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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-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:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(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>
Preliminary Copy
RACOM SYSTEMS, INC.
6080 GREENWOOD PLAZA BLVD.
GREENWOOD VILLAGE, COLORADO 80111
PROXY STATEMENT AND
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 29, 1999
To the stockholders of Racom Systems, Inc.:
A Special Meeting of the stockholders of Racom Systems, Inc. (the
"Company") will be held at the Company's executive offices, 6080 Greenwood Plaza
Blvd., Greenwood Village, Colorado 80111, at 9:00 A.M. on January 29, 1999, or
at any adjournment or postponement thereof, for the following purposes:
1. To authorize the reverse split of the Company's Common Stock on the
basis of one share for each four and one-half shares outstanding; and
2. To amend the Company's Certificate of Incorporation to authorize up to
10,000,000 shares of Preferred Stock of the Company, par value $0.01 per
share, issuable in one or more series.
Details relating to the above matters are set forth in the attached Proxy
Statement. All stockholders of record of the Company as of the close of
business on January 7, 1999 will be entitled to notice of and to vote at the
Special Meeting or at any adjournment or postponement thereof.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. IF
YOU DO NOT PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE URGED TO SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY. A REPLY CARD IS ENCLOSED FOR YOUR
CONVENIENCE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON
IF YOU ATTEND THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
Margaret Von der Schmidt
Secretary
January 12, 1999
<PAGE>
PROXY STATEMENT
RACOM SYSTEMS, INC.
6080 GREENWOOD PLAZA BLVD.
GREENWOOD VILLAGE, COLORADO 80111
TELEPHONE: (303) 771-2077
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 29, 1999
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 $.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 offices
of the Company at the address listed above at 9:00 A.M. on January 29, 1999
or at any adjournment or postponement thereof. This Proxy Statement and the
accompanying form of proxy is being first mailed or given to all stockholders
of the Company on or about January 12, 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.
Any stockholder giving a proxy may revoke it at any time before it is
exercised by delivering written notice of such revocation to the Company, by
substituting a new proxy executed at a later date, or by requesting, in person,
at the Special Meeting, that the proxy be returned.
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.
VOTING SHARES AND PRINCIPAL STOCKHOLDERS
The close of business on January 7, 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. On the record date, there were outstanding 13,442,532 shares of Common
Stock, each share of which entitles the holder thereof to one vote on each
matter that may come before the Special Meeting.
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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 by each person who, as of December 22, 1998, holds of record or is
known by the Company to hold beneficially or of record, more than 5% of the
Company's Common Stock, by each director, and by all directors and executive
officers as a group. All shares are owned beneficially and of record.
<TABLE>
<CAPTION>
SHARES
NAME BENEFICIALLY OWNED (1) PERCENT OF CLASS
- ---- ---------------------- ----------------
<S> <C> <C>
Intag International Limited (2) 5,688,798 41.3%
52 Phillip Street
Sydney NSW Australia
Ramtron International Corporation (3) 5,051,452 36.9%
1850 Ramtron Drive
Colorado Springs, Colorado
John A. Hinds (4)* 146,667 1.1%
Mark R. Davison (5)* 45,000 0.3%
George J. Stathakis (6)* 100,000 0.7%
Chas Yap Hock Eng (7)* 25,000 0.2%
Roger Bertman (8)* 62,000 0.5%
Arthur B. Rancis* --- ---
Douglas Sheldon (9)* 35,000 0.3%
All officers and directors 413,667 2.9%
as a group (7 persons) (10)
</TABLE>
* The address of these persons is in care of the Company at 6080 Greenwood
Plaza Blvd., Greenwood Village, Colorado 80111.
- ----------
(1) Beneficial ownership as reported in the table has been determined in
accordance with applicable federal regulations and includes (a) shares of
Company Common Stock as to which a person possesses sole or shared voting
and/or investment power and (b) shares of Company Common Stock which may be
acquired within sixty days upon the exercise of outstanding stock options
and warrants.
(2) Includes 321,766 Common Stock purchase warrants.
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(3) Includes 251,452 Common Stock purchase warrants.
(4) Includes 10,000 shares and options to purchase 136,667 shares of Common
Stock.
(5) Comprises options to purchase 45,000 shares of Common Stock. Does not
include 5,372,532 shares or 321,766 Common Stock purchase warrants held by
Intag International Limited, a publicly-held Australian company for which
Mr. Davison serves as a director.
(6) Includes 5,000 shares and options to purchase 95,000 shares of Common
Stock. Does not include 4,800,000 shares or 251,452 Common Stock purchase
warrants held by Ramtron International Corporation, a publicly-held company
for which Mr. Stathakis serves as a director.
(7) Comprises 25,000 options to purchase shares of Common Stock.
(8) Includes 7,000 shares and 55,000 options to purchase shares of Common
Stock.
(9) Comprises 35,000 options to purchase shares of Common Stock.
(10) Includes 22,000 shares and options to purchase 391,667 shares of Common
Stock.
PROPOSAL NO. 1: TO REVERSE SPLIT THE COMMON STOCK
The Company's Board of Directors on December 28, 1998, approved an
amendment to the Company's Certificate of Incorporation to authorize a
reverse split of the Company's Common Stock on the basis of one share for
each four and one-half shares outstanding while maintaining 40,000,000 shares
of $.01 par value common stock authorized for issuance. Fractional shares
resulting from the reverse stock 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 stock
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
2,987,230. 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.
The immediate purpose of the proposed reverse stock split is to attempt to
increase the market price of the Company's Common Stock in order to meet the
minimum requirements for continued listing of the Common Stock on the NASDAQ
SmallCap Market.
The Company's Common Stock has been traded on the NASDAQ SmallCap Market
since March of 1997. One of the several requirements of NASDAQ for continued
listing on the SmallCap Market is maintaining a market price of at least $1.00
per share. In recent months, the Company's Common Stock has been trading at or
below this $1.00 per share minimum.
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The Board of Directors believes that there are benefits to the Company and
its stockholders to maintain the listing of the Common Stock on the NASDAQ
SmallCap Market. By reducing the number of outstanding shares of Common Stock
through a reverse stock split, the trading price of the Common Stock may
increase, thereby enabling the Company to continue to meet the $1.00 per share
minimum price required by NASDAQ. 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 stock split will have on the market price of, or the market for, the
Common Stock.
Furthermore, because the reverse stock 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 a 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. See the
discussion of the potential anti-takeover effect of having authorized but
unissued shares in connection with Proposal No. 2, below.
The reverse stock 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 stock 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 stock split or that the
reverse stock split will otherwise have any of the effects described herein.
The amendment effecting the reverse stock 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. If the proposal is approved by the stockholders, it is the
present intent of the Board of Directors not to implement the reverse stock
split by filing the amendment with the Delaware Secretary of State unless and
until the Board of Directors, in its sole discretion, believes that the
reverse stock split is desirable in order to attempt to maintain the listing
of the Common Stock on the NASDAQ SmallCap Market. Therefore, it is possible
that the reverse stock split may never be effected even if it is approved by
the stockholders. If the amendment to the Company's Certificate of
Incorporation is approved by the stockholders but has not been effected on or
before the record date for the 1999 Annual Meeting of stockholders, the
amendment will be deemed to have been abandoned by the Board of Directors.
Thereafter, the Board of Directors may seek stockholder approval of any new
proposal to implement a reverse split of the Common Stock.
If the reverse stock 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 stock 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
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effective, must mail their certificates representing their Common Stock to
American Securities Transfer and Trust Company, Denver, Colorado, the Company's
Transfer Agent, if they wish to obtain a new stock certificate giving effect to
the reverse stock split.
The Company believes that: (i) the proposed reverse stock 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 stock split; (iii) the
aggregate tax basis of the Common Stock received by the stockholders pursuant to
the reverse stock split will equal the aggregate tax basis of the stockholders'
Common Stock prior to the reverse stock 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 stock split,
provided the Common Stock was a capital asset in the hands of such stockholder.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS
APPROVE THIS AMENDMENT TO THE CERTIFICATE OF INCORPORATION AUTHORIZING A ONE
SHARE FOR FOUR AND ONE-HALF SHARES REVERSE STOCK SPLIT OF ALL OUTSTANDING
SHARES OF THE COMPANY'S COMMON STOCK.
PROPOSAL NO. 2: TO AMEND THE COMPANY'S
ARTICLES OF INCORPORATION TO AUTHORIZE THE ISSUANCE
OF SHARES OF PREFERRED STOCK ISSUABLE IN ONE OR MORE SERIES
On December 28, 1998, the Board of Directors unanimously approved a
proposal to amend the Company's Certificate of Incorporation to authorize the
issuance of up to 10,000,000 shares of Preferred Stock, par value $0.01 per
share. The full text of the proposed amendment to the Company's Certificate of
Incorporation with respect to this Proposal is set forth in Appendix B to this
Proxy Statement and the following description is qualified in its entirety by
reference thereto.
No preferred stock is presently authorized by the Company's Certificate of
Incorporation. The proposed amendment would authorize the Board of Directors,
without any further stockholder action (unless such action is required in a
specific case by applicable laws or regulations or by applicable rules of a
trading market or stock exchange), to issue from time to time shares of
Preferred Stock in one or more series, to determine the number of shares to be
included in any series and to fix the designation, voting power, other powers,
preferences and rights of the shares of each series and any qualifications,
limitations or restrictions of the series. The Preferred Stock to be authorized
is of the type commonly known as "blank-check" preferred stock.
The amendment would authorize the Board of Directors, from time to time, to
divide the Preferred Stock into series, to designate each series, and to
determine for each series its
5
<PAGE>
respective rights and preferences, including, without limitation, any of the
following: (i) the rate of dividends, and whether dividends were cumulative or
had a preference over the Common Stock in right of payment; (ii) the terms and
conditions upon which shares may be redeemed and the redemption price; (iii)
sinking fund provisions for the redemption of shares; (iv) the amount payable in
respect of each share upon a voluntary or involuntary liquidation of the
Company; (v) the terms and conditions upon which shares may be converted into
other securities of the Company, including Common Stock; (vi) limitations and
restrictions on payment of dividends or other distributions on, or redemptions
of, other classes of stock of the Company junior to such series, including the
Common Stock; (vii) conditions and restrictions on the creation of indebtedness
or the issuance of other senior classes of stock; and (viii) voting rights. Any
series of Preferred Stock could, as determined by the Board of Directors at the
time of issuance, rank, with respect to dividends, voting rights, redemption and
liquidation rights, senior to the Company's Common Stock.
In the Board of Directors' opinion, the primary reason for authorizing the
Preferred Stock is to provide flexibility for the Company's capital structure.
The Board of Directors believes that this flexibility is necessary to enable it
to tailor the specific terms of a series of Preferred Stock that may be issued
to meet market conditions and financing opportunities as they arise, without the
expense and delay that would be entailed in calling a stockholders meeting to
approve the specific terms of any series of Preferred Stock. The Board of
Directors previously, in December of 1996, approved the authorization of
Preferred Stock but the Company has not up until now taken the steps required
under the Certificate of Incorporation and applicable law to authorize such
Preferred Stock.
The Preferred Stock may be used by the Company for any proper corporate
purpose. Such purposes might include, without limitation, issuance in public or
private sales for cash as a means of obtaining additional capital for use in the
Company's business and operations. Other purposes could include issuances in
connection with the acquisition of other businesses or properties.
The Company currently needs to obtain outside financing to meet its cash
requirements. The Company is investigating different alternatives for raising
capital and also for the Company's future. The Company has hired two investment
banking firms to explore the possibility of obtaining additional equity or debt
financings or of engaging in a strategic combination or other transaction. The
Preferred Stock proposed to be authorized at the Special Meeting could be used
in connection with any resulting transactions. The Company currently has no
arrangements, agreements or understandings for the issuance of any Preferred
Stock. The Company is, however, in negotiations to raise $500,000 to $1,000,000
in additional capital, either as equity or debt, during the first quarter of
1999 and could, if this proposal is approved by the Company's stockholders,
issue Preferred Stock in connection with that financing. Preferred stock, if
issued in this proposed financing, would be sold for cash in an arm's length
transaction.
It is not possible to state the precise effects of the authorization of the
Preferred Stock upon the rights of the holders of the Company's Common Stock
until the Board of Directors
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<PAGE>
determines the respective preferences, limitations, and relative rights of
the holders of the class as a whole or of any series of the Preferred Stock.
Such effects might include: (a) reduction of the amount otherwise available
for the payment of dividends on Common Stock to the extent dividends are
payable on any issued Preferred Stock; (b) restrictions on dividends on the
Common Stock; (c) rights of any series or the class of Preferred Stock to
vote separately, or to vote with the Common Stock; (d) conversion of the
Preferred Stock into Common Stock at such prices as the Board determines,
which could include issuance at below the fair market value or original issue
price of the Common Stock, diluting the book value or per share value of the
outstanding Common Stock; and (e) the holders of Common Stock not being
entitled to shares in the Company's assets upon liquidation until
satisfaction of any liquidation preference granted to holders of the
Preferred Stock. Holders of the Company's Common Stock do not have
preemptive rights to purchase shares in future issuances.
In addition, the existence of unissued stock could, in certain
instances, render more difficult or discourage a merger, tender offer, or
proxy contest and thus potentially have an "anti-takeover" effect, especially
if stock were issued in response to a potential takeover. Issuances of
stock, including preferred stock with conversion rights, can and have been
implemented by some companies in a manner intended to make acquisition of the
companies more difficult or more costly. An issuance of stock could deter
the types of takeover transactions that may be proposed or could discourage
or limit the stockholders' participation in certain types of transactions
that might be proposed (such as a tender offer), whether or not such
transactions were favored by the majority of the stockholders and could
enhance the ability of officers and directors to retain their positions.
Stockholders should be aware, however, that the Board of Directors has a
fiduciary obligation to analyze the potential effects of the issuance of any
shares upon the Company and its shareholders and to issue shares only when
the Board of Directors believes the issuance to be in the best interests of
the Company and its shareholders. The Company has no present intention to
use any of the Preferred Stock to be authorized in the Special Meeting (or
its currently authorized Common Stock) for anti-takeover purposes.
As discussed more fully below, Section 203 of the Delaware General
Corporation Law may be deemed to have an anti-takeover effect and should be
reviewed in evaluating this proposal.
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. Such section provides, with certain exceptions, that
a Delaware corporation may not engage in any of a broad range of business
combinations with a person, or an affiliate or associate of such person, who
is an "interested stockholder" for a period of three years from the date that
such person became an interested stockholder unless: (i) the transaction
resulting in a person becoming an interested stockholder, or the business
combination, is approved by the board of directors of the corporation before
the person becomes an interested stockholder; (ii) upon consummation of the
transaction that made it an interested stockholder, such person owned 85% or
more of the voting stock of the corporation that was outstanding prior to the
commencement of such transaction (excluding shares owned by persons who are
both officers and directors of the corporation, and shares held by certain
employee stock ownership plans); or
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(iii) on or after the date the person becomes an interested stockholder, the
business combination is approved by the corporation's board of directors and by
the holders of at least 66 2/3% of the corporation's outstanding voting stock at
an annual or special meeting, excluding shares owned by the interested
stockholder. Under Section 203, an "interested stockholder" is defined as any
person that is (i) the owner of 15% or more of the outstanding voting stock of
the corporation or (ii) an affiliate or associate of the corporation and was the
owner of 15% or more of the outstanding voting stock of the corporation at any
time within the three-year period immediately prior to the date on which it is
sought to be determined whether such person is an interested stockholder.
If approved by the stockholders, this proposed amendment to the Company's
Certificate of Incorporation, with respect to Preferred Stock, will become
effective upon filing Articles of Amendment with the Secretary of State of
Delaware, which is expected to be accomplished on January 29, 1999, or as soon
thereafter as practicable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
COMPANY'S CERTIFICATE OF INCORPORATION TO AUTHORIZE THE ISSUANCE OF PREFERRED
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 each of Proposal No. 1 and
Proposal No. 2. 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 either Proposal No. 1 or Proposal No. 2.
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in the Company's proxy materials
relating to the next annual meeting of stockholders must have been received by
the Company on or before December 1, 1998. After February 14, 1999, notice to
the Company of a stockholder proposal submitted otherwise than pursuant to Rule
14a-8 will be considered untimely, and the person named in proxies solicited by
the Board of Directors of the Company for its 1999 Annual Meeting of
stockholders may exercise discretionary authority voting power with respect to
any such proposal as to which the Company does not receive timely notice.
The above notice and Proxy Statement are sent by order of the Board of
Directors.
January 12, 1999
8
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Margaret Von der Schmidt
Secretary
9
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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
0.222 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:
<PAGE>
APPENDIX B
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 of the Corporation is hereby amended
by deleting Section 4.1 thereof and by substituting in lieu of said Section 4.1
the following new Section 4.1:
"4.1 AUTHORIZED STOCK AND CLASSES OF STOCK. The
Corporation shall have the authority to issue 50,000,000
shares, consisting of 40,000,000 shares of Common Stock,
$0.01 par value per share, and 10,000,000 shares of
Preferred Stock, $0.01 par value per share. The Board of
Directors is authorized, subject to limitations prescribed
by law, to provide for the issuance of the shares of
Preferred Stock in series, and by filing a certificate
pursuant to the applicable law of the State of Delaware, to
establish from time to time the number of shares to be
included in each such series, and to fix the designation,
voting power, other powers, preferences and rights of the
shares of each such series and any qualifications,
limitations or restrictions thereof. The number of
authorized shares of Preferred Stock may be increased or
decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a
majority of the stock entitled to vote thereon, without a
vote of the holders of the outstanding Preferred Stock as a
class, or of any series thereof as a class, unless a vote of
any such holders is required pursuant to the certificate or
certificates establishing any such series of Preferred
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.
<PAGE>
3. The Corporation has caused this Certificate of Amendment to be executed by
_______________, its authorized ___________________.
5. This Certificate of Amendment shall be effective as of the date of
filing with the Delaware Secretary of State.
Date: _______________, 1999.
-------------------------------
Name:
Title:
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
FOR THE SPECIAL MEETING OF STOCKHOLDERS OF
RACOM SYSTEMS, INC.
TO BE HELD JANUARY 29, 1999
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 January 7, 1999, at the Special Meeting of
stockholders to be held January 29, 1999, or any adjournment or postponement
thereof.
PROPOSAL NO. 1. To amend the Company's Certificate of Incorporation
to authorize the reverse split the Company's Common Stock on the basis
of one share for each four and one-half shares outstanding.
FOR__________ AGAINST___________ ABSTAIN_________
PROPOSAL NO. 2. To amend the Company's Certificate of Incorporation to
authorize up to 10,000,000 shares of Preferred Stock of the Company, par
value $0.01 per share, issuable in one or more series.
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 below. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give your 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.
Dated: Signature
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Signature, if held jointly
<PAGE>
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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