<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED 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 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 Rule 14a-11(c) or Rule 14(a)-12
Objective Communications, Inc.
------------------------------
(Name of Registrant as Specified in Charter)
----------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than 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.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
OBJECTIVE COMMUNICATIONS, INC.
50 INTERNATIONAL DRIVE
PORTSMOUTH, NEW HAMPSHIRE 03801
---------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
MARCH 19, 1999
---------------
To Our Stockholders:
Notice is hereby given that a Special Meeting of Stockholders of Objective
Communications, Inc. (the "Company") will be held at the Company's headquarters,
located at 50 International Drive, Portsmouth, New Hampshire 03801, on March 19,
1999 at 10:00 a.m., local time, for the following purposes:
1. To consider and vote upon a proposal to amend the Second Amended
and Restated Certificate of Incorporation of the Company to effect a one
share for _____ shares reverse stock split of the Company's issued and
outstanding shares of common stock, par value $.01 per share (the "Common
Stock"), and to amend and restate the Company's existing Certificate of
Incorporation to read as set forth on Exhibit A;
2. To consider and vote upon a proposal to approve the issuance by the
Company of shares of Common Stock (and securities exercisable, convertible
or exchangeable for shares of Common Stock) in a private placement in
excess of 20% of the number of outstanding shares of Common Stock; and
3. To transact such other business as may properly come before Special
Meeting of Stockholders or any adjournment thereof.
Only holders of record of Common Stock of the Company at the close of
business on February 16, 1999 will be entitled to notice of, and to vote at, the
Special Meeting of Stockholders or any adjournment or postponement thereof.
By Order of the Board of Directors,
Robert H. Emery
Secretary
Dated: February 19, 1999
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING,
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE POSTAGE-PAID
ENVELOPE PROVIDED.
<PAGE> 3
OBJECTIVE COMMUNICATIONS, INC.
50 INTERNATIONAL DRIVE
PORTSMOUTH, NEW HAMPSHIRE 03801
---------------
SPECIAL MEETING OF STOCKHOLDERS
MARCH 19, 1999
---------------
PROXY STATEMENT
---------------
GENERAL INFORMATION
PROXY SOLICITATION
This proxy statement (the "Proxy Statement") is furnished in connection
with the solicitation of proxies by the Board of Directors of Objective
Communications, Inc. (the "Company") for use at a Special Meeting of
Stockholders, or an adjournment or postponement of the special meeting (the
"Special Meeting"), to be held at the Company's headquarters, located at 50
International Drive, Portsmouth, New Hampshire 03801, on Friday, March 19, 1999,
at 10:00 a.m., local time. The purpose of the Special Meeting and the matters to
be acted upon are set forth in the accompanying Notice of Special Meeting.
The Company will pay the costs of all proxy solicitation. In addition to
the solicitation of proxies by use of the mails, officers and other employees of
the Company may solicit proxies by personal interview, telephone and facsimile.
None of these individuals will receive compensation for such services, which
will be performed in addition to their regular duties. The Company also has made
arrangements with brokerage firms, banks, nominees and other fiduciaries to
forward proxy solicitation material for shares held of record by them to the
beneficial owners of such shares. The Company will reimburse such persons for
their reasonable out-of-pocket expenses in forwarding such material. The Company
also may retain a proxy soliciting firm to assist in the collection of proxies
and the solicitation of proxies by personal interview, telephone, facsimile and
telegram. It is expected that, if a proxy soliciting firm is retained, the fees
for such firm will not exceed $10,000, plus reimbursement of out-of-pocket
expenses.
A list of the stockholders entitled to vote at the Special Meeting of
Stockholders will be open to the examination of any stockholder, for any purpose
germane to the meeting, for ten days prior to the meeting at the Company's
corporate offices located at 50 International Drive, Portsmouth, New Hampshire
03801.
This proxy statement and the enclosed proxy are first being mailed to the
Company's stockholders on or about February 19, 1999.
VOTING AND REVOCABILITY OF PROXIES
A proxy for use at the Special Meeting and a return envelope are enclosed.
Shares of common stock, par value $0.01 per share (the "Common Stock"), of the
Company outstanding as of the record date for the Special Meeting and
represented by a properly executed proxy, if such proxy is timely received and
not revoked, will be voted at the Special Meeting in accordance with the
instructions indicated in such proxy. If no instructions are indicated, such
shares will be voted "FOR" the proposal to amend the Company's Second Amended
and Restated Certificate of Incorporation to effect the one share for ____shares
reverse stock split, and "FOR" the proposal to approve the issuance by the
Company of shares of Common Stock (and securities exercisable, convertible or
exchangeable for shares of Common Stock) in a private placement in excess of 20%
of the number of outstanding shares of Common Stock. Discretionary authority is
provided in the proxy as to any matters not specifically referred to therein.
Management is not aware of any other matters that are likely to be brought
before the Special Meeting. If any such matters properly come before the Special
Meeting, however, the persons named in the proxy are fully authorized to
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vote thereon in accordance with their judgment and discretion.
A stockholder who has given a proxy may revoke it at any time prior to its
exercise at the Special Meeting by (1) giving written notice of revocation to
the Secretary of the Company, (2) properly submitting to the Company a duly
executed proxy bearing a later date or (3) voting in person at the Special
Meeting. All written notices of revocation or other communications with respect
to revocation of proxies should be addressed as follows: Objective
Communications, Inc., 50 International Drive, Portsmouth, New Hampshire 03801,
Attention: Corporate Secretary.
VOTING PROCEDURE
All holders of record of the Common Stock of the Company at the close of
business on February 16, 1999 (the "Record Date") will be eligible to vote at
the Special Meeting. Each holder of Common Stock is entitled to one vote at the
Special Meeting for each share of Common Stock held by such stockholder. As of
February 8, 1999, there were 6,881,035 shares of Common Stock outstanding. As of
that date, there were also issued and outstanding 209,091 shares of Series B 5%
Cumulative Convertible Preferred Stock, par value $.01 per share (the "Series B
Preferred Stock"). Holders of shares of Series B Preferred Stock are not
entitled to notice of or to vote at the Special Meeting.
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock entitled to vote will constitute a quorum for the
transaction of business. Votes cast in person or by proxy, abstentions and
broker non-votes (as hereinafter defined) will be tabulated by the inspectors of
election and will be considered in the determination of whether a quorum is
present at the Special Meeting. The inspectors of election will treat shares
represented by executed proxies which abstain as shares that are present and
entitled to vote for purposes of determining the approval of such matter. If,
with respect to any shares, a broker or other nominee submits a proxy indicating
that instructions have not been received from the beneficial owners or the
persons entitled to vote and that such broker or other nominee does not have
discretionary authority to vote such shares (a "broker non-vote") on Proposal
No. 1 or Proposal No. 2, those shares will not be treated as present and
entitled to vote for purposes of determining whether Proposal No. 1 and Proposal
No. 2 are approved.
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock of the Company as of February 8, 1999, by (i) all
persons known by the Company to beneficially own 5% or more of the outstanding
shares of Common Stock, (ii) each current director of the Company, and (iii) all
current directors and executive officers of the Company, as a group. Unless
otherwise noted, each stockholder named has sole voting and investment power
with respect to such shares, subject to community property laws where
applicable.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
OWNERSHIP CLASS (1)
---------- ---------
<S> <C> <C>
Anthony M. Agnello(2)......................................... 4,133 *%
Robert L. Barnett(3).......................................... 29,266 *
Donald W. Barrett(4).......................................... 29,000 *
James F. Bunker (5)........................................... 40,000
Eugene R. Cacciamani(6)....................................... 34,400 *
Marc S. Cooper(7)............................................. 246,900 3.5
Lincoln D. Faurer(8).......................................... 24,000 *
Clifford M. Kendall(9)........................................ 67,699 1.0
Roy C. Nash(10)............................................... 25,266 *
Steven A. Rogers(11).......................................... 989,912 14.3
John B. Torkelsen(12)......................................... 497,333 7.0
All directors and executive officers as a group (15 2,114,604 27.5%
persons)(13).................................................. ------------- --------
</TABLE>
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- ----------
* Less than one percent
(1) Applicable percentage of ownership is based on 6,881,035 shares of Common
Stock outstanding as of February 7, 1999. Beneficial ownership is
determined in accordance with rules of the Securities and Exchange
Commission (the "Commission"). For each beneficial owner, shares of Common
Stock subject to options or conversion rights exercisable within 60 days of
the date of this proxy are deemed outstanding.
(2) The address of Mr. Agnello is 2540 Route 130, Cranbury, New Jersey 08512.
Mr. Agnello was elected as a member of the Board of Directors pursuant to a
voting agreement among the Company, Mr. Rogers, Applewood Associates, L.P.
("Applewood") and Acorn Technology Partners, L.P. ("Acorn"). Consists of
4,133 shares of Common Stock issuable upon exercise of options.
(3) The address of Mr. Barnett is 1445 South Ridge Road, Lake Forest, Illinois
60045. Includes 21,766 shares of Common Stock issuable upon exercise of
options.
(4) The address of Mr. Barrett is 3105 Bennett Point Road, Queenstown, Maryland
21658. Includes 24,000 shares of Common Stock issuable upon exercise of
options.
(5) The address of Mr. Bunker is c/o Objective Communications, Inc., 50
International Drive, Portsmouth, New Hampshire 03801. Excludes any shares
of Common Stock that may be acquired upon conversion of the outstanding 5%
Convertible Debentures due 2003 of the Company (the "5% Convertible
Debentures"), of which Mr. Bunker beneficially owns, through a limited
partnership that he controls, $25,000 original principal amount.
(6) The address of Dr. Cacciamani is 10100 New London Drive, Potomac, Maryland
20854. Includes 24,400 shares in aggregate principal amount of Common Stock
issuable upon exercise of options. Excludes any shares of Common Stock
issuable upon conversion of the outstanding 5% Convertible Debentures, of
which Mr. Cacciamani owns $10,000 original principal amount.
(7) The address of Mr. Cooper is 888 Seventh Avenue, 17th Floor, New York, New
York 10019. Consists of 180,000 shares of Common Stock that may be acquired
upon exercise of an option that is currently exercisable (the "Barington
Option"), 66,900 shares of Common Stock issuable upon the exercise of other
options. Excludes any shares of Common Stock issuable upon conversion of
the outstanding 5% Convertible Debentures, of which Mr. Cooper owns $25,000
original principal amount. The Barington Option is held by Barington
Capital Group, L.P. ("Barington") and was granted by the Company in
connection with the initial public offering of the Company's Common Stock
in April 1997. Mr. Cooper also is a stockholder in LNA Capital Corp., the
corporate general partner of Barington. Includes options to acquire 27,000
shares of Common Stock which Cross Connect, L.L.C. has the right to acquire
under certain conditions. Cross Connect, L.L.C. is not affiliated with
Barington or Mr. Cooper, and Mr. Cooper disclaims beneficial ownership of
the 27,000 shares of Common Stock that may be acquired upon exercise of
such options.
(8) The address of Lt. Gen. Faurer is 1438 Brookhaven Drive, McLean, Virginia
22102. Consists of 24,000 shares of Common Stock issuable upon the exercise
of options.
(9) The address of Mr. Kendall is 2 Tobin Court, Potomac, Maryland 20854.
Includes 42,699 shares of Common Stock issuable upon the exercise of
options. Excludes any shares of Common Stock issuable upon conversion of
the outstanding 5% Convertible Debentures, of which Mr. Kendall owns
$100,000 original principal amount.
(10) The address of Mr. Nash is 4251 Gulf Shore Boulevard North, Naples, Florida
34103. Includes 21,766 shares of Common Stock issuable upon the exercise of
options.
(11) The address of Mr. Rogers is c/o Objective Communications, Inc., 50
International Drive, Portsmouth, New Hampshire 03801. Includes 16,666
shares of Common Stock issuable upon exercise of warrants, and 43,333
shares of Common Stock issuable upon exercise of options.
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(12) The address of Mr. Torkelsen is 240 Library Place, Princeton, New Jersey
08540. Includes (i) 4,133 shares of Common Stock issuable upon the exercise
of options; (ii) 280,580 shares of Common Stock beneficially owned by
Princeton Venture Research, Inc. ("PVR"), of which Mr. Torkelsen is the
President and majority stockholder, and which are pledged to BT Alex. Brown
to secure certain obligations; (iii) 107,620 shares of Common Stock that
may be acquired upon the exercise of warrants beneficially owned by PVR;
(iv) 100,000 shares of Common Stock that may be acquired upon the exercise
of warrants beneficially owned by Acorn Technology Fund, L.P., of which Mr.
Torkelsen is the general partner, and which are currently held in escrow
pending a financial settlement with a financial institution; and (v) 5,000
shares of Common Stock that may be acquired upon the exercise of warrants
beneficially owned by Pamela Torkelsen. Mr. Torkelsen disclaims beneficial
ownership of the warrants owned by Mrs. Torkelsen.
(13) Includes 562,989 shares of Common Stock issuable to executive officers and
directors upon exercise of options and 235,119 shares of Common Stock
issuable to executive officers and directors upon the exercise of warrants.
APPROVAL OF AMENDMENTS TO SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION TO EFFECT REVERSE STOCK SPLIT
(PROPOSAL NO. 1)
Stockholders of the Company are being asked to consider and vote upon a
proposal to amend the Second Amended and Restated Certificate of Incorporation
of the Company (the "Existing Certificate of Incorporation"), to adopt
amendments to effectuate a one share for _____ shares reverse stock split in the
issued and outstanding shares of Common Stock. Upon the approval of this
Proposal No. 1 by the stockholders of the Company, the Existing Certificate of
Incorporation will be amended and restated to read in the form of the Third
Amended and Restated Certificate of Incorporation attached hereto as Exhibit A.
The Board of Directors has approved the proposal to effect a one share for _____
shares reverse stock split in the Company's issued and outstanding Common Stock,
and directed that the proposal be submitted to the stockholders for approval.
The proposal to amend the Existing Certificate of Incorporation to amend and
restate Article Fifth relating to the Company's Common Stock to effectuate a one
share for _____ shares reverse stock split is referred to in this Proxy
Statement as the "Reverse Stock Split."
Except for any changes as a result of the repurchase by the Company of
fractional shares, each stockholder of the Company will hold the same percentage
of Common Stock outstanding immediately following the Reverse Stock Split as
each stockholder did immediately prior to the Reverse Stock Split. If approved
by the stockholders of the Company as provided in this Proxy Statement, the
proposed amendments to the Existing Certificate of Incorporation and the Reverse
Stock Split will be effected by the amendment and restatement of the Existing
Certificate of Incorporation to read in the form attached to this Proxy
Statement as Exhibit A (the "Amended and Restated Certificate of
Incorporation"). Subject to the receipt of the requisite stockholder approval,
the Amended and Restated Certificate of Incorporation and the Reverse Stock
Split would be effective on which the Amended and Restated Certificate of
Incorporation is filed with the Secretary of State of the State of Delaware (the
"Effective Date"), which is expected to occur promptly following the Special
Meeting. A copy of the Amended and Restated Certificate of Incorporation is
attached to this Proxy Statement as Exhibit A and incorporated into this Proxy
Statement by this reference. The discussion of the proposed amendments to
Article Fifth of the Existing Certificate of Incorporation, the Reverse Stock
Split and the Amended and Restated Certificate of Incorporation are qualified by
reference to the text of the Amended and Restated Certificate of Incorporation.
You are encouraged to read the Amended and Restated Certificate of Incorporation
in its entirety.
At the Effective Date, each _____ shares of Common Stock issued and
outstanding will automatically and without further action by the Board of
Directors or stockholders of the Corporation, be reclassified and converted into
one share of Common Stock. Fractional shares will not be issued as a result of
the Reverse Stock Split, but will be repurchased by the Company for cash at the
current fair market value of the fractional share interest. The cash payment for
the fractional share interest will be calculated by multiplying the fractional
share by the fair market value per share of Common Stock, which will be the
closing sale price per share of Common Stock on the Nasdaq National Market (or
any other listing or quotation system on which the shares of Common Stock are
then listed or
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quoted) on the business day prior to the Effective Date.
If the proposal to amend the Existing Certificate of Incorporation to
effect the Reverse Stock Split and to adopt the Amended and Restated Certificate
of Incorporation is approved by the requisite vote of the stockholders of the
Company, the Company intends to file the Amended and Restated Certificate of
Incorporation promptly with the Secretary of State of the State of Delaware.
However, notwithstanding the approval of the proposal by the stockholders of the
Company, the Board of Directors of the Company may elect not to file, or to
delay the filing of, the Amended and Restated Certificate of Incorporation if
the Board of Directors determines that filing the Amended and Restated
Certificate of Incorporation would not be in the best interests of the Company
and its stockholders. In addition, the Board is authorized to make any changes
to the proposed amendments to the Existing Certificate of Incorporation that it
determines to be necessary to give effect to the intent and purposes of the
Reverse Stock Split proposal.
REASONS FOR THE REVERSE STOCK SPLIT
The Company has entered into a letter of intent with ____________________
("____") dated January 14, 1999 (the "Letter of Intent") relating to, among
other things, a proposed public offering by the Company of shares of its Common
Stock in an offering for which ____ would act as the managing underwriter (the
"____ Offering"). It is a condition to ____ proceeding with the ____ Offering
that the Company have effected a one share for _____ shares reverse stock split
of its issued and outstanding Common Stock. The primary purpose of the Reverse
Stock Split is to satisfy a condition to ____ proceeding with the ____ Offering.
The Reverse Stock Split will combine the issued and outstanding shares of Common
Stock, so it is anticipated that the principal effect of the Reverse Stock Split
will be to significantly increase the market price per share of the Common Stock
after giving effect to the Reverse Stock Split, as compared with the market
price per share of the Common Stock outstanding before giving effect to the
Reverse Stock Split. The Company believes that a significant increase in the
price per share of the Common Stock will facilitate the ____ Offering. However,
even if the Reverse Stock Split is effected, the completion of the ____ Offering
also is subject to a number of other conditions and uncertainties many of which
are beyond the Company's control, including economic and market conditions. The
Company therefore cannot provide you with any assurance that the ____ Offering
will be completed, or if completed, the timing of the ____ Offering or the gross
proceeds that will be received by the Company from the ____ Offering.
The Board of Directors believes that the ____ Offering is in the best
interests of the Company and its stockholders. The Company requires additional
financing to fund operations. At December 31, 1998, the Company had essentially
no cash remaining from which to fund operations. In late January, the Company
consummated a private placement of 28.5 units, each unit consisting of a
$100,000 unsecured negotiable promissory note and 40,000 shares of Common Stock,
resulting in gross proceeds to the Company of $2,850,000. However, the Company
estimates that the net proceeds from the private placement are sufficient to
fund the Company's operations only for three months. If the Company is not able
to complete the ____ Public Offering or to obtain alternative sources of
financing, the Company will be forced to consider alternative methods of
maximizing shareholder value, which could include sales of the Company's assets,
a sale of the Company, workout alternatives or bankruptcy.
The Company also believes that the current low price per share at which
the Company's Common Stock is trading reduces the marketability of the Common
Stock because certain brokerage firms are reluctant to recommend low-priced
stock to their clients. Investors may view low-priced stock as unattractive,
more risky or more volatile than alternative investments. In addition, certain
brokerage houses have policies and practices that discourage individual brokers
within those firms from dealing in lower priced stocks. These policies and
practices pertain, among other things, to payment of brokerage commissions and
to time-consuming procedures that function to cause lower priced stocks to be
less attractive to brokers from an economic point of view. In addition, since
brokerage commissions on lower priced stocks represent a higher percentage of
the stock price than commissions on higher priced stocks, the current price per
share of the Common Stock may result in individual stockholders paying higher
per share transaction costs. The Board of Directors also believes that the
Reverse Stock Split will enhance the Company's flexibility in the future for
financing and capitalization needs. The Company cannot assure you that the
Reverse Stock Split will have any of the foregoing effects.
For the reasons set forth above, the Board of Directors of the Company
believes that the Reverse Stock Split is in the best interests of the Company
and its stockholders. However, the Company cannot assure you that the
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Reverse Stock Split will have the desired consequences. The Company anticipates
that, following consummation of the Reverse Stock Split, the Common Stock will
trade at a price per share that is significantly higher than the current market
price per share of the Common Stock. THERE CAN BE NO ASSURANCE THAT THE TOTAL
MARKET CAPITALIZATION OF THE COMMON STOCK AFTER THE PROPOSED REVERSE STOCK SPLIT
WILL BE EQUAL TO THE TOTAL MARKET CAPITALIZATION BEFORE THE PROPOSED REVERSE
STOCK SPLIT OR THAT THE MARKET PRICE FOLLOWING THE REVERSE STOCK SPLIT WILL
EITHER EXCEED OR REMAIN IN EXCESS OF THE CURRENT MARKET PRICE. IN MANY CASES,
THE TOTAL MARKET CAPITALIZATION OF A COMPANY FOLLOWING A REVERSE STOCK SPLIT IS
LOWER, AND MAY BE SUBSTANTIALLY LOWER, THAN THE TOTAL MARKET CAPITALIZATION
BEFORE THE REVERSE STOCK SPLIT.
THIS PROXY STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES PROPOSED TO BE SOLD BY THE
COMPANY IN THE ____ OFFERING, WHICH WILL BE MADE BY MEANS OF A PROSPECTUS
RELATING TO THOSE SECURITIES.
A REGISTRATION STATEMENT RELATING TO THE SECURITIES PROPOSED TO BE SOLD
BY THE COMPANY IN THE ____ OFFERING HAS BEEN FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. THE SECURITIES PROPOSED TO
BE SOLD BY THE COMPANY IN THE ____ OFFERING MAY NOT BE SOLD NOR MAY OFFERS TO
BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
THIS PROXY STATEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE
IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
A PROSPECTUS MEETING THE REQUIREMENTS OF SECTION 10 OF THE SECURITIES ACT
OF 1933, AS AMENDED, MAY BE OBTAINED FROM: ____________________,
____________________, ________, _______ _____, TELEPHONE: (___) ___-____.
EFFECTS OF THE REVERSE STOCK SPLIT PROPOSAL
After the effectiveness of the Reverse Stock Split, each stockholder will
own approximately ___% of the number of shares of Common Stock as such
stockholder owned prior to the Reverse Stock Split, but will own the same
percentage of the outstanding shares of Common Stock of the Company, except
that the Company will repurchase fractional share interests at the then current
fair market value. Each stockholder of the Company immediately prior to the
Reverse Stock Split will continue to be a stockholder of the Company after the
Reverse Stock Split, except that the Company will repurchase all of the
fractional share interests received in the Reverse Stock Split. Accordingly,
stockholders holding _____ or fewer shares of Common Stock will no longer be
stockholders of the Company after the Reverse Stock Split. The number of shares
of Common Stock that may be purchased upon the exercise or conversion of
outstanding options, warrants, and other securities convertible into or
exchangeable for shares of Common Stock of the Company (collectively, the
"Convertible Securities") and the per share exercise or conversion price per
share will be adjusted appropriately so that, as of the Effective Date, the
aggregate number of shares of Common Stock issuable in respect of Convertible
Securities immediately following the Effective Date will be approximately
___% of the number issuable in respect thereof immediately prior to the
Effective Date and the aggregate exercise and conversion prices thereunder will
remain unchanged.
As a result of the Reverse Stock Split, certain stockholders may own "odd
lots" of fewer than one hundred (100) shares of Common Stock. Brokerage
commissions and other costs of transactions in fewer than odd lots may be higher
than for odd lot transactions, particularly on a per-share basis.
The par value of the Common Stock of $.01 per share will remain unchanged
as a result of the Reverse Stock Split. The number of outstanding shares of
Common Stock will be reduced by ____% and by such additional number to
account for the repurchase by the Company of fractional share interests that
otherwise would result from the Reverse Stock Split. Accordingly, the aggregate
par value of the issued and outstanding shares of Common Stock, and the paid-in
capital associated with the Common Stock, will be reduced, and the paid-in
surplus (capital paid in excess of the par value) will be increased in a
corresponding amount for statutory and accounting purposes. The Reverse Stock
Split will not have any affect on the Company's current Accumulated
Stockholders' Deficit. If the Reverse Stock Split is effected, all share and per
share information in the Company's financial statements will be retroactively
adjusted following the Effective Date to reflect the Reverse Stock Split for all
periods presented in future filings with the Securities and Exchange Commission
and the Nasdaq Stock Market.
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EXCHANGE OF STOCK CERTIFICATES; NO FRACTIONAL SHARES
If the Reverse Stock Split is approved by the stockholders of the
Company, the combination and reclassification of shares of Common Stock pursuant
to the Reverse Stock Split will occur on the Effective Date automatically and
without any further action on the part of the stockholders and regardless of the
date on which the certificates representing the share of Common Stock are
physically surrendered to the Company for exchange. Every _____ issued and
outstanding shares of Common Stock would be converted and reclassified into one
share of Common Stock in the Reverse Stock Split, and any fractional share
interests resulting from such reclassification and combination would be
repurchased by the Company for cash at a price equal to the fair market value of
the Common Stock on the day preceding the Effective Date multiplied by such
fractional share interest. The "fair market value" of the Common Stock means the
closing price per share as reported on the Nasdaq National Market (or on such
other quotation system or exchange on which the Common Stock is then quoted or
listed for trading) on the business day immediately preceding the Effective
Date.
As soon as practicable after the Effective Date, transmittal forms will
be mailed to each holder of record of Common Stock for use in forwarding to the
Company stock certificates for surrender and exchange for certificates
representing the number of shares of Common Stock to which such holder is
entitled and the cash payment (to be paid by check) for any fractional share
interest. The transmittal forms will be accompanied by instructions specifying
the details of the exchange. Upon receipt of the transmittal form, each
stockholder should surrender the certificates representing shares of Common
Stock prior to the effectiveness of the Reverse Stock Split, in accordance with
the applicable instructions. Each holder who surrenders certificates will
receive new certificates representing the whole number of shares of Common Stock
to which such holder is entitled as a result of the Reverse Stock Split, and a
check for the cash payment to which such holder is entitled as a result of the
repurchase by the Company of fractional share interests, if any.
STOCKHOLDERS SHOULD NOT SEND THEIR STOCK CERTIFICATES UNTIL THEY RECEIVE
A TRANSMITTAL FORM FROM THE COMPANY.
As of the Effective Date, each certificate representing shares of Common
Stock outstanding prior to the Effective Date (an "existing certificate") will
be deemed canceled and, for all corporate purposes, will be deemed only to
evidence ownership of the number of shares of Common Stock into which the shares
of Common Stock evidenced by such existing certificates have been converted by
the Reverse Stock Split.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material federal income tax
consequences of the Reverse Stock Split to stockholders of the Company. The
following summary discussion is based upon the Internal Revenue Code of 1986
(the "Code"), Treasury regulations thereunder, judicial decisions, and current
administrative rulings and practices, all as in effect on the date hereof and
all of which could be repealed, overruled, or modified at any time, possibly
with retroactive effect. There can be no assurance that such changes will not
adversely affect the matters discussed in this summary. No ruling from the
Internal Revenue Service ("IRS") with respect to the matters discussed herein
has been requested, and there is no assurance that the IRS would agree with the
conclusions set forth in this discussion.
This discussion may not address certain federal income tax consequences
that may be relevant to particular stockholders in light of their personal
circumstances or to certain types of stockholders (such as dealers in
securities, insurance companies, foreign individuals and entities, financial
institutions, and tax-exempt entities) who may be subject to special treatment
under the federal income tax laws. This discussion also does not address any tax
consequences under state, local or foreign laws.
STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISERS AS TO THE PARTICULAR
TAX CONSEQUENCES TO THEM OF THE REVERSE STOCK SPLIT.
The Company believes that the Reverse Stock Split will qualify as a
"recapitalization" under Section 368(a)(1)(E) of the Code and as a
stock-for-stock exchange under Section 1036(a) of the Code. As a result, the
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Company believes that no gain or loss should be recognized by a stockholder in
the Reverse Stock Split, except with respect to any cash received in lieu of
fractional share interests. The aggregate tax basis of the shares of Common
Stock held by a stockholder following the Reverse Stock Split will equal the
stockholder's aggregate basis in the Common Stock held immediately prior to the
Reverse Stock Split. Generally, the aggregate tax basis will be allocated among
the shares of Common Stock held following the Reverse Stock Split on a pro rata
basis. Stockholders who have used the specific identification method to identify
their basis in shares of Common Stock combined in the Reverse Stock Split should
consult their own advisers to determine their basis in the shares of Common
Stock received in exchange in the Reverse Stock Split. Shares of Common Stock
received should have the same holding period as the Common Stock surrendered.
Each stockholder who receives cash, if any, in lieu of fractional share
interests will recognize capital gain or loss equal to the difference between
the amount of cash received and the stockholder's tax basis allocable to such
fractional shares.
This summary is provided for general information only and does not
purport to address all aspects of the possible federal income tax consequences
of the Reverse Stock Split and is not intended as tax advice to any person. Each
stockholder should consult his or her tax advisor regarding the specific tax
consequences of the proposed transaction to such stockholder, including the
application and effect of state, local and foreign income and other tax laws. It
is the responsibility of each stockholder to obtain and rely on advice from his
or her personal tax advisor with respect to the effect of the Reverse Stock
Split on his or her personal tax situation; the effect of possible future
legislation and regulations; and the reporting of information required in
connection with the Reverse Stock Split on his or her own tax returns. It also
will be the responsibility of each stockholder to prepare and file appropriate
tax returns.
VOTE REQUIRED
The adoption of the proposed amendment to Article Fifth of the Existing
Certificate of Incorporation of the Company to effectuate the Reverse Stock
Split and the amendment and restatement of the Existing Certificate of
Incorporation to read in the form of the Amended and Restated Certificate of
Incorporation attached hereto as Exhibit A, requires the approval of the
affirmative vote of not less than a majority of the votes entitled to be cast by
all shares of Common Stock issued and outstanding on the Record Date.
If the proposed amendment to Article Fifth of the Restated Certificate of
Incorporation is approved by the stockholders, it will become effective upon
filing and recordation of a Certificate of Amendment with the Secretary of State
of the State of Delaware as required by the DGCL. IF THE PROPOSAL TO AMEND THE
RESTATED CERTIFICATE OF INCORPORATION TO EFFECTUATE THE REVERSE STOCK SPLIT IS
NOT APPROVED, THE REVERSE STOCK SPLIT WILL NOT BE IMPLEMENTED. IF THE REVERSE
STOCK SPLIT IS NOT EFFECTED, THE COMPANY ANTICIPATES THAT IT WILL BE UNABLE TO
PROCEED WITH THE PUBIC OFFERING AND HAS NOT IDENTIFIED ANY ALTERNATIVE SOURCES
OF FINANCING AVAILABLE TO IT. The effect of an abstention or a broker non-vote
will have the effect of a vote against the proposal.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSED AMENDMENT
TO ARTICLE FIFTH OF THE EXISTING CERTIFICATE OF INCORPORATION TO EFFECT THE
REVERSE STOCK SPLIT AND TO AMEND AND RESTATE THE EXISTING CERTIFICATE OF
INCORPORATION TO READ AS SET FORTH ON EXHIBIT A.
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APPROVAL OF ISSUANCE BY THE COMPANY OF SHARES OF COMMON STOCK
(AND SECURITIES EXERCISABLE, CONVERTIBLE OR EXCHANGEABLE FOR SHARES OF
COMMON STOCK) IN A PRIVATE PLACEMENT IN EXCESS OF 20% OF THE OUTSTANDING
NUMBER OF SHARES OF COMMON STOCK
(PROPOSAL 2)
As indicated in the Company's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1998, and in press releases and other information
that has been publicly disseminated and filed with the Commission, the Company
is in need of additional financing to fund the Company's operations. As of
September 30, 1998, the Company had cash on hand of $1,756,000. At December 31,
1998, the Company had essentially no cash remaining from which to fund
operations. Between December 31, 1998 and February 5, 1999, the closing date of
the private placement by the Company of units, the Company paid only expenses
that were required to continue operating and financed such payments in part from
advances from executive officers. On February 5, 1999, the Company closed a
private placement of units from which it received an estimated $2,430,000 in net
proceeds. However, the net proceeds to the Company from the private placement of
units will fund operations for only an estimated three months. Further, the net
proceeds from the unit placement will not be sufficient to permit the Company to
identify and develop new products that continue the development of the
VidPhone(R) system, or otherwise expand business operations.
The Board of Directors of the Company has considered various alternatives
of raising additional financing. As discussed above, and as has been publicly
announced by the Company, the Company currently intends to file a registration
statement in the near future relating to a public equity offering expected to
raise $15 million in gross proceeds. The Company is pursuing the equity
financing to raise additional working capital and to fund continuing operations.
The Company currently expects that the public equity offering will be completed
early in the second quarter of 1999. However, the Company's ability to complete
a public equity offering is subject to a number of conditions, many of which are
beyond its control. In particular, the Company may have to withdraw or delay its
anticipated public offering because of conditions in the stock market, general
economic conditions, or because of a change in the market for video conferencing
equipment. If the Company were to be unsuccessful in its efforts to complete a
public offering, then it currently anticipates that it would seek to raise
additional capital through a private offering of the Company's securities. The
net proceeds of any private placement of securities would be used to fund
continuing operations, including sales and marketing initiatives.
The Company has not had any discussions regarding a private placement of
securities and cannot predict the securities that it would seek to place in a
private financing. However, the Company's Board of Directors believes that it is
in the best interests of the Company that the Company have the flexibility to
issue equity securities in a private placement transaction, if required to meet
the Company's continuing financing needs. Pursuant to Rule 4460(i)(1)(D) ("Rule
4460(i)(1)(D)") of the Nasdaq Stock Market, Inc. ("Nasdaq"), the Company is
required to obtain stockholder approval in connection with any transaction,
other than a public offering, that involves the issuance by the Company of
Common Stock (or securities convertible into or exercisable or exchangeable for
Common Stock) that equals 20% or more of the Common Stock of the Company
outstanding before the issuance of such securities at a price below market value
(the "20% Limitation"). On February 5, 1999, the closing sale price of the
Company's Common Stock as reported on the Nasdaq National Market was $2.5625 per
share. The Company currently expects it would require between $12 million and
$15 million to fund operations for at least the next twelve months. As of the
date of this proxy statement, there are 6,881,035 shares of Common Stock
outstanding. Thus, if the Company were to pursue a private equity financing and
seek to raise only $12 million, the 20% Limitation would be exceeded. If the
stockholders approve this Proposal Number 2, then if the anticipated public
offering is not completed, the Board of Directors of the Company will have the
flexibility to consider a private placement of equity securities, including (i)
the number of shares of Common Stock that would be issued in the private
placement, even if in excess of 20% or more of the Common Stock outstanding;
(ii) the purchase price of the shares of Common Stock and (iii) the terms and
conditions of any equity securities issued in the private placement. The Board
of Directors has determined that it is advisable and in the best interests of
the stockholders of the Company that the Board have this flexibility. In the
absence of stockholder approval of this Proposal Number 2, the Board would be
constrained in considering financing alternatives for the Company. Stockholders
are being requested to approve this proposal by adopting the following
resolutions:
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RESOLVED, that this Corporation is hereby authorized to issue shares of
its common stock, $.01 par value (the "Common Stock"), and securities
exercisable, convertible or exchangeable for Common Stock, that together
equal 20% or more of the Common Stock outstanding prior to the issuance
thereof in a private placement transaction; and it is further
RESOLVED, that the Board of Directors of this Corporation (and/or an
appropriate committee thereof) is hereby authorized to determine the
terms and conditions of any such private placement transaction, including
without limitation, (i) the number of shares of Common Stock that would
be issued in the Private Placement (which may exceed 20% or more of the
Common Stock outstanding); (ii) the purchase price of such shares of
Common Stock and (iii) the other terms and conditions of any equity
securities issued in the private placement.
REASONS FOR SEEKING STOCKHOLDER APPROVAL OF AN EQUITY ISSUANCE IN EXCESS OF 20%
OR MORE OF THE OUTSTANDING SHARES OF COMMON STOCK
The Board of Directors of the Company has decided to seek stockholder
approval of an issuance of Common Stock or securities exercisable, convertible
or exchangeable for shares of Common Stock of the Company in a private placement
transaction in order to provide the Company with the greatest flexibility in
pursuing financing alternatives. If the Company is unable to complete the
currently anticipated public equity financing, then in the absence of
stockholder approval of Proposal Number 2, the Board would be constrained in
considering financing alternatives. In considering financing alternatives, the
Company would seek to comply with the rules of the Nasdaq Stock Market and to
avoid a conflict with Rule 4460(i)(1)(D), which conflict could result in the
removal of the Company's Common Stock from inclusion on the Nasdaq National
Market. Further, given the Company's current cash position, the Board determined
that, if the public financing is not completed, the Company would not be in a
position to convene another special meeting of stockholders in time to meet its
financing needs. Accordingly, the Board believes that stockholder approval of
Proposal Number 2 will facilitate the Company's near-term financing needs and
keep options open that the Company may choose to pursue, particularly if the
public offering is not completed for any reason.
EFFECTS OF STOCKHOLDER APPROVAL OF AN EQUITY ISSUANCE IN EXCESS OF 20%
OR MORE OF THE OUTSTANDING SHARES OF COMMON STOCK
If the stockholders approve Proposal Number 2, then the Company will be
authorized to issue equity securities (Common Stock, or securities exercisable,
convertible or exchangeable for shares of Common Stock) in a private transaction
in excess of 20% of the outstanding number of shares of Common Stock. The
Company does not currently have any intention or plans or proposals to issue in
a private placement shares of Common Stock in excess of 20% of the outstanding
number of shares of Common Stock. In the event the Company fails to obtain
stockholder approval of the proposal to permit equity issuances in excess of the
20% Limitation, and the Company does not complete the anticipated public
offering of Common Stock, then the Company will be required to seek alternative
financings. Such financing would likely be in the form of short-term bridge
loans. There can be no assurance that the Company could obtain any financing
within the time required, on commercially reasonable terms, or at all. Further,
even if such short term loans were obtained, the Company would be required
within a short time thereafter to seek additional financing to repay such loans
and to finance its operations. There can be no assurance that such additional
financing could be obtained and that the Company would not again be required to
seek stockholder approval to exceed the 20% Limitation.
The Company's Common Stock currently is quoted on the Nasdaq National
Market. In order to maintain quotation of the Common Stock on the Nasdaq
National Market, the Company must maintain certain asset, capitalization or
income tests and stock price tests. Among other requirements, the Company must
maintain either (i) net tangible assets in excess of $4.0 million and a bid
price of at least $1.00 per share, or (ii) a market capitalization of at least
$50.0 million or total assets and total revenues of $50.0 million each, and a
bid price of at least $5.00 per share. At September 30, 1998, the Company failed
to meet the Nasdaq National Market net tangible asset requirement and Nasdaq has
advised the Company that it does not currently meet the Nasdaq National Market
quotation requirements. The Nasdaq Stock Market has made a preliminary
determination to delist the Common Stock, but delisting has been stayed pending
a hearing. The hearing is scheduled to occur in early March 1999. The
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Company believes that if it is able to complete a public or private equity
offering, then it will again meet the requirements necessary for the Common
Stock to remain eligible for quotation on Nasdaq. If the Common Stock is
delisted from quotation on the Nasdaq National Market, then there would be
material adverse consequences for the Company, its results of operations and its
financial condition. These consequences include, but are not limited to:
- limited availability of market quotations for the Company's
Common Stock;
- limited news and analyst coverage of the Company;
- adverse affect on the trading market for and market price
of the Company's Common Stock; and
- adverse affect on the Company's ability to issue additional
securities or secure additional financing in the future.
If the Company is unable to obtain additional financing either through
the public offering, a private placement or otherwise, the Company will not meet
the Nasdaq requirements, which is likely to result in the Common Stock no longer
being eligible for quotation on Nasdaq. Trading, if any, of the Common Stock
would thereafter be conducted in the over-the-counter market. As a result of
Nasdaq delisting, it would likely be more difficult for stockholders to dispose
of or to obtain accurate quotations as to the market value of their Common
Stock. Furthermore, the regulations of the Commission promulgated under the
Securities Exchange Act of 1934, as amended ("Exchange Act"), require additional
disclosure relating to the market for penny stocks. Commission regulations
generally define a penny stock to be an equity security that has a market price
of less than $5.00 per share, subject to certain exceptions. A disclosure
schedule explaining the penny stock market and the risks associated with such
securities is required to be delivered to a purchaser and various sales practice
requirements are imposed on broker-dealers who sell penny stocks to persons
other than to established customers and accredited investors (generally
institutional investors). In addition, the broker-dealer must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. If the Company's securities were to become subject to
the regulations applicable to penny stocks, the market liquidity for the
Company's securities could be severely affected. In such an event, the
regulations on penny stocks could limit the ability of broker-dealers to sell
the Company's securities and thus the ability of purchasers of the Company's
securities to sell their securities in the secondary market.
VOTE REQUIRED
The adoption of the proposal to approve the issuance by the Company in a
private placement of Common Stock, or securities exercisable, convertible or
exchangeable for shares of Common Stock, in excess of the 20% Limitation,
requires the approval of the affirmative vote of not less than a majority of the
votes present in person or by proxy at the Special Meeting, provided that a
quorum is present at the Special Meeting. An abstention or a broker non-vote
will have no effect on the vote on the proposal provided that a quorum is
present at the Special Meeting. Unless otherwise specified, all proxies received
will be voted in favor of Proposal Number 2.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO ISSUE
SHARES OF COMMON STOCK (OR SECURITIES EXERCISABLE, CONVERTIBLE OR EXCHANGEABLE
FOR SHARES OF COMMON STOCK) IN A PRIVATE PLACEMENT IN EXCESS OF 20% OF THE
OUTSTANDING NUMBER OF SHARES OF COMMON STOCK.
OTHER MATTERS
The Company knows of no other matters to be submitted at the Special
Meeting. If any other matters properly come before the Special Meeting, it is
the intention of the persons named in the proxy card to vote the shares they
represent as the Board of Directors may recommend.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
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The date by which stockholder proposals must have been received in order
to be included in the Company's proxy statement relating to its Annual Meeting
of Stockholders for the year ended December 31, 1998, has passed. Accordingly,
no further stockholder proposals should be submitted to the Company for
inclusion in the proxy materials for the Company's next Annual Meeting of
Stockholders, expected to be held in May of this year.
By Order of the Board of Directors,
Robert H. Emery,
Secretary
Dated: February 19, 1998
STOCKHOLDERS ARE REMINDED TO SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT
PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
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EXHIBIT A
THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
OBJECTIVE COMMUNICATIONS, INC.
The undersigned, a natural person, for the purpose of conducting the
business and promoting the purposes hereinafter stated, under the provisions and
subject to the requirements of the laws of the State of Delaware (particularly
Chapter 1, Title 8 of the Delaware Code, as amended, and referred to as the
"General Corporation Law of the State of Delaware"), hereby certifies that:
ARTICLE FIRST
NAME
The name of the corporation is: Objective Communications, Inc. (the
"Corporation").
ARTICLE SECOND
REGISTERED OFFICE AND REGISTERED AGENT
The address of the registered office of the Corporation in the State of
Delaware is 1209 Orange Street, Wilmington, Delaware, 19801, County of New
Castle, Delaware, and the name of the Corporation's registered agent in the
State of Delaware at such address is The Corporation Trust Company.
ARTICLE THIRD
PURPOSE
The purpose or purposes for which the Corporation is organized is to engage
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
ARTICLE FOURTH
CAPITAL STOCK
The total number of shares which the Corporation shall have authority to
issue is thirty two million five hundred thousand (32,500,000) shares of capital
stock, of which thirty million (30,000,000) shares shall be Common Stock, par
value of $.01 per share, and two million five hundred thousand (2,500,000) shall
be Preferred Stock, par value $.01 per share.
ARTICLE FIFTH
COMMON STOCK
Each share of Common Stock of the Corporation, par value $0.01, that is
issued and outstanding on the date and at the time at which this Third Amended
and Restated Certificate of Incorporation (the "Amended Certificate") becomes
effective shall be and are, by means of the Amended Certificate, automatically
and without any further action on the part of the stockholders of the
Corporation converted into and reconstituted as .____ (__________) fully-paid
and non-assessable shares of Common Stock of the Corporation, par value $0.01,
subject to the treatment of fractional interests as described below, with a
resultant simultaneous change in the amount of stated capital, additional
paid-in capital, and accumulated deficit of the Corporation. Each holder of a
certificate or certificates which, immediately prior to the effective date of
the Amended Certificate pursuant to and in accordance with the General
Corporation Law of the State of Delaware) (the "Effective Date"), representing
outstanding shares of Common Stock prior to the Effective Date shall be entitled
to receive a certificate representing the number of new shares of Common Stock
to which they shall be entitled as a result of the Amended Certificate upon
presentation of the certificate representing the outstanding shares prior to the
Effective Date to the Corporation's transfer agent for cancellation and
exchange.
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No scrip or fractional certificates will be issued upon such conversion and
reconstitution, and the number of shares of Common Stock issuable upon the
effectiveness of the Amended Certificate shall be rounded down to the nearest
whole share if a fractional share interest in a share of Common Stock would,
except for the provisions of the preceding sentence, be deliverable upon such
conversion and reconstitution, the Corporation shall pay an amount in cash equal
to the fair market value of such fractional interest to each holder of shares of
Common Stock to whom such fractional interest would have been deliverable, fair
market to be determined by multiplying the fractional interest by the closing
sale price per share of the Common Stock on the Nasdaq National Market (or such
other quotation or listing system on which the Common Stock may then be listed
or quoted) on the business day immediately preceding the Effective Date of the
reverse stock split. Such cash payment would be made upon the surrender to the
Corporation's transfer agent of stock certificates representing a fractional
share interest. The ownership of a fractional share interest in a share of
Common Stock will not give the holder thereof any voting, dividend or other
rights except the right to receive payment therefor as described herein.
Except as required by law, all shares of Common Stock shall be identical in
all respects and shall entitle the holders thereof to the same rights and
privileges, subject to the same qualifications, limitations and restrictions.
Except as required by law, the holders of shares of Common Stock shall be
entitled to one vote per share of Common Stock on all matters on which
stockholders of the Corporation have the right to vote.
ARTICLE SIXTH
PREFERRED STOCK
Section A. Preferred Stock. Shares of Preferred Stock may be issued from
time to time in one or more classes or series as the Board of Directors of the
Corporation (the "Board"), by resolution or resolutions, may from time to time
determine, each of such classes or series to be distinctly designated. The
voting powers, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations or restrictions thereof, if
any, of each such class or series may differ from those of any and all other
class or series of Preferred Stock at any time outstanding, and the Board is
hereby expressly granted authority to fix or alter, by resolution or
resolutions, the designation, number, voting powers, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions, of each such series, including, but without
limiting the generality of the foregoing, the following:
1. The distinctive designation of, and the number of shares of Preferred
Stock that shall constitute, such class or series, which number (except
where otherwise provided by the Board in the resolution establishing
such class or series) may be increased (but not above the total number
of shares of Preferred Stock) or decreased (but not below the number of
shares of such class or series then outstanding) from time to time by
like action of the Board;
2. The rights in respect of dividends, if any, of such class or series of
Preferred Stock, the extent of the preference or relation, if any, of
such dividends to the dividends payable on any other class or classes
or any other series of the same or other class or classes of capital
stock of the Corporation, and whether such dividends shall be
cumulative or noncumulative;
3. The right, if any, of the holders of such class or series of Preferred
Stock to convert the same into, or exchange the same for, shares of any
other class or classes or of any other series of the same or any other
class or classes of capital stock of the Corporation, and the terms and
conditions of such conversion or exchange;
4. Whether or not shares of such class or series of Preferred Stock shall
be subject to redemption, and the redemption price or prices and the
times at which, and the terms and conditions on which, shares of such
class or series of Preferred Stock may be redeemed;
5. The rights, if any, of the holders of such class or series of Preferred
Stock upon the voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation or in the event of any merger or
consolidation of or sale of assets by the Corporation;
6. The terms of any sinking fund or redemption or purchase account, if
any, to be provided for shares of such
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class or series of the Preferred Stock;
7. The voting powers, if any, of the holders of any class or series of
Preferred Stock generally or with respect to any particular matter,
which may be less than, equal to or greater than one vote per share,
and which may, without limiting the generality of the foregoing,
include the right, voting as a class or series by itself or together
with the holders of any other class or classes or series of Preferred
Stock or all series of Preferred Stock as a class, to elect one or more
directors of the Corporation (which, without limiting the generality of
the foregoing, may include a specified number or portion of the
then-existing number of authorized directorships of the Corporation)
generally or under such specific circumstances and on such conditions
as shall be provided in the resolution or resolutions of the Board
adopted pursuant thereto; and
8. Such other powers, preferences and relative, participating, optional
and other special rights, and the qualifications, limitations and
restrictions thereof, as the Board shall determine.
Section B. Rights of Preferred Stock.
1. After the provisions with respect to preferential dividends on any
series of Preferred Stock (fixed in accordance with the provisions of
this Article Sixth), if any, shall have been satisfied and after the
Corporation shall have complied with all the requirements, if any, with
respect to redemption of, or the setting aside of sums as sinking funds
or redemption or purchase accounts with respect to, any series of
Preferred Stock (fixed in accordance with the provisions of this
Article Sixth), and subject further to any other conditions that may be
fixed in accordance with the provisions of this Article Sixth, then and
not otherwise, the holders of Common Stock shall be entitled to receive
such dividends as may be declared from time to time by the Board.
2. In the event of the voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, after distribution in full of the
preferential amounts, if any, to be distributed to the holders of
Preferred Stock by reason thereof, the holders of Common Stock shall,
subject to the additional rights, if any (fixed in accordance with the
provisions of this Article Sixth), of the holders of any outstanding
shares of Preferred Stock, be entitled to receive all of the remaining
assets of the Corporation, tangible or intangible, of whatever kind
available for distribution to stockholders ratably in proportion to the
number of shares of Common Stock held by them respectively.
3. Except as may otherwise be required by law, and subject to the
provisions of such resolution or resolutions as may be adopted by the
Board pursuant to this Article Sixth granting the holders of one or
more series of Preferred Stock exclusive voting powers with respect to
any matter, each holder of Common Stock may have one vote in respect to
each share of Common Stock held on all matters voted upon by the
stockholders.
The number of authorized shares of Preferred Stock and each class of Common
Stock may, without a class or series vote, be increased or decreased from time
to time by the affirmative vote of the holders of shares having a majority of
the total number of votes which may be cast in the election of directors of the
Corporation by all stockholders entitled to vote in such an election, voting
together as a single class.
ARTICLE SEVENTH
DURATION
The Corporation is to have perpetual existence.
ARTICLE EIGHTH
BYLAWS
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors of the Corporation is expressly authorized to make,
alter, or repeal the Bylaws of the Corporation.
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ARTICLE NINTH
INDEMNIFICATION
The Corporation shall, to the fullest extent permitted by Section 145 of
the General Corporation Law of the State of Delaware, as the same may be amended
and supplemented, indemnify and hold harmless any and all persons who it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities, or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those stockholders, or disinterested
directors or otherwise, both as to action in his or her official capacity and as
to action in any other capacity while holding such office, and shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors, and administrators of such a person.
ARTICLE TENTH
BOARD OF DIRECTORS
Section A. Classified Board. The Board of Directors shall be divided into
three classes, as nearly equal in number as the then-authorized number of
directors constituting the Board permits, with the term of office of one class
expiring each year and with each director serving for a term ending at the third
annual meeting of stockholders following the annual meeting at which such
director was elected. One class of directors shall be initially elected for a
term expiring at the annual meeting of shareholders to be held in 1999, the
second class shall be initially elected for a term expiring at the annual
meeting of stockholders to be held in 2000 and the third class shall be
initially elected for a term expiring at the annual meeting of stockholders to
be held in 2001. Members of each class shall hold office until their successors
are elected and qualified. At each succeeding annual meeting of the stockholders
of the Corporation, the successors of the class of directors whose term expires
at the meeting shall be elected by a plurality vote of all votes cast at such
meeting to hold office for a term expiring at the annual meeting of stockholders
held in the third year following the year of their election. Any vacancy on the
Board resulting from the resignation or removal of a director may be filled by
the remaining members of the Board of Directors, and the director so chosen
shall hold office for the remainder of the full term of the resigning or removed
director's seat.
Section B. Vote Required for Modification of Classified Board. Any action
to amend or repeal this Article Tenth will require the affirmative vote of the
holders of 66- 2/3% of the outstanding shares of Common Stock, voting together
as a single class, unless such action has been previously approved by a majority
vote of the full Board, in which case the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock entitled to vote thereon will
be sufficient to amend or repeal any provision of this Article Tenth.
ARTICLE ELEVENTH
LIMITATION ON DIRECTOR LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law of the
State of Delaware, or (iv) for any transaction from which the director derived
any improper personal benefit. If the General Corporation Law of the State of
Delaware is amended after the filing of this Third Amended and Restated
Certificate of Incorporation to authorize corporate action further eliminating
or limiting the personal liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the General Corporation Law of the State of Delaware. No
modifications or repeal of the provisions of this Article Eleventh shall
adversely affect any right or protection of any director of the Corporation
existing at the date of such modification or repeal or create any liability or
adversely affect any such right or protection for any acts or omissions of such
director occurring prior to such modification or repeal.
ARTICLE TWELFTH
RIGHTS OF STOCKHOLDERS
From time to time any of the provisions of this Third Amended and
Restated Certificate of Incorporation may be amended, altered, or replaced, and
other provisions authorized by the laws of the State of Delaware at the
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<PAGE> 19
time in force may be added or inserted in the manner and at the time prescribed
by said laws, and all rights at any time conferred upon the stockholders of the
Corporation by this Certificate of Incorporation are granted subject to the
provisions of this Article Twelfth.
IN WITNESS WHEREOF, this Third Amended and Restated Certificate of
Incorporation which restates and integrates and also amends the provisions of
the Certificate of Incorporation of the Corporation and which has been duly
adopted in accordance with Sections 242 and 245 of the General Corporation Law
of the State of Delaware, as the Corporation has received payment for its
capital stock, has been executed by its President and Chief Executive Officer
and the Secretary this ____day of ________, 1999.
Objective Communications, Inc.
By:
---------------------------------
Name: James F. Bunker
Title: President and Chief
Executive Officer
Attest:
By:
---------------------------------
Name: Robert H. Emery
Title: Secretary
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<PAGE> 20
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OBJECTIVE COMMUNICATIONS, INC.
PROXY -- SPECIAL MEETING OF STOCKHOLDERS
MARCH 19, 1999
The undersigned, a stockholder of Objective Communications, Inc., a
Delaware corporation (the "Company"), does hereby appoint Robert H. Emery and
James F. Bunker, and each of them, the true and lawful attorneys and proxies
with full power of substitution, for and in the name, place and stead of the
undersigned, to vote all of the shares of Common Stock of the Company which the
undersigned would be entitled to vote if personally present at the Special
Meeting of Stockholders of the Company (the "Special Meeting") to be held at the
Company's principal executive offices, located at 50 International Drive,
Portsmouth, New Hampshire 03801, on Friday, March 19, 1999 at 10:00 A.M., local
time, or at any adjournment or adjournments thereof.
The undersigned hereby instructs said proxies or their substitutes:
PROPOSAL 1. TO APPROVE THE AMENDMENT AND RESTATEMENT OF THE CERTIFICATE OF
INCORPORATION TO IMPLEMENT A REVERSE STOCK SPLIT.
______ FOR _____ AGAINST _____ ABSTAIN
PROPOSAL 2. TO APPROVE A PROPOSAL TO PERMIT THE COMPANY TO ISSUE IN A PRIVATE
PLACEMENT SHARES OF COMMON STOCK (OR SECURITIES EXERCISABLE, CONVERTIBLE OR
EXCHANGEABLE FOR SHARES OF COMMON STOCK) IN EXCESS OF 20% OF THE OUTSTANDING
NUMBER OF SHARES OF COMMON STOCK.
______ FOR _____ AGAINST _____ ABSTAIN
3. DISCRETIONARY AUTHORITY:
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
AND FURTHER BUSINESS AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY INSTRUCTIONS GIVEN ABOVE. UNLESS
OTHERWISE INDICATED, THIS PROXY WILL BE VOTED "FOR" THE PROPOSED AMENDMENT AND
RESTATEMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION TO IMPLEMENT A REVERSE
STOCK SPLIT AND WILL BE VOTED "FOR" THE PROPOSAL TO PERMIT THE COMPANY TO ISSUE
IN A PRIVATE PLACEMENT SHARES OF COMMON STOCK (OR SECURITIES EXERCISABLE,
CONVERTIBLE OR EXCHANGEABLE FOR SHARES OF COMMON STOCK) IN EXCESS OF 20% OF THE
OUTSTANDING NUMBER OF SHARES OF COMMON STOCK.
The undersigned hereby revokes any proxy or proxies heretofore given, and
ratifies and confirms that all the proxies appointed hereby, or any of them, or
their substitutes, may lawfully do or cause to be done by virtue hereof. The
undersigned hereby acknowledges receipt of a copy of the Notice of Special
Meeting and Proxy Statement, both dated February 19, 1999.
Dated: _______________________, 1999
- -----------------------------
SIGNATURE
- -----------------------------
<PAGE> 21
SIGNATURE
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. WHEN SHARES ARE HELD BY MORE THAN ONE
OWNER, ALL OWNERS SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
PLEASE BE SURE TO DATE THIS PROXY.
