<PAGE>
INFORMATION IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than 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 information.
[_] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
RACOM SYSTEMS, 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):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, $.01 par value
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
19,987,230 shares of common stock
- --------------------------------------------------------------------------------
(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):
- --------------------------------------------------------------------------------
(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 identify the filing for which the offsetting was paid previously.
Identify filing by registration statement number, or the form or schedule and
the date of its filing:
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
Racom Systems, Inc.
- --------------------------------------------------------------------------------
(4) Date Filed:
June 17, 1999
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<PAGE>
RACOM SYSTEMS, INC.
P.O. Box 3224
Boulder, Colorado 80307
July 1, 1999
Dear Stockholders of Racom Systems, Inc.:
You are invited to attend a Special Meeting of the Stockholders of Racom
Systems, Inc. (the "Company") to be held at the Law Offices of Gary A. Agron,
5445 DTC Parkway, Suite 520, Englewood, Colorado 80111, the Company's counsel,
at 9:30 A.M. local time, July 12, 1999, or at any adjournment or postponement
thereof (the "Special Meeting").
At the Special Meeting, you will be asked to consider and vote upon an
amendment to the Company's Certificate of Incorporation to effect a reverse
stock split of the Company's common stock, par value $0.01 (the "Common Stock")
on the basis of one share for each fifteen shares outstanding (the "Reverse
Split") in order to reduce the number of outstanding shares of Common Stock,
from 19,987,230 to approximately 1,332,482 and to consider and vote upon any and
all other business that may properly come before the Special Meeting. Details
relating to this matter including potential reasons for the Reverse Split are
set forth in the attached Proxy Statement. Please review and consider the
enclosed materials carefully. All stockholders of record of the Company as of
the close of business on June 17, 1999 will be entitled to notice of and to vote
at the Special Meeting or at any adjournment or postponement thereof.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE REVERSE SPLIT. THE
BOARD OF DIRECTORS OF THE COMPANY BELIEVES THAT THE PROPOSED REVERSE SPLIT IS IN
THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND UNANIMOUSLY
RECOMMENDS THAT YOU VOTE FOR ITS APPROVAL.
Regardless of the number of shares you hold or whether you plan to attend
the Special Meeting, we urge you to complete, sign, date and return the enclosed
proxy card immediately. If you attend the Special Meeting, you may vote in
person if you wish, even if you have previously returned your proxy card.
Sincerely,
Arthur B. Rancis
President
1
<PAGE>
RACOM SYSTEMS, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 12, 1999
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the "Special
Meeting") of Racom Systems, Inc. (the "Company") will be held at the Law Offices
of Gary A. Agron, 5445 DTC Parkway, Suite 520, Englewood, Colorado 80111, the
Company's counsel, at 9:30 A.M. local time, July 12, 1999, or at any adjournment
or postponement thereof, for the following purposes:
1. To approve an amendment to the Company's Certificate of Incorporation
to effect the Reverse Split;
2. To consider and vote upon any and all other business that may properly
come before the Special Meeting of Stockholders.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
ONLY STOCKHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON JUNE 17, 1999 ARE
ENTITLED TO NOTICE OF AND TO VOTE AT THE SPECIAL MEETING OF STOCKHOLDERS AND AT
ANY ADJOURNMENTS THEREOF.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED PROXY IMMEDIATELY TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE
SPECIAL MEETING OF STOCKHOLDERS WHETHER OR NOT YOU INTEND TO ATTEND THE MEETING.
Dated: July 1, 1999
BY ORDER OF THE BOARD OF DIRECTORS
Arthur B. Rancis
President
1
<PAGE>
RACOM SYSTEMS, INC.
P.O. Box 3224
Boulder, Colorado 80307
Telephone: (303) 517-5569
PROXY STATEMENT
This proxy statement (this "Proxy Statement") is furnished in connection
with the solicitation of proxies by the Board of Directors of Racom Systems,
Inc. (the "Company"), a Delaware corporation, of holders of $0.01 par value
Common Stock ("Common Stock") to be voted at a special meeting of stockholders
of the Company (the "Special Meeting") to be held at the Law Offices of Gary A.
Agron, 5445 DTC Parkway, Suite 520, Englewood, Colorado 80111, the Company's
counsel, at 9:30 A.M. on July 12, 1999 or at any adjournment or postponement
thereof. At the Special Meeting of the holders of Common Stock will be asked to
consider and vote upon an amendment to the Company's Certificate of
Incorporation to effect a reverse stock split of the Company's common stock, par
value $.01 (the "Common Stock") on the basis of one share for each fifteen
shares outstanding (the "Reverse Split") in order to reduce the number of
outstanding shares of Common Stock, from 19,987,230, to approximately 1,332,482
and to consider and vote upon any and all other business that may properly come
before the Special Meeting. Reasons for the Reverse Split, including potential
mergers and acquisitions are discussed in the body of this Proxy Statement.
Management knows of no other matter to be brought before the Special
Meeting of Stockholders not referred to in this Proxy Statement; if, however,
other matters properly come before the Special Meeting of Stockholders, a Proxy
will be voted in accordance with the judgment of the person voting such Proxy,
unless the Proxy card indicates otherwise.
This Proxy Statement and the accompanying form of proxy is being first
mailed or given to all stockholders of the Company on or about July 2, 1999.
The shares represented by all proxies that are properly executed and submitted
will be voted at the meeting in accordance with the instructions indicated
thereon. Unless otherwise directed, votes will be cast for the proposals set
forth herein.
All Proxies received pursuant to this solicitation will be voted at the
Special Meeting of Stockholders and at any adjournments thereof as indicated in
the accompanying Proxy card. If the Proxy is properly executed and returned, the
shares it represents will be voted at the Special Meeting of Stockholders in
accordance with the instructions noted thereon. If no instructions are given,
the Proxy will be voted FOR all of the proposals presented. Any stockholder
executing the attached Proxy card may revoke it at any time before it is voted:
(a) by submitting a duly executed Proxy bearing a later date; (b) by giving
written notice of revocation to the Secretary of the Company; or (c) by
attending the Special Meeting of Stockholders and orally withdrawing the Proxy.
1
<PAGE>
VOTING SHARES AND PRINCIPAL STOCKHOLDERS
The close of business of June 17, 1999, has been fixed by the Board of
Directors of the Company as the record date (the "Record Date") for the
determination of stockholders entitled to notice of and to vote at the Special
Meeting. The voting securities of the Company consist of 40,000,000 authorized
shares of Common Stock, of which 19,987,230 were issued and outstanding at the
closed of business on the Record Date and approximately 1,332,482 will be
outstanding after the Reverse Split. Each share of Common Stock held as of the
Record Date will entitle the holder thereof to one vote on each matter that may
come before the Special Meeting.
A majority of the issued and outstanding shares entitled to vote,
represented in person or by proxy, constitutes a quorum at any stockholders'
meeting, including at the Special Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning the holdings of
Common Stock (i) by each person who, as of June 17, 1999, holds of record or is
known by the Company to hold beneficially or of record, more than 5% of the
Company's Common Stock, and (ii) by each director, and by all directors and
executive officers as a group who hold Common Stock. All shares are owned
beneficially and of record.
<TABLE>
<CAPTION>
NAME BENEFICIALLY OWNED /(1)/ PERCENT OF CLASS
<S> <C> <C>
GEM Singapore Pte Ltd. 8,500,000 42.53%
c/o Loughran & Co.
38 Hertford Street
London W1Y 7TG
England
Turbo International Ltd. 8,500,000 42.53%
Shirley House
50 Shirley Street
P. O. Box N-7755
Nassau, Bahamas
Intag International Limited /(2)/ 1,264,178 6.32%
52 Phillip Street
Sydney NSW Australia
Ramtron International Corporation /(3)/ 1,122,546 5.6%
1850 Ramtron Drive
Colorado Springs, Colorado
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
John A. Hinds /(4)/ 32,593 (6)
61818 Red Meadow Court
Bend, Oregon 97702
Arthur B. Rancis/(5)/ 133,333 (6)
P. O. Box 3224
Boulder, Colorado 80307
Christopher F. Brown -- (6)
712 Fifth Avenue, 7th Floor
New York, New York 10019
Edward J. Tobin -- (6)
712 Fifth Avenue, 7th Floor
New York, New York 10019
Thomas Tuttle -- (6)
712 Fifth Avenue, 7th Floor
New York, New York 10019
All officers and directors as a group (5 persons) 165,926
</TABLE>
- -----------------------
(1) Beneficial ownership as reported in the table has been determined in
accordance with applicable federal regulations and includes (a) shares of
the Company's Common Stock as to which a person possess sole or shared
voting and/or investment power and (b) shares of the Company's Common
Stock which may be acquired within sixty days upon the exercise of
outstanding stock options and warrants.
(2) Includes 71,504 Common Stock purchase warrants.
(3) Includes 55,878 Common Stock purchase warrants.
(4) Includes 2,223 shares and options to purchase 30,371 shares of Common
Stock.
(5) Includes options to purchase 133,333 shares of Common Stock.
(6) Less than 1% of class.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROXY STATEMENT AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. NO STATEMENT OF FACT HEREIN SHALL BE DEEMED TO
CREATE ANY IMPLICATION THAT SUCH FACTS HAVE NOT CHANGED SINCE THE DATE HEREOF.
The Date of this Proxy Statement is July 1, 1999
3
<PAGE>
ACTION TO BE TAKEN AT THE MEETING
PROPOSAL 1
REVERSE STOCK SPLIT
The Company's Board of Directors on May 17, 1999, approved an amendment to
the Company's Certificate of Incorporation to authorize a reverse stock split of
the Company's Common Stock on the basis of one share for each fifteen shares
outstanding while maintaining 40,000,000 shares of $.01 par value Common Stock
authorized for issuance. Fractional shares resulting from the Reverse Split will
be rounded up to the next whole share. In addition, the Company's option plans
and outstanding Warrants to purchase Common Stock provide for the adjustment of
the number of shares into which each outstanding option is exercisable to
reflect the Reverse Split.
Based upon the number of shares of Common Stock outstanding on the Record
Date, upon the effectiveness of the Reverse Split, the total number of
outstanding shares of Common Stock would be reduced to approximately 1,332,482.
The full text of the proposed amendment to the Company's Certificate of
Incorporation with respect to this Proposal is set forth in Appendix A to this
Proxy Statement and the following description is qualified in its entirety by
reference thereto. Pursuant to the Reverse Split, each fifteen outstanding
shares of Common Stock will be automatically converted into one share of Common
Stock. In the event that, as a result of the Reverse Split, a stockholder would
own a fractional share, the Company will issue to such Stockholder an additional
full share of Common Stock in lieu thereof. The Reverse Split will not change
the total number of authorized shares or the par value of the Common Stock. The
Company currently has 19,987,230 shares of Common Stock issued and outstanding.
After giving effect to the Reverse Split, the Company will have approximately
1,332,482 shares of Common Stock issued and outstanding. As a result of the
Reverse Split, the number of authorized shares of Common Stock available for
future issuance will increase from 20,012,770 to approximately 38,667,518.
Reasons for the Reverse Split
The reason for the Reverse Split is to increase the number of authorized
shares available for future issuances pursuant to (a) mergers and acquisitions
of other businesses and technologies; (b) capital-raising transactions, such as
public offerings and private placements of the Company's securities stock option
and ownership plans and other compensation arrangements with management,
employees and outside consultants; and (c) stock option and ownership plans and
other compensation arrangements with management, employees and outside
consultants. Further the Reverse Split might help safeguard the Company's
tradability on the NASDAQ SmallCap Market(C).
4
<PAGE>
Potential Mergers and/or Acquisitions and other Fund-raising Transactions
The Company is desirous of increasing its asset and revenue base and
believes that it could do so through a merger with or acquisition of a company
with active operations.
On May 17, 1999, the Company's Board of Directors approved the Company's
entering into a letter of intent and a common stock purchase agreement with an
advisory firm. On June 4, 1999, the Company entered into the letter of intent
(the "Letter") with GEM Advisors, Inc., a registered broker-dealer and an
advisory firm ("GEM"). The Letter provides for the Company to enter into a
stock purchase agreement with GEM and contemplates GEM locating a merger or
acquisition target for the Company.
On June 8, 1999, the Company entered into a common stock purchase agreement
(the "Agreement") with GEM Singapore Pte Ltd. ("GEM Singapore") and Turbo
International Ltd. ("Turbo"), which provided for the sale of an aggregate of
17,000,000 shares of Common Stock to GEM Singapore and Turbo for a purchase
price of $170,000. The Agreement further provided that (i) four (4) of the six
(6) directors of the Company would resign, (ii) the size of the Board of
Directors would be reduced to five (5) members, and (ii) three (3) nominees of
GEM Singapore and Turbo would be appointed to the Board of Directors in order to
complete the remaining terms of the resigning directors. The three (3)
replacement directors are Christopher F. Brown, Thomas Tuttle and Edward J.
Tobin.
Christopher F. Brown, age 36, became a director of the Company on June 11,
1999, to fill a vacancy created by the resignation of three of the directors of
the Company. Mr. Brown is also the President of GEM North America Inc.
Previously he was with Drexel Burnham Lambert as an associate, Smith Barney as
an Investment Advisor from 1986 to 1988, and Shearson Lehman Brothers from 1988
to 1993. He subsequently founded and managed the Mergers and Acquisitions
department at Drake Capital Securities, Inc. From September 12, 1996 to April
1999, Mr. Brown served as a director of D-Vine, Ltd.
Edward Tobin, age 42, became a director of the Company on June 11, 1999, to
fill a vacancy created by the resignation of three of the directors of the
Company. Mr. Tobin is also Managing Director of GEM Ventures, Ltd. Prior to
joining GEM, Mr. Tobin was Managing Director of Lincklaen Partners, a private
venture capital group. From September 11, 1996 to April 1999, Mr. Tobin
served as Chairman of the Board of Directors and Chief Executive Officer of D-
Vine, Ltd. Mr. Tobin received his M.B.A. from the Wharton School, and a Master
of Science in Engineering and a Bachelor of Science in Economics from the
University of Pennsylvania.
Thomas Tuttle, age 32, became a director of the Company on June 11, 1999,
to fill a vacancy created by the resignation of three of the directors of the
Company. Mr. Tuttle is also a Managing Director of Global Emerging Markets
North America, Inc. Prior to this he was the Indonesian county manager for
Morgan Stanley where he was responsible for capital raising and advisory
services in that market. From September 12, 1996 to April 1999, Mr. Tuttle
served as a director of D-Vine, Ltd.
5
<PAGE>
The Letter further provides that GEM will seek an entity with an operating
business with which the Company could acquire or merge. It is contemplated that
if such an acquisition or merger were to occur, the Company would form a
subsidiary, and transfer and assign its current assets and liabilities to the
subsidiary but retain the newly acquired assets. Presently, GEM has been
investigating several private companies to introduce to the Company. No letter
of intent, acquisition, merger or reorganization agreement has been negotiated
or entered into.
The Board of Directors of the Company believes that a merger or acquisition
would benefit both the Company and the private company and have identified a
number of potential benefits of a possible merger or acquisition
(1) Increasing the asset and revenue base of the Company as well as provide
new opportunities for capital appreciation;
(2) Addressing its debt service needs with a new source of revenue
(3) Obtaining a business with operations and revenue to allow the Company
to again meet the listing requirement for the NASDAQ SmallCap Market(C);
(4) Allowing the private company to obtain a larger shareholder base and
establish a public trading market for its securities;
(5) Helping the private company gain the interest of investment bankers and
brokerage firms that only raise capital for public companies; and
(6) Enabling the private company to access public capital markets to raise
money for research and development efforts.
Since the Company does not know when or through what method it will be
reorganized, the Company is unable to discuss the material federal income tax
consequences of any corporate combination to its shareholders.
The Company would endeavor to have any corporate reorganization or
combination treated as a nontaxable reorganization within the meaning of Section
368(a)(1)(a) of the Code.
If the contemplated corporate combination is treated as a nontaxable
reorganization, then the following Federal income tax consequences may result:
(a) no gain or loss will be recognized by holders of the Company's Common
Stock upon the exchange of the outstanding shares of private company's Common
Stock;
(b) no gain or loss will be recognized by the private company's
shareholders upon the exchange of their shares of the private company common
stock for shares of Common Stock of the Company; and
6
<PAGE>
(c) the holding period of the private company's shareholders with respect
to the Shares of the Company's Common Stock received by them will not include
the holding period of such shareholders with respect to the shares of the
private company common stock surrendered in exchange therefor.
Further, since the Company does not know the type of method of corporate
reorganization or combination, the Company is unable at this time to discuss the
accounting statement of any contemplated transaction.
Ability to Meet and Maintain Smallcap Market Status
The Company's Common Stock was traded on the NASDAQ SmallCap Market(C)
from March of 1997 to April of 1999, when it was delisted for failing to meet
the maintenance requirements for a continued listing. One of the several
requirements of NASDAQ for a listing on the SmallCap Market(C) is maintaining
a market price of at least $1.00 per share. During the first quarter of 1999,
the Company's Common Stock traded below $1.00 per share. The Board of Directors
believes that there are other benefits to the Reverse Split. The Reverse Split
could increase the market price of the Company's Common Stock in order to meet
the minimum requirements for a listing of the Common Stock on the NASDAQ
SmallCap Market(C).
The Board of Directors believes that there are benefits to the Company and
its stockholders to obtain the listing of the Common Stock on the NASDAQ
SmallCap Market(C). By reducing the number of outstanding shares of Common
Stock through a Reverse Split, the trading price of the Common Stock may
increase, thereby enabling the Company to meet the $4.00 per share minimum price
required by NASDAQ for an initial listing. A higher share price may also make
the Common Stock more attractive to a broader group of investors. Stockholders
should note, however, that the Board of Directors cannot predict what effect, if
any, the Reverse Split will have on the market price of, or the market for, the
Common Stock.
Anti-Takeover Effect
Furthermore, because the Reverse Split will reduce only the number of
outstanding shares of Common Stock and not the number of shares authorized for
issuance, the reverse stock split will result in an increase in the available
number of shares of Common Stock authorized for issuance by the Board of
Directors. This increase in shares available for issuance could, in certain
instances, render more difficult or discourage an unwanted merger, tender offer
or proxy contest and thus potentially could have an "anti-takeover" effect,
especially if stock were issued in response to a potential takeover.
The Reverse Split may result in some stockholders owning "odd-lots" of less
than 100 shares of Common Stock. Brokerage commissions and other costs of
transactions in odd-lots are generally somewhat higher than the costs of
transactions in "round-lots" of even multiples of 100 shares. In addition,
there can be no assurance that the Reverse Split will increase or will not
adversely impact the market price of the Common Stock, that the marketability of
the Common Stock will improve as a result of the Reverse Split or that the
Reverse Split will otherwise have any of the effects described herein.
7
<PAGE>
The amendment effecting the Reverse Split as approved by the Board of
Directors provides that the Board may abandon the amendment at any time,
notwithstanding stockholder approval and without further action by the
stockholders. Therefore, it is possible that the Reverse Split may never be
effected even if it is approved by the stockholders.
If the Reverse Split is approved by the stockholders, it will become
effective automatically upon the filing of the required documents with the
Secretary of State of Delaware and, upon such filing, each share of Common Stock
will automatically be converted into the number of shares of Common Stock that
would give effect to the Reverse Split. The Company will notify current
stockholders of the filing of the applicable documents with the Secretary of
State of Delaware and will furnish stockholders of record as of the close of
business on such filing date with a letter of transmittal for use in exchanging
certificates. The Company's stockholders, promptly after the amendment to the
Certificate of Incorporation becomes effective, must mail their certificates
representing their Common Stock to American Securities Transfer and Trust, Inc.,
P. O. Box 1596, Denver, Colorado, the Company's Transfer Agent, if they wish to
obtain a new stock certificate giving effect to the Reverse Split.
The Company believes that: (i) the proposed Reverse Split will not be a
taxable transaction to the Company; (ii) the Company's stockholders will not
recognize any gain or loss as a result of the Reverse Split; (iii) the aggregate
tax basis of the Common Stock received by the stockholders pursuant to the
Reverse Split will equal the aggregate tax basis of the stockholders' Common
Stock prior to the Reverse Split; and (iv) the holding period of the Common
Stock received by the Company's stockholders will include the holding period of
the stockholders' Common Stock before the Reverse Split, provided the Common
Stock was a capital asset in the hands of such stockholder.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT THE
COMPANY'S STOCKHOLDERS APPROVE THIS AMENDMENT TO THE CERTIFICATE OF
INCORPORATION AUTHORIZING A ONE SHARE FOR FIFTEEN SHARES REVERSE SPLIT OF ALL
OUTSTANDING SHARES OF THE COMPANY'S COMMON STOCK
VOTE REQUIRED TO APPROVE PROPOSALS
A vote in favor by the holders of at least a majority of the outstanding
shares of Common Stock is required to approve Proposal No. 1. Abstentions are
counted toward the calculation of a quorum but are not treated as either a vote
for or against the relevant Proposal. An abstention has the same effect as a
vote against the relevant Proposal. Any unvoted position in a brokerage account
will be considered as not voted and will not be counted toward fulfillment of
quorum requirements but will have the same effect as a vote against each of the
Proposals. Stockholders have no right under Delaware law or under the Company's
Certificate of Incorporation or Bylaws to dissent from Proposal No. 1.
8
<PAGE>
STOCKHOLDER PROPOSALS
As previously disclosed to Stockholders in connection with the Company's
1999 Annual Meeting, Stockholders who wish to submit proposals for inclusion in
the Company's proxy statement and form of proxy relating to the 2000 Annual
Meeting of Stockholders must submit their proposals in writing to the Secretary
at the address set forth on the first page of this Proxy Statement. Proposals
must be received by the Secretary no later than December 31, 1999 for inclusion
in next year's proxy statement and proxy card. No stockholder proposals will be
accepted for the Special Meeting.
OTHER MATTERS
The Board of Directors does not intend to present for consideration at the
Special Meeting any business other than the matters referred to in the
accompanying Notice. In the event any other matter should properly come before
the Meeting, the person(s) appointed by the accompanying Proxy will vote on such
other matters in accordance with their best judgment pursuant to the
discretionary authority granted in the Proxy.
The solicitation of proxies by means of this Proxy Statement is being made
by the Company. All of the expenses involved in preparing, assembling and
mailing this Proxy Statement and the materials enclosed herewith and all costs
of soliciting proxies will be paid by the Company. In addition to the
solicitation by mail, proxies may be solicited by officers and regular employees
of the Company by telephone, telegraph or personal interview. Such persons will
receive no compensation for their services other than their regular salaries.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries to forward solicitation materials to the beneficial
owners of the shares held of record by such persons, and the Company may
reimburse such persons for reasonable out of pocket expenses incurred by them in
so doing. No director of the Company has informed the Company of such director's
intent to oppose the actions contemplated by this Proxy Statement.
The above notice and Proxy Statement are sent by order of the Board of
Directors.
Dated: July 1, 1999 Arthur B. Rancis
President
9
<PAGE>
APPENDIX A
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
OF
RACOM SYSTEMS, INC.
Racom Systems, Inc., a corporation duly organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify as follows:
1. The Certificate of Incorporation is hereby amended to effect a reverse
split of the outstanding shares of the Corporation's common stock, $0.01 par
value (the "Common Stock"). Effective on the filing of this Certificate of
Amendment of Certificate of Incorporation, each issued and outstanding share of
the Common Stock shall be automatically converted without further action into
0.06666 of a share of the Common Stock. All fractions of a share created by the
foregoing reverse split shall be automatically converted without further action
into a whole share of the Common Stock.
2. The amendment to the Certificate of Incorporation herein certified was
duly adopted by the Board of Directors and stockholders of the Corporation in
accordance with the provisions of Section 242 of the General Corporation Law of
the State of Delaware.
3. The Corporation has caused this Certificate of Amendment to be
executed by ______________, its authorized ___________________.
4. This Certificate of Amendment shall be effective as of the date of
filing with the Delaware Secretary of State.
Date: _______________, 1999.
__________________________
Name:
Title:
A-1
<PAGE>
PROXY
SOLICITED BY THE BOARD OF DIRECTORS OF
RACOM SYSTEMS, INC.
The undersigned hereby appoints John A. Hinds and Arthur B. Rancis, and
each of them, as the lawful agents and Proxy of the undersigned (with all the
powers the undersigned would possess if personally present, including full power
of substitution), and hereby authorizes each of them to represent and to vote,
as designated below, all the shares of Common Stock of Racom Systems, Inc. held
of record by the undersigned on June 17, 1999, at the Special Meeting of
stockholders to be held July 12, 1999, or any adjournment or postponement
thereof.
Any executed proxy which does not designate a vote for any item shall be
deemed to grant authority for any item not designated and will be voted "FOR"
---
any such item.
ALL SHARES WILL BE VOTED AS DIRECTED HEREIN AND, UNLESS OTHERWISE DIRECTED,
WILL BE VOTED "FOR" ALL ITEMS AND "FOR" THE ELECTION OF ALL NOMINEES TO THE
--- ---
BOARD OF DIRECTORS . YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO A VOTE
THEREON.
PLEASE MARK YOUR VOTES BY PLACING AN "X" IN THE APPROPRIATE BOX IN EACH ITEM.
-
1. To consider and vote upon the proposal to amend the Company's
Certificate of Incorporation to effect a fifteen-for-one reverse stock split
with respect to the Company's outstanding Common Stock;
FOR ___ AGAINST ___ ABSTAIN ___
2. To consider and vote upon any and all other business that may properly
come before the Special Meeting of Stockholders;
FOR ___ AGAINST ___ ABSTAIN ___
It is understood that when properly executed, this proxy will be voted in
the manner directed herein by the undersigned stockholder. WHERE NO CHOICE IS
SPECIFIED BY THE STOCKHOLDER, THE PROXY WILL BE VOTED FOR THE PROPOSALS SET
FORTH ABOVE.
The undersigned hereby revokes all previous proxies relating to the shares
covered hereby and confirms all that said Proxy may do by virtue hereof.
Please sign exactly as your name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give your
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full title as such. If a corporation please sign in full corporate name by the
President or other authorized officer. If a partnership, please sign in
partnership name by an authorized person.
NAME _____________________________________
SIGNATURE(S) _____________________________
_____________________________
DATE _____________________
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
PLEASE CHECK THIS BOX IF YOU INTEND TO BE PRESENT AT THE SPECIAL MEETING OF
STOCKHOLDERS. [_]
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