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 Section240.14a-12
IONIC FUEL TECHNOLOGY, INC.
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(Name of Registrant as Specified In Its Charter)
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(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.
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IONIC FUEL TECHNOLOGY, INC.
300 DELAWARE AVENUE
WILMINGTON, DELAWARE 19801
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To our Stockholders:
The Annual Meeting of Stockholders of Ionic Fuel Technology, Inc., a
Delaware corporation, will be held on July 11, 2000 at 10:30 a.m. local time, at
Fleet Bank, 345 Park Ave., New York, N.Y. to consider and act upon the following
matters, each of which is explained more fully in the following Proxy Statement.
A proxy card for your use in voting on these matters is also enclosed.
1. Electing three (3) directors for a term expiring in 2000 as RECOMMENDED
by the Board of Directors.
2. Ratifying the appointment of independent auditors to examine and report
on the financial statements of the Company for the year ending June 30,
2000, as RECOMMENDED by the Board of Directors.
3. To approve an amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 20 million
shares to 50 million shares, as RECOMMENDED by the Board of Directors.
4. Transacting any other business that may properly come before the meeting
or any adjournment thereof.
All shareholders are cordially invited to attend the meeting in person.
However, to ensure that each shareholder's vote is counted at the meeting,
shareholders are requested to mark, sign, date and return the enclosed proxy
card as promptly as possible in the envelope provided. Shareholders attending
the meeting may vote in person even if they have previously returned proxy
cards.
Only common stockholders of record at the close of business on May 26, 2000,
are entitled to notice of and to vote at the meeting.
Dated: May 26, 2000
BY ORDER OF
THE BOARD OF DIRECTORS
/s/ DUANE L. BERLIN
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Duane L. Berlin, SECRETARY
ANNUAL MEETING OF STOCKHOLDERS
OF
IONIC FUEL TECHNOLOGY, INC.
JULY 11TH, 2000
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PROXY STATEMENT
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GENERAL INFORMATION
PROXY SOLICITATION
This Proxy Statement is furnished to the holders of Common Stock, $.01 par
value per share ("Common Stock"), of Ionic Fuel Technology, Inc. ("Company") in
connection with the solicitation of proxies on behalf of the Board of Directors
of the Company for use at the Annual Meeting of Stockholders ("Annual Meeting")
to be held on July 11, 2000, or at any continuation or adjournment thereof,
pursuant to the accompanying Notice of Annual Meeting of Stockholders. The
purpose of the meeting and the matters to be acted upon are set forth in the
accompanying Notice of Annual Meeting of Stockholders. The Board of Directors
knows of no other business that will come before the meeting.
These proxy materials were mailed on or about June 12, 2000 and will be
solicited chiefly by mail, but additional solicitation may be made by telephone,
telegram or other means of telecommunications by directors, officers,
consultants or regular employees of the Company. The Company may enlist the
assistance of brokerage houses, fiduciaries, custodians and other like parties
in soliciting proxies. All solicitation expenses, including costs of preparing,
assembling and mailing the proxy material, will be borne by the Company.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the meeting and a return envelope for the proxy
are enclosed. Stockholders may revoke the authority granted by their execution
of proxies at any time before their effective exercise by filing with the
Secretary of the Company a written revocation or duly executed proxy bearing a
later date or by voting in person at the meeting. Shares represented by executed
and unrevoked proxies will be voted in accordance with the choice or
instructions specified thereon. If no specifications are given, the proxies
intend to vote "FOR" each of the nominees for director as described in Proposal
No. 1; "FOR" the appointment and ratification of the independent auditors as
described in Proposal No. 2; and "FOR" the amendment to the Company's
Certificate of Incorporation as described in Proposal No. 3. Abstentions and
broker non-votes will be treated as present for purposes of determining a quorum
for the Annual Meeting, but will not be counted for purposes of determining the
number of votes cast with respect to a proposal. In the election of directors,
the three directors shall be elected by a plurality of the votes cast. Proposal
2, Proposal 3 and other matters that come before the meeting shall be authorized
by a majority of votes cast. If any other matters properly come before the
meeting or any continuation or adjournment thereof, the proxies intend to vote
in accordance with their best judgment
RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on May 26, 2000 are
entitled to notice of and to vote at the Annual Meeting of Shareholders or any
continuation or adjournment thereof. Each share of Common Stock is entitled to
one vote per share. Any share of Common Stock held of record on May 26, 2000
shall be assumed, by the Board of Directors, to be owned beneficially by the
record holder thereof for the period shown on the Company's stockholder records.
The present directors and
officers of the Company holding approximately Eight and Four Tenths percent
(8.4%) of the outstanding Common Stock of the Company intend to vote "FOR" the
slate of directors, "FOR" the ratification of the appointment of the independent
auditors and "FOR" the amendment to the Company's Certificate of Incorporation.
NOMINEES FOR ELECTION
NAME, AGE AND PRINCIPAL OCCUPATION
ANTHONY J.S. GARNER, 60, has served as a Director and as President of the
Company, and as Chairman and Chief Executive Officer of IFT, Ltd. since both
companies' inceptions. Upon the resignation of Douglas F. Johnston on
December 1, 1999, Mr. Garner assumed the additional positions of Chairman and
Chief Financial Officer of the Company. From October 1991 to December 1991
Mr. Garner performed a due diligence investigation on the Wentworth Technology
underlying the IFT System (the "Wentworth Technology") in conjunction with
Mr. Johnston and Paul C. O'Neill, to determine whether to enter into the
business. From December 1990 until October 1991, Mr. Garner was a private
investor. From June 1988 until December 1990, Mr. Garner was Chief Executive
Officer and managing director of Sigma Corp. Ltd., a manufacturer of custom
gauges for the aerospace industry. He also served as Chief Executive Officer of
Winchmore PLC, a distributor of commercial boilers and air conditioners.
Mr. Garner has the U.K. equivalent of a B.S. in Mechanical Engineering.
FRANK J. HOLLENDONER, 53, has served as a Director since January, 1997.
Mr. Hollendoner also currently serves as Chairman of three European companies:
Doughty Hanson & Co., a money management concern; Independent Care Group, a firm
that develops, owns and operates private hospitals in Britain; and Norden Pac
Industries A.B., a Swedish packaging equipment company. From 1986 to 1994,
Mr. Hollendoner was a principal and a managing director of Ovington
Securities Ltd. Mr. Hollendoner holds a BA in Economics from Georgetown
University and an MBA from Stanford University School of Business.
HENRY W. SULLIVAN, 59, has served as a Director since August, 1997. Since
1991 Mr. Sullivan has been the President and a Director of GAIA
Technologies, Inc., a company engaged in the chemical business. He was also the
Vice Chairman and a Director of Huntsman Chemical Corporation, the nation's
largest private chemical company, from 1983 to 1991. Mr. Sullivan holds a B.S.
degree in Chemical Engineering from Cooper Union and a Masters degree and Ph.D
in Engineering from New York University.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Under United States securities laws, the Company's directors and officers
and persons who own more than ten percent (10%) of the Company's Common Stock
are required to file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission. Based solely on its
review of copies of such reports received or written representations from
certain reporting persons, the Company believes that during the fiscal year
ended June 30, 1999, all filing requirements under section 16(a) of the
Securities Exchange Act of 1934 applicable to its directors and officers and
holders of more than ten percent (10%) of the Company's Common Stock were
complied with.
During fiscal 1999 the Board of Directors held three meetings and did not
act by unanimous written consent.
The Company has two committees of the Board: a Compensation Committee
consisting of Mr. Sullivan as Chairman and Mr. Hollendoner as member, and an
Audit Committee consisting of Mr. Hollendoner as Chairman and Messrs. Garner and
Sullivan as members.
No directors received cash compensation for serving as directors during the
fiscal year ended June 30, 1999. It is anticipated that no existing directors
will receive cash compensation for serving in such capacity during the fiscal
year ending June 30, 2000.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
On May 26, 2000, there were 15,924,988 shares of Common Stock outstanding.
The following table sets forth as of March 15, 2000 the number of shares of
Common Stock of the Company and the percentage of that class owned beneficially,
within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act
of 1934, as amended, and the percentage of the Company's voting power owned by
(i) all the directors of the Company who are stockholders; (ii) all stockholders
known by the Company to own more than five percent of the Company's Common
Stock; and (iii) all directors and officers as a group. All shares set forth in
the following table are entitled to one vote per share and the named beneficial
owner has sole voting and investment power.
AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL OUTSTANDING SHARES
NAME AND ADDRESS OWNERSHIP (1) OF COMMON STOCK
- ---------------- ------------- ------------------
Douglas F. Johnston......................................... 1,033,800 6.5%
114 Forest Street
New Canaan, CT 06840
Anthony J.S. Garner......................................... 567,000(2) 3.6%
96 Thorpe Hall Ave
Thorpe Bay, Essex SSl 3AS
England
Frank J. Hollendoner........................................ 770,000 4.8%
c/o Independent Care
26 Eccleston Square
London, England SWIV INS
Henry W. Sullivan........................................... 16,000(3) *
10814 Jaycee Lane
Houston, TX 77024
All Officers and Directors
as a Group (3 persons)...................................... 1,353,000 8.5%
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* Less than 1%
(l) Beneficial ownership is determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934 and generally includes voting or investment
power with respect to securities. Shares of Common Stock issuable upon the
exercise of options, warrants and convertible notes currently exercisable or
convertible within sixty days are deemed outstanding for computing the
percentage ownership of the person holding such options or warrants, but are
not deemed outstanding for computing the percentage of ownership of any
other person.
Unless otherwise indicated, the Company believes that all persons named in
the table have sole investment and voting power with respect to the shares
of Common Stock beneficially owned by them.
(2) Includes immediately exercisable options to purchase 160,000 shares at
$1.875 per share granted to Mr. Garner by Mr. Johnston and Paul C. O'Neill
from their personal holdings. Also includes 170,000 shares of Common Stock
held by Brutus Investments Ltd., an investment company owned by Brutus
Trust. Mr. Garner is neither an officer nor director of Brutus
Investments, Ltd. nor a settlor, trustee or currently a beneficiary of
Brutus Trust. To the extent he or any member of his family may become a
beneficiary of Brutus Trust in the future, Mr. Garner disclaims any
beneficial interest in such shares.
2
(3) Includes 2,000 shares of Common Stock and immediately exercisable options to
purchase 14,000 shares of Common Stock at $1.75 per share.
EXECUTIVE COMPENSATION
COMPENSATION
No executive officer received aggregate compensation exceeding $100,000 in
the fiscal year 1999.
CERTAIN TRANSACTIONS
Pursuant to written agreement, the Company accepted the resignation of
Douglas F. Johnston as a member and the Chairman of the Company's board of
directors and as the Company's Chief Financial Officer as of December 1, 1999.
Anthony J.S. Garner was designated and appointed Chief Financial Officer of the
Company and Chairman of the board of directors to serve until a successor or
successors has been duly nominated and elected or appointed to such positions.
Pursuant to written agreement, as of September 1,1999, the Company
terminated the accrual and payment to Mr. Johnston of any royalties, including
but not limited to that certain "over ride royalty of $5,000 per month on the
Wentworth license" referred to in the Minutes of the First Meeting of the Board
of Directors of the Company dated January 21, 1992.
On May 8, 2000 the Audit Committee of the Company's Board of Directors
recommended, and the Company's Board of Directors approved, the engagement of
the independent certified public accounting firm of BDO Stoy Hayward to audit
the consolidated financial statements of the Company for the year ended
June 30, 2000. Accordingly, the Company accepted the resignation of Ernst &
Young LLP as the Company's independent auditors.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The By-Laws of the Company provide for a Board of Directors of not less than
three (3) members. The Board of Directors currently consists of three
(3) members. At the meeting, three directors will be elected to serve until the
2000 Annual Meeting of Stockholders and until their successors have been elected
and qualified. Present vacancy or vacancies that occur during the year may be
filled by the Board of Directors, and any directors so appointed must stand for
reelection at the next annual meeting of stockholders. The nominees to be voted
on by stockholders are Messrs. Garner, Hollendoner and Sullivan.
The Company's present directors have nominated all current directors for
re-election. All nominees have consented to be named and have indicated their
intent to serve if elected. The Company has no reason to believe that any of
these nominees are unavailable for election. However, if any of the nominees
become unavailable for any reason, the persons named as proxies may vote for the
election of such person or persons for such office as the Board of Directors of
the Company may recommend in the place of such nominee or nominees. It is
intended that proxies, unless marked to the contrary, will be voted in favor of
the election of Messrs. Garner, Hollendoner and Sullivan.
Three directors shall be elected by a plurality of the votes cast.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION OF THE ABOVE-REFERENCED THREE NOMINEES (ITEM NO. 1 ON THE PROXY CARD).
3
PROPOSAL NO. 2
RATIFICATION OF ACCEPTANCE OF RESIGNATION AND
APPOINTMENT OF INDEPENDENT AUDITORS
On May 8, 2000, the Board of Directors accepted the resignation of the firm
of Ernst & Young LLP as independent auditors, and subsequently appointed BDO
Stoy Hayward as independent auditors to examine and report on the consolidated
financial statements of the Company for the year ending June 30, 2000, subject
to stockholder approval.
For the fiscal year ending June 30, 2000 and going forward, BDO Stoy Hayward
will provide the Company with audit services, including examinations of and
reporting on the Company's consolidated financial statements, as well as those
of its subsidiaries. Audit services also include a review of filings with the
Securities and Exchange Commission and the annual report to shareholders.
Ratification of the acceptance of the resignation of Ernst & Young LLP and
the appointment of BDO Stoy Hayward as independent auditors shall be authorized
by a majority of votes cast.
No representative of Ernst & Young LLP or BDO Stoy Hayward will be present
at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE ACCEPTANCE OF THIS RESIGNATION AND APPOINTMENT (ITEM NO. 2
ON THE PROXY CARD).
PROPOSAL NO. 3
APPROVAL OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION
The Board is proposing an amendment (the "Amendment") to the Company's
Certificate of Incorporation (the "Certificate") to increase the number of
authorized shares of Common Stock from 20 million shares to 50 million shares of
Common Stock.
The Certificate currently authorizes the Company to issue 20 million shares
of Common Stock. As of May 26, 2000, approximately 15,924,988 shares of Common
stock were outstanding. Of the remaining authorized but unissued shares,
approximately 805,600 were reserved for issuance under the Company's stock
option and employee stock purchase plans. Accordingly, the Company has
approximately 3,269,412 shares remaining available for issuance. If the proposed
amendment is approved, 30 million additional shares of Common Stock would be
authorized but unissued. These additional authorized shares of Common Stock
would be available for various business purposes such as financings,
acquisitions, employee benefit plans, stock splits and stock dividends. The
issuance of additional shares of Common Stock, other than in connection with
stock splits and stock dividends, could have the effect of diluting earnings per
share, voting power and shareholdings of stockholders. It could also have the
effect of making it more difficult for a third party to acquire control of the
Company. Other than in connection with the Company's existing employee stock
option and stock purchase plans, the Company has no present intent to issue any
shares of Common Stock. Upon approval by the shareholders, the fourth paragraph
of the Certificate will be amended to read in its entirety as follows:
"FOURTH: The total number of shares of stock which the Corporation
shall have the authority to issue is 50 million shares of Common Stock,
$0.01 par value."
Ratification of the Amendment shall be authorized by a majority of votes
cast.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
AMENDMENT (ITEM NO. 2 ON THE PROXY CARD).
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OTHER BUSINESS TO BE TRANSACTED
As of the date of this Proxy Statement, the Board of Directors knows of no
other business to be presented for action at the Annual Meeting of Stockholders.
As for any business that may properly come before the Annual Meeting or any
continuation or adjournment thereof, the Proxies confer discretionary authority
to the person named therein. These persons will vote or act in accordance with
their best judgment with respect thereto.
ANNUAL REPORT TO STOCKHOLDERS
The Annual Report to Stockholders for the year ended June 30, 1999 is being
mailed to stockholders with this Proxy Statement.
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STOCKHOLDER PROPOSALS--2000 ANNUAL MEETING
Any stockholder proposals to be considered by the Company for inclusion in
the proxy material for the 2000 Annual Meeting of Stockholders must be received
by the Company at its principal executive offices by October 31, 2000.
The prompt return of your proxy will be appreciated and helpful in obtaining
the necessary vote. Therefore, whether or not you expect to attend the meeting,
please sign the proxy and return it in the enclosed envelope.
BY ORDER OF
THE BOARD OF DIRECTORS
/s/ DUANE L. BERLIN
---------------------------------------------
Duane L. Berlin, SECRETARY
New York, New York
May 26, 2000
IONIC FUEL TECHNOLOGY, INC.
P R O X Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Anthony J.S. Garner Proxy, with the power to
appoint his substitute, and hereby authorizes him to represent and to vote, as
designated below, all the shares of the common stock of Ionic Fuel
Technology, Inc. held of record by the undersigned on May 26, 2000, at the
annual meeting of shareholders to be held on July 11, 2000, or any adjournment
thereof.
1. ELECTION OF DIRECTORS For all nominees listed below Withhold Authority to
(Except as Marked to the Contrary) / / Vote All Nominees Listed Below / /
Frank J. Hollendoner; Henry W. Sullivan and Anthony J.S. Garner
(To withhold authority for any individual nominee, strike that nominee's name
from the list above)
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
FOR / / AGAINST / / ABSTAIN / /
3. APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
FOR / / AGAINST / / ABSTAIN / /
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, 3 AND authorize Mr. Garner to vote upon such other
business as may properly come before the meeting.
Please sign name exactly as appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as 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.
Dated: ________________________
_______________________________
Signature
_______________________________
Signature, if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY USING THE ENCLOSED ENVELOPE