfer & Trust Company will be
appointed exchange agent (the "Exchange Agent") to act for stockholders in
effecting the exchange of their certificates.
No scrip or fractional share certificates for Common Stock will be issued in
connection with the reverse split, but in lieu thereof, a certificate or
certificates evidencing the aggregate of all fractional shares otherwise
issuable (rounded, if necessary, to the next highest whole share) shall be
issued to the Exchange Agent or its nominee, as agent for the accounts of all
holders of Common Stock otherwise entitled to have a fraction of a share issued
to them in connection with the reverse split. Sales of fractional interests will
be effected by the Exchange Agent as soon as practicable on the basis of
prevailing market prices of the Common Stock on the Nasdaq SmallCap Market or
other available market at the time of sale. After the Effective Date, the
Exchange Agent will pay to such stockholders their pro rata share of the net
proceeds derived from the sale of their fractional interests upon surrender of
their stock certificates. No service charges or brokerage commissions will be
payable by stockholders in connection with the sale of fractional interests, all
of which costs will be borne by the Company.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain federal income tax consequences
of the proposed reverse split of the Company's Common Stock. This discussion
does not purport to deal with all aspects of federal income taxation that may be
relevant to holders of Common Stock and is not intended to be applicable to all
categories of investors, some of which, such as dealers in securities, banks,
insurance companies, tax-exempt and foreign persons, may be subject to special
rules. Furthermore, the following discussion is based on current provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), and administrative
and judicial interpretations as of the date hereof, all of which are subject to
change. Holders of Common Stock are advised to consult their own tax advisors
regarding the federal, state, local and foreign tax consequences of the proposed
reverse stock split.
The proposed reverse stock split will be a tax-free recapitalization for the
Company and its stockholders.
The new shares of Common Stock in the hands of a stockholder will have an
aggregate basis for computing gain or loss equal to the aggregate basis of
Common Stock held by that stockholder immediately prior to the proposed reverse
stock split reduced by the amount of proceeds, if any, received from the sale of
fractional interests and increased by any gain recognized on that sale or
decreased by any loss recognized on that sale.
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<PAGE>
A stockholder's holding period for the new shares of Common Stock will be the
same as the holding period for the shares of Common Stock exchanged therefor.
Stockholders who receive cash for all of their holdings (as a result of owning
fewer than five shares) will recognize a gain or loss for federal income tax
purposes as a result of the disposition of their shares of Common Stock.
Although the tax consequences to stockholders who receive cash for some of their
holdings are not entirely certain, those stockholders in all likelihood will
recognize a gain or loss for federal income tax purposes as a result of the
disposition of a portion of their shares of Common Stock. Stockholders who do
not receive any cash for their holdings will not recognize any gain or loss for
federal income tax purposes as a result of the proposed reverse stock split.
VOTE REQUIRED
The proposed amendment would effect both a reverse stock split and a reduction
in the number of authorized and issued and outstanding shares of Common Stock.
Approval of the reverse stock split requires the affirmative vote of a majority
of all of the issued and outstanding shares of Common Stock.
The foregoing summary of the amendment is qualified in its entirety by reference
to the complete text of the proposed revised first clause of Article FOURTH of
the Certificate of Incorporation, which is set forth as Exhibit A to this Proxy
Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING RESOLUTION WHICH
WILL BE PRESENTED AT THE MEETING.
"RESOLVED, that the amendment modifying the first clause of Article FOURTH of
the Company's Certificate of Incorporation to conform to Exhibit A of the Proxy
Statement for this meeting is hereby adopted and approved in all respects."
The Board of Directors reserves the right to abandon the proposed amendment
without further action by the stockholders at any time prior to the filing of
the amendment with the Delaware Secretary of State notwithstanding authorization
of the proposed amendment by the stockholders.
1996 ANNUAL MEETING
The Company currently anticipates holding its 1996 annual meeting of
stockholders on or about November 12, 1996. Securityholders who wish to have
proposals presented at that meeting and to have such proposals included in the
proxy statement and proxy relating to that meeting should submit such proposals
so that they are received by the Company at its principal office no later than
September 12, 1996.
OTHER INFORMATION
Solicitation may be made personally, by telephone, by telegraph or by mail by
officers and employees of the Company and its subsidiaries who will not be
additionally compensated therefor. The Company will request persons such as
brokers, nominees and fiduciaries, holding stock in their names for others, or
holding stock for others who have the right to give voting instructions, to
forward proxy material to their principals and request authority for the
execution
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<PAGE>
of the proxy. The Company will reimburse such persons for their expenses in so
doing. The total cost of soliciting proxies will be borne by the Company.
The Board of Directors has no knowledge of any other matters to be presented at
the meeting other than those described herein. If any other matters should
properly come before the meeting, it is the intention of the persons designated
in the proxy to vote thereon according to their best judgment.
Stockholders are urged to forward their proxies without delay. A prompt response
will be greatly appreciated.
CZECH INDUSTRIES, INC.
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<PAGE>
EXHIBIT A
FIRST CLAUSE OF ARTICLE FOURTH
OF THE
CERTIFICATE OF INCORPORATION
OF
CZECH INDUSTRIES, INC.
(AS PROPOSED TO BE AMENDED)
The First Clause of Article FOURTH would be deleted in its entirety and the
following substituted therefor:
"1) The total number of shares of common stock which this corporation is
authorized to issue is 10,000,000 shares, par value $.002 each.
As of the effective time of this amendment to the Certificate of
Incorporation of the corporation, each five (5) issued and outstanding
shares of Common Stock of the corporation shall be combined into one (1)
share of validly issued, fully paid and nonassessable common stock of the
corporation. No scrip or fractional shares shall be issued by reason of
this amendment."
A-1
CZECH INDUSTRIES, INC.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Michael Sumichrast, August A. de Roode and
Martin A. Sumichrast as Proxies, each with the full power of substitution, and
hereby authorizes each of them, to represent and vote, as designated on the
reverse hereof, all shares of Common Stock of Czech Industries, Inc. (the
"Company") held of record by the undersigned on August 19, 1996, at the Special
Meeting of Stockholders to be held on September 10, 1996, or any adjournment
thereof, upon all such matters as may properly come before the Meeting.
(THE PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE.)
<PAGE>
|X|Please mark your votes as in this example.
If you plan to attend the Special Meeting, place an X in this box. |_|
1. Proposal No. 1: Approval of an amendment to Article FOURTH
of the Company's Certificate of Incorporation to effect a one-for-
five reverse split of the Company's Common Stock and to reduce
the number of authorized shares of Common Stock (The Board of
Directors recommends a vote "FOR" approval.)
FOR AGAINST ABSTAIN
|_| |_| |_|
2. In their discretion upon such other business as may
properly come before the Special Meeting or any postponement
or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF
DIRECTION, THIS PROXY WILL BE VOTED "FOR" ITEM 1.
STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN THIS
PROXY PROMPTLY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO
POSTAGE IF MAILED WITHIN THE UNITED STATES.
SIGNATURE: _________________________________________ DATE: ________________
SIGNATURE: _________________________________________ DATE: ________________
(SIGNATURE IF HELD JOINTLY)
NOTE: Please sign exactly as name or names appear on stock certificate
as indicated hereon. Joint owners should each sign. When
signing as attorney, executor, administrator or guardian, please
give full title as such.
