INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ x ] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
PL BRANDS, INC.
(Name of Registrant as Specified in Its Charter)
PL Brands, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] 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: N/A
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(4) Date filed: N/A
PL BRANDS, INC.
421 North Wabasha Street
Suite 260
St. Paul, Minnesota 55102
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 22, 2001
To the Stockholders:
PLEASE TAKE NOTICE that a Special Meeting of Stockholders (the
"Special Meeting") of PL Brands, Inc. (the "Company") will be held on
March 22, 2001, at 1:00 p.m., local time, at the St. Paul Hotel, 350 Market
Street, St. Paul, Minnesota 55102, for the following purposes:
1. To elect six Directors to serve as the Board of Directors
of the Company until the next Annual Meeting of Stockholders and until
their successors shall be elected and shall qualify;
2. To change the name of the Company from "PL Brands, Inc." to
"Othnet, Inc." (the "Corporate Name Change");
3. To authorize an amendment to the Certificate of
Incorporation of the Company to increase the number of authorized shares
of Common Stock and Preferred Stock (the "Capitalization Amendment");
4. To ratify the selection of Deloitte Touche, LLP as the
Company's independent auditors; and
5. To transact such other business as may properly come before
the Special Meeting or any adjournment thereof.
The close of business on February 16, 2001 has been fixed as the
record date for determining stockholders entitled to receive notice of and
to vote at the Special Meeting and at any adjournment thereof.
Your attention is called to the proxy statement on the following
pages. We hope that you will attend the Special Meeting. If you do not
plan to attend, please sign, date and mail the enclosed proxy card in the
enclosed envelope, which requires no postage if mailed in the United
States.
By Order of the Board of Directors,
Richard A. Barbari,
Chairman
St. Paul, Minnesota
February 27, 2001
PL BRANDS, INC.
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 22, 2001
_____________________________
INTRODUCTION
This Proxy Statement is being furnished to stockholders of PL
Brands, Inc., a Delaware corporation (the "Company"), in connection with
the solicitation of proxies by the Board of Directors of the Company (the
"Board of Directors") for use at a Special Meeting of Stockholders of the
Company to be held on March 22, 2001, at 1:00 p.m., local time, at the St.
Paul Hotel, 350 Market Street, St. Paul, Minnesota 55102, and at any
adjournment thereof (the "Special Meeting").
The Board has fixed the close of business on February 16, 2001 as
the record date for the determination of stockholders entitled to receive
notice of, and vote at, the Special Meeting (the "Record Date").
Accordingly, only stockholders of record on the books of the Company at
the close of business on the Record Date will be entitled to vote at the
Special Meeting. On the Record Date, the Company had outstanding
approximately 16,899,279 shares of Common Stock, par value $.001 per share
(the "Common Stock") which are the only outstanding voting securities of
the Company. On all matters, each share of Common Stock is entitled to
one vote.
The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, officers, directors and other employees
of the Company may solicit proxies by personal contact, telephone,
facsimile or other electronic means without additional compensation. This
Proxy Statement and the accompanying proxy card are first being mailed to
stockholders on or about February 27, 2001.
Proxies in the accompanying form which are properly executed, duly
returned and not revoked, will be voted in accordance with the
instructions thereon. If no instructions are indicated thereon, proxies
will be voted FOR all matters listed in the Notice of Special Meeting of
Stockholders and in accordance with the discretion of the person(s) voting
the proxies with respect to all other matters properly presented at the
Special Meeting. Execution of a proxy will not prevent a stockholder from
attending the Special Meeting and voting in person. Any stockholder
giving a proxy may revoke it at any time before it is voted by delivering
to the Secretary of the Company written notice of revocation bearing a
later date than the proxy, by delivering a later-dated proxy, or by voting
in person at the Special Meeting. Attendance at the Special Meeting will
not, in and of itself, constitute revocation of a proxy. The holders of a
majority of the shares of Common Stock outstanding and entitled to vote
as of the Record Date, present in person or represented by proxy, shall
constitute a quorum for the transaction of business at the Special
Meeting. A plurality of the votes cast at the Special Meeting will be
required for the election of directors. Approval of the Corporate Name
Change and Capitalization Amendment requires the affirmative vote of a
majority of the outstanding shares entitled to vote thereon. The
ratification of the selection of Deloitte Touche, LLP as independent
auditors requires the affirmative vote of a majority of the votes cast at
such meeting. If a stockholder, present in person or represented by
proxy, abstains on any matter, the stockholder's shares will not be voted
on such matter. Thus, an abstention from voting on a matter has the same
legal effect as a vote "against" the matter, even though the stockholder
may interpret such action differently.
Information Concerning The Company
The Company was originally incorporated under the name "Malone
Road Investments, Ltd." on August 6, 1990 in the Isle of Man. The
Company was redomesticated in the Turks and Caicos Islands on April 21,
1992, and subsequently domesticated as a Delaware corporation on May 12,
1994. Pursuant to Delaware law the Company is deemed to have been
incorporated in Delaware as of August 6, 1990. The Company changed its
name to PL Brands, Inc. on June 6, 1994.
The Company's principal business was initially in development,
production and marketing of private label prepared foods. Prior to
January 1, 1994 the Company's activities were primarily limited to
research and development of its business plan and recruitment of
personnel. Full-time operations began in March 1994. On August 19, 1994
the Company purchased 100% of the outstanding shares of Alma Pack Bottling
Corporation ("Alma Pack"). Until January 1998, Alma Pack's bottling
business comprised the Company's principal operation. Under this strategy,
the Company was never able to attain profitability and the continued
stockholders' deficiency raised doubt about the Company's ability to
continue as a going concern.
In 1998 the Company revised its strategy and sold all of the
shares of Alma Pack and acquired all of the issued and outstanding shares
(the "Gandalf Shares") of Gandalf Graphics Limited ("Gandalf") from
Marcella Downey ("Downey") for Canadian $400,000 which was paid by issuing
a promissory note to Downey for Canadian $400,000 (the "Note") with the
principal due and payable on January 1, 2000. Gandalf provided digital
pre-press services and digital print services. Pursuant to an agreement
made as of May 1, 1999 wherein the Company acknowledged that it had not
and would not repay the principal amount of the Note and any accrued and
unpaid interest to Downey on January 1, 2000, the parties decided to
resolve any controversy that would result from the inability of the
Company to pay, and agreed that Downey return the Note to the Company in
exchange for the return of the Gandalf Shares.
From January 1998 through the end of the fiscal 1999, the business
of Gandalf comprised the Company's principal operation. During the fiscal
year ended April 30, 2000, the Company had no material business
operations.
In May 2000, the Company entered into an agreement to acquire
substantially all of the assets of Oth.net, Inc., a Florida corporation,
as well as the Oth.net domain name, in exchange for 4,500,000 shares of
the Company's Common Stock and $500,000, which funds were paid on June 30,
2000. Oth.net, Inc. is an internet based search engine for music on the
world wide web. In addition, during the quarter ended July 31, 2000, the
Company sold 1,000,000 and 756,000 restricted shares of Common Stock at
$.50 and $3.00, respectively, to a total of nine investors for an
aggregate consideration of $2,768,000 and issued an aggregate of 1,500,000
restricted shares of Common Stock to certain persons in connection with
employment arrangements and other services rendered after April 30, 2000
and cash in the aggregate amount of $1,500. Such funds will be used for
operations and development of the business resulting from the acquisition
of substantially all of the assets of Oth.net, Inc.
As a result of such acquisition, the Company intends to expand the
Oth.net business from primarily an internet based search engine for music
on the world wide web to a more diverse digital entertainment business
organization providing music, video and movie content on the internet.
The Company is in the process of rewriting its web site and is developing
new software that will be directed at the peer-to-peer environment. No
assurance can be given that the Company's business will prove to be
successful or that it will be able to operate profitably.
PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of the Record Date, certain
information with regard to the record and beneficial ownership of the
Company's Common Stock by (i) each stockholder owning of record or
beneficially 5% or more of the Company's Common Stock, (ii) each director
of the Company and each person nominated to be a Director, (iii) the
Company's Chief Executive Officer and other executive officers, if any, of
the Company whose annual base salary and bonus compensation was in excess
of $100,000 (the "named executive officers"), and (iv) all officers and
directors of the Company as a group:
Amount and Nature of Percent
Name Beneficial Owership of Class
Christopher J. Pearson 2,760,000 (1) 16.3%
Benjamin S. Houge 1,015,000 (2) 6.0%
Rabobank Asia Ltd. 1,000,000 (3) 5.9%
Richard A. Barbari 650,000 (4) 3.8%
Robert Brown 5 (5) *
Louis Fornetti - (6) -
Anthony L. Rafel - (7) -
Roland D. Pampel - (8) -
All Officers and Directors
Directors as a Group 3,410,005 20.2%
________________________
* Less than one (1%) percent.
(1) The address for Mr. Pearson is 421 North Wabasha Street, Suite
260, St. Paul, Minnesota.
(2) Consists of 600,000 shares held by Mr. Houge, and 175,000 shares
held by D&T Partners and 240,000 shares held by Spokane Partners.
Mr. Houge is a partner of both partnerships. The address for
Mr. Houge is 310 Fourth Avenue South, Minneapolis, Minnesota.
(3) Its address is 77 Robinson Road, SIA Building, Singapore.
(4) Consists of 400,000 shares held by Mr. Barbari and 250,000 shares
held by his wife. The address for Mr. Barbari is 421 North
Wabasha Street, Suite 260, St. Paul, Minnesota.
(5) The address for Mr. Brown is 260 Bartley Drive, Toronto, Ontario,
Canada.
(6) The address for Mr. Fornetti is 13153 Hannover Court, Apple
Valley, Minnesota.
(7) The address for Mr. Rafel is 1001 Fourth Avenue Plaza, Seattle,
Washington.
(8) The address for Mr. Pampel is 686 Katemore Lane, Naples, Florida.
ELECTION OF DIRECTORS
Proposal 1
A Board of Directors consisting of six members is to be elected by
the stockholders, to hold office until the next Annual Meeting of
Stockholders and until their successors are duly elected and qualify.
Unless authority is withheld, it is intended that proxies will be
voted for the election of the six nominees below, all of whom are
currently serving as directors. The Board of Directors does not
contemplate that any of these nominees will be unable or will decline to
serve. However, if any of them is unable or declines to serve, the
persons named in the accompanying proxy may vote for another person or
persons in their discretion.
Information Concerning Nominees
The following table sets forth certain information with respect to
the six nominees for election to the Board of Directors.
Present Position Has Served as
Name Age and Offices Director Since
Richard A. Barbari 61 President, Chief Executive 2001
Officer and Chairman
Christopher J. Pearson 24 Vice President 2001
Louis Fornetti 50 Director 2001
Anthony L. Rafel 45 Director 2001
Roland D. Pampel 65 Director 2001
Robert Brown 40 Treasurer and Director 1994
RICHARD A. BARBARI has been President, Chief Executive Officer,
Chairman and Director of the Company since February 2001 and an employee
of the Company since August 2000. From June 1998 to August 2000, Mr.
Barbari was Vice President and then Global Accounts Executive for Compaq
Computer Corp. and from May 1994 to June 1998 he was Executive Vice
President, Worldwide Marketing and International Sales of Microcom Inc.
which was acquired by Compaq Computer Corp. From 1991 to 1994 Mr. Barbari
held positions at Nicolet Instruments Inc. including Director of the Test
Instruments Division. Prior thereto, he was Chief Executive Officer and
Chairman of Ultimap Corp., a publicly held GIS software company.
CHRISTOPHER J. PEARSON has been Vice President and a Director of
the Company since February 2001 and an employee of the Company since
August 2000. Since 1995, Mr. Pearson has been an internet software
developer and was the founder of the Oth.net business which was acquired
by the Company as of June 2000.
LOUIS FORNETTI has been a Director of the Company since February
2001. From 1995 to 1998, Mr. Fornetti was Executive Vice-President and
Chief Financial Officer of Dain Rauscher Inc. (formerly Interra
Financial), a securities brokerage and investment banking firm. He also
served as President and Chief Executive Officer of Interra Clearing
Services. Prior to Dain Rauscher, Mr. Fornetti spent 10 years with
American Express Financial Advisor, with his last position there as Senior
Vice-President, Chief Financial Officer and a member of the Board of
Directors. Mr. Fornetti was Vice-President and Corporate Controller of The
St. Paul Companies from 1979 to 1985. Prior thereto, from 1972 to 1979, he
was a Certified Public Accountant and Audit Manager with KPMG, a national
public accounting firm. He currently serves as Chairman of the Board of I-
Pool Corporation and a Board Member and Treasurer of CLUES, a social
service agency. He holds certifications from the Minnesota Society of
Certified Public Accountants and the American Institute of Certified
Public Accountants.
ANTHONY L. RAFEL has been a Director of the Company since February
2001. Mr. Rafel is an attorney licensed to practice in New York, New
Jersey and Washington State. He is past president of the Federal Bar
Association of the Western District of Washington and current chair of its
Website/Communications Committee. He also serves as a lawyer
representative to the Ninth Circuit Judicial Conference, and as a member
of the Civil Justice Reform Act Advisory Group for the Western District of
Washington. Mr. Rafel was a state Bar Examiner in Washington from 1994-
1998. Mr. Rafel is a trial lawyer and principal in the Seattle law firm
of Riddell Williams P.S. since May 2000. From 1995 to April 2000, he was
a principal in Rohan Goldfarb Rafel & Shapiro, P.S. He also serves on the
board of directors of Image Technology Corporation, an Internet provider
of court records and briefs.
ROLAND D. PAMPEL has been a Director of the Company since February
2001. Mr. Pampel is retired. From March 1994 to January 1997, Mr. Pampel
held the positions of President, Chief Executive Officer and director of
Microcom Inc. ("Microcom"), a manufacturer of computer equipment. From
October 1991 to September 1993, prior to joining Microcom, Mr. Pampel was
President and Chief Executive Officer of Nicolet Instrument Inc., a
manufacturer of medical instruments. He currently serves on the Board of
Directors of Infinium Software, Inc., a provider of client-server business
software applications, and Peritus Software Services, Inc., a provider of
software products and services. He is also a member of the Board of
Trustees of the National Public Radio Foundation.
ROBERT BROWN has been a Director and Treasurer of the Company
since May 1994 and was Vice President - Finance and Secretary from May
1994 to February 2001. Since 1998, Mr. Brown has also been Chief
Financial Officer of Gandalf Graphics Limited, a former subsidiary of the
Company.
The Company's Executive Officers
There are no executive officers of the Company other than those
named above, except David M. Kaye, age 46, Secretary of the Company.
DAVID M. KAYE has been Secretary of the Company since February
2001. Mr. Kaye is an attorney and has been a partner in the law firm of
Danzig Kaye Cooper & Fiore, LLP (formerly Danzig Garubo & Kaye, LLP)
located in Florham Park, New Jersey, since the firm's inception in
February 1996. Such firm provides certain legal services to the Company.
Since 1980, Mr. Kaye has been a practicing attorney in the New York City
metropolitan area specializing in corporate and securities matters. He is
currently a director of Nutrition Now, Inc., a company which manufactures
and markets nutritional products, and Dionics, Inc., a company which
designs, sells and manufactures semi-conductor electronic products.
Executive Compensation
No compensation was paid by the Company to any executive officer
prior to April 30, 1994. In fiscal 2000 and 1999, respectively, Andre
Corbeil, formerly the Chief Executive Officer of the Company, was paid
$63,000 and $50,000, Robert Brown, formerly Chief Financial Officer
(currently Treasurer and Director), was paid $33,000 and $33,000, Larry
Downey, formerly Chief Operating Officer, was paid $28,000 and $18,000.
In Fiscal 2000, there are no other forms of long term or other
compensation. See " - Employment Contracts and Termination of Employment
and Change in Control Arrangements" for information on the employment
contracts entered into with Richard A. Barbari and Christopher J. Pearson
subsequent to the end of fiscal 2000.
Compensation of Directors
During the fiscal year ended April 30, 2000, no director of the
Company received any cash compensation for his services as such. In the
past, directors have been and will continue to be reimbursed for
reasonable expenses incurred on behalf of the Company. The Company
anticipates that at some time in the near term it may adopt a compensation
arrangement for non-employee directors which may include a certain amount
of cash compensation for serving on the Board as well as stock options.
As of the date hereof, no such arrangements have been made.
Employment Contracts and Termination of Employment and Change in Control
Arrangements
Richard A. Barbari , President and Chief Executive Officer of the
Company, is employed pursuant to an employment agreement expiring August
2002 at an annual base salary of $250,000 per year. The agreement
provides that his base salary will be reviewed on an annual basis and any
modifications thereto will be subject to the discretion of the Company,
but at no time will the base salary be reduced below the initial level.
The agreement also provides that Mr. Barbari will be eligible to
participate in the Company's bonus plan or stock option plan, when and if
established. The Company has also agreed to provide Mr. Barbari with an
automobile allowance, health and life insurance and certain other
benefits. The agreement provides that at its second anniversary date it
may be extended for a period of one year by mutual agreement of the
parties. See, also " - Transactions with Management and Others" for
information on the shares of Common Stock purchased by Mr. Barbari and his
nominees.
Christopher J. Pearson, Vice President of the Company, is employed
pursuant to an employment agreement at an annual base salary of $125,000
per year. The agreement has a term of at least two years (until August
2002) and thereafter until terminated by either party thereto. The
agreement provides that his base salary will be reviewed on an annual
basis and any modifications thereto will be subject to the discretion of
the Company, but at no time will the base salary be reduced below the
initial level. The agreement also provides that Mr. Pearson will be
eligible to participate in the Company's bonus plan or stock option plan,
when and if established. The Company has also agreed to provide Mr.
Pearson with health and life insurance and certain other benefits.
The Company does not have any termination or change in control
arrangements with any of its named executive officers, except that the
employment agreement with Mr. Barbari provides that in the event his
employment is terminated (other than for cause) or there occurs a
change of control prior to August 2002, the Company shall pay Mr.
Barbari his entire salary, bonuses and other compensation that would be
owed through the end of August 2002 if his employment had not been
terminated or there had not occurred a change of control.
In addition, any partially or unvested options, if any, shall
become fully vested at termination of employment.
Transactions with Management and Others
In 1998, the advances from related parties which were due to
directors, were non-interest bearing, unsecured and had no fixed terms of
repayment. During 1999, the advances were repaid. During 2000, the
Company paid rent of $Nil (1999 - $33,145; 1998 - $17,470) to a company
owned by the spouse of a former director of the Company. During the 1999
fiscal year, the Company purchased capital assets in the amount of
$390,490 from a company that is 100% owned by one of the Company's former
directors and former chief operating officer. The transactions are
measured under normal trade terms and conditions. As at April 30, 2000,
$Nil (1999 - $135,357) of this amount is included in accounts payable.
In 1998, the Company acquired all of the issued and outstanding
shares (the "Gandalf Shares") of Gandalf Graphics Limited ("Gandalf")
from Marcella Downey ("Downey") for Canadian $400,000 which was paid by
issuing a promissory note to Downey for Canadian $400,000 (the "Note")
with the principal due and payable on January 1, 2000. Pursuant to an
agreement made as of May 1, 1999 wherein the Company acknowledged that it
has not and shall not repay the principal amount of the Note and any
accrued and unpaid interest to Downey on January 1, 2000, the parties
decided to resolve any controversy that would result from the inability of
the Company to pay, and agreed that Downey return the Note to the Company
in exchange for the return of the Gandalf Shares. Marcella Downey is the
spouse of Larry Downey, a former director and officer of the Company.
In May 2000, the Company entered into an agreement to acquire
substantially all of the assets of Oth.net, Inc., a Florida corporation
(founded by Christopher Pearson), as well as the Oth.net domain name, in
exchange for 4,500,000 shares of the Company's Common Stock and $500,000,
which funds were paid to Christopher Pearson on June 30, 2000. Mr.
Pearson received 2,760,000 of the 4,500,000 shares issued in connection
with such transaction.
During the same period of time as the purchase of the Oth.net
assets and the Oth.net domain name, an employment arrangement was made
between the Company and Richard Barbari who has been engaged by the
Company. See " - Employment Contracts and Termination of Employment and
Change in Control Arrangements". As enticement to join the Company, Mr.
Barbari and his nominees purchased 1,000,000 restricted shares of the
Company's Common Stock at $.001 per share.
See " - Employment Contracts and Termination of Employment and
Change in Control Arrangements" for information on the employment
contracts entered into with Richard A. Barbari and Christopher J. Pearson.
Material Proceedings
There are no material proceedings to which any director or
executive officer of the Company is a party adverse to the Company or any
if its subsidiaries or has a material interest adverse to the Company or
any of its subsidiaries.
Additional Information
During the fiscal year ended April 30, 2000, the Board of
Directors of the Company held no formal meetings. However, the Board of
Directors took action by unanimous written consent and met informally on
other occasions during the period. The Company does not currently have a
standing audit or nominating committee, or a compensation committee,
although it is anticipated that at some time in the near term the Board of
Directors may appoint an audit and a compensation committee to serve at
the direction of the Board.
PROPOSED CORPORATE NAME CHANGE
Proposal 2
At the Special Meeting, holders of shares of Common Stock will be
asked to consider and vote upon a proposal to change the name of the
Company from "PL Brands, Inc." to "Othnet, Inc." (the "Corporate Name
Change"), by means of an amendment to the Company's Certificate of
Incorporation. The Board of Directors has adopted resolutions approving
the Corporate Name Change and recommending that the Corporate Name Change
be submitted to the Stockholders for their approval at the Special
Meeting. If the proposed amendment to the Certificate of
Incorporation is approved by the requisite number of shares of Common
Stock entitled to vote at the Special Meeting, the Corporate Name Change
and the proposed amendment to the Company's Certificate of Incorporation
will become effective upon the filing of a Certificate of Amendment to the
Certificate of Incorporation with the Secretary of State of Delaware,
which is expected to occur shortly after Stockholder approval.
As a result of the acquisition of substantially all of the assets
of Oth.net, Inc., a Florida corporation, as well as the Oth.net domain
name, the business of Oth.net has become the Company's primary business
operation. As a result of such acquisition, the Company intends to expand
the Oth.net business from primarily an internet based search engine for
music on the world wide web to a more diverse digital entertainment
business organization providing music, video and movie content on the
internet. Accordingly, management believes that with the name "PL Brands,
Inc.", there is no clear relationship to the Company's current business
activities. Management believes that there is already substantial name
recognition among the public for the name "Othnet" and that, as a result
of the Corporate Name Change, the Company may develop a clearer and more
recognizable identity in the marketplace.
The Board of Directors believes that the Corporate Name Change,
and accordingly the proposed amendment, are in the best interests of the
Company and its stockholders and recommends that the stockholders approve
the Corporate Name Change and the proposed amendment of the Company's
Certificate of Incorporation.
The affirmative vote of the holders of a majority of the
outstanding shares of Common Stock is required for approval of the
Corporate Name Change and the proposed amendment of the Certificate of
Incorporation.
The text of the proposed amendment to the Certificate of
Incorporation is as follows:
That the FIRST Article of the Certificate of Incorporation be and
it hereby is amended to read in its entirety as follows:
"FIRST: The name of the Corporation is Othnet, Inc."
The Board of Directors recommends a vote "for" the approval of
the Corporate Name Change and the related amendment to the Certificate of
Incorporation
PROPOSED INCREASE IN THE COMPANY'S AUTHORIZED SHARES
OF COMMON STOCK AND PREFERRED STOCK
Proposal 3
The Board of Directors has unanimously adopted a resolution
declaring it advisable to amend the FOURTH Article of the Company's
Certificate of Incorporation to provide for an increase in the number of
authorized shares of Common Stock from 20,000,000 shares of Common Stock,
$0.001 par value, to 40,000,000 shares and an increase in the number of
authorized shares of Preferred Stock from 1,000,000 shares of Preferred
Stock, $0.001 par value, to 2,000,000 shares (the "Capitalization
Amendment"), and has directed that the resolution be submitted to a vote
of the stockholders. If the proposed amendment is approved by the
affirmative vote of holders of a majority of the Company's outstanding
shares, the authorized capital stock of the Company will consist of
40,000,000 shares of Common Stock $0.001 par value, and 2,000,000 shares
of Preferred Stock, $0.001 par value, issuable in series.
The Company is presently authorized to issue 20,000,000 shares of
its Common Stock of which 16,899,279 are currently outstanding, leaving
3,100,721 shares of Common Stock available; and the Company is presently
authorized to issue 1,000,000 shares of Preferred Stock of which no shares
are currently outstanding.
The Board of Directors believes that the growing complexity of
modern business financing requires greater flexibility in the Company's
capital structure than now exists. The availability of additional shares
might be used for general corporate purposes such a raising capital,
acquisitions or attempting to obtain, retain and reward skilled management
by establishing stock options and other stock-related benefit plans.
Increasing the number of shares available for issuance would also permit
the Board, if and when it deemed it advisable, if at all, to declare a
stock split or stock dividend.
Management recognizes that the Company's present funds, together
with any operating revenues that may be recognized in the immediate
future, may be insufficient to fully implement the business plan of the
Company. Thus, substantial additional capital will, in all likelihood, be
needed in order to fund operations. In this regard, it is anticipated
that a certain portion of the additional authorized shares of Common Stock
and Preferred Stock as contemplated by the Capitalization Amendment will
be needed in order to meet such funding requirements. Management has had
preliminary discussions with certain parties and investment banking firms
concerning capital raising possibilities in the future but as of the date
hereof there are no such arrangements or firm intentions which have been
made.
The Board of Directors strongly believes that opportunities may
arise which will require prompt action and in which any delay incurred in
seeking stockholder approval for issuance of additional shares could be
detrimental to the Company and its stockholders. In the Board's opinion,
the proposed amendment to the Company's Certificate of Incorporation will
give the Company the flexibility to take advantage of such opportunities
and to operate more effectively. Authorization of such additional shares
would permit the issuance at various times of shares which could be
specifically adapted to a wide variety of circumstances. As to each
series of Preferred Stock, the Board of Directors has the power to fix the
dividend rights, dividend or interest rates, conversion rights, voting
rights, rights and terms of redemption (including sinking fund
provisions), redemption prices and liquidation preferences, and any other
powers, designations, preferences and relative participating, optional or
other rights of the series, as well as any qualifications, limitations or
restrictions on any of the rights of the series, and the number of shares
constituting the series and the designation thereof, all without further
approval of the stockholders, except as may be required by application of
applicable law or stock exchange rules.
Other than as described above, there are no present negotiations,
agreements, or firm intentions regarding the future issuance of any
authorized but unissued shares of Common Stock or Preferred Stock. No
stockholder of the Company presently has, or would have, any preemptive
rights relating to the future issuance of any shares of Common Stock or
Preferred Stock.
Shares of Common Stock or Preferred Stock would be issued only as,
if, and when the Board of Directors believed the issuance to be in the
best interests of the Company and its stockholders. It is possible,
however, that the issuance of shares of Preferred Stock with dividend and
liquidation preferences could diminish the amounts which would otherwise
be available to the holders of Common Stock for these purposes. To the
extent that any series of Preferred Stock is made convertible into shares
of Common Stock of the Company, or that Common Stock or Preferred Stock is
issued for cash or assets, a dilution of the equity and the present voting
interest of the outstanding shares of Common Stock could result.
It is not possible to state the actual effect of the authorization
of additional shares of the Preferred Stock upon the rights of the
Company's Common stockholders until the Board of Directors has specified
the rights of a series of the Preferred Stock. However, the rights of any
such series, if and when issued, might preclude or make difficult a merger
or takeover, making the Company a less attractive potential takeover
candidate. Although the Board would make such a determination based on
its judgment as to the best interest of stockholders, the Board could so
act to discourage an acquisition attempt or other transaction viewed
favorably by the holders of a majority of the outstanding voting stock of
the Company. Thus, the authorization of Preferred Stock might be deemed
to have an anti-takeover effect. On balance, however, the Board believes
that the advantages of increasing its flexibility to act in the face of a
proposed transaction outweighs any resulting disadvantages to the
Company's stockholders. This proposal is not part of a plan by management
to adopt a series of amendments which may have an anti-takeover effect nor
does management presently intend to propose any anti-takeover measures in
any future solicitation of proxies. Management does not believe that any
provisions of the Company's present Certificate of Incorporation or By-
laws is likely to have an anti-takeover effect.
The Board of Directors believes that the Capitalization
Amendment is in the best interests of the Company and its Stockholders and
recommends that the stockholders approve the Capitalization Amendment.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock is required for approval of the Capitalization
Amendment.
The text of the proposed amendment to the Certificate of
Incorporation is as follows:
That the first sentence of the FOURTH Article of the Certificate
of Incorporation be and it hereby is amended to read in its entirety as
follows:
"FOURTH: The total number of shares of all classes which the
Corporation is authorized to have outstanding is Forty Million
(42,000,000) shares of which stock Forty Million (40,000,000) shares in
the par value of $.001 each, amounting in the aggregate of Twenty Thousand
Dollars ($40,000) shall be common stock and of which Two Million
(2,000,000) shares in the par value of $.001 each, amounting in the
aggregate to Two Thousand Dollars ($2,000) shall be preferred stock."
The Board of Directors recommends a vote "for" the approval of
the Capitalization Amendment.
SELECTION OF AUDITORS
Proposal 4
The Board of Directors has appointed Deloitte Touche, LLP,
independent certified public accountants, as the Company's independent
auditors for the fiscal year ending April 30, 2001, subject to
ratification by the Company's stockholders. Deloitte Touche, LLP has
audited the financial statements of the Company since 1996. It is expected
that a representative of Deloitte Touche, LLP will be present at the
Special Meeting, with the opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate
questions. The Board of Directors recommends that the stockholders ratify
the selection of Deloitte Touche, LLP, as the Company's independent
auditors by voting for this proposal.
STOCKHOLDERS' PROPOSALS
Any stockholder who wishes to present a proposal for action at the
next Meeting of Stockholders and who wishes to have it set forth in the
proxy statement and identified in the form of proxy prepared by management
must notify management of the Company so that such notice is received by
management at its principal executive offices at 421 North Wabasha Street,
Suite 260, St. Paul, Minnesota 55102 by October 30, 2001 and is in such
form as is required under the rules and regulations promulgated by the
Securities and Exchange Commission.
MISCELLANEOUS
The Board of Directors knows of no other business to be presented
at the Special Meeting but if other matters properly do come before the
meeting, it is intended that the persons named in the accompanying proxy
will vote the shares for which they hold proxies in accordance with their
judgment.
The Company's Annual Report on Form 10-KSB for the fiscal year
ended April 30, 2000 and the Company's Quarterly Report on Form 10-QSB for
the quarter ended October 31, 2000, are being delivered to the Company's
stockholders with this Proxy Statement. Such reports are not to be
considered part of the soliciting material.
By Order of The Board of Directors,
RICHARD A. BARBARI,
Chairman
Dated: February 27, 2001
St. Paul, Minnesota
APPENDIX
FORM OF PROXY CARD
PROXY
PL BRANDS, INC.
SPECIAL MEETING OF STOCKHOLDERS
MARCH 22, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard A. Barbari and Robert
Brown, and each of them, with power of substitution as proxies for the
undersigned to act and vote at the Special Meeting of Stockholders of PL
Brands, Inc. (the "Company") to be held on March 22, 2001, at 1:00 p.m.,
local time, at the St. Paul Hotel, 350 Market Street, St. Paul, Minnesota 55102
and any adjournments thereof for the following purposes:
1. Election of Directors - Nominees: Richard A. Barbari,
Christopher J. Pearson, Louis Fornetti, Anthony L. Rafel, Roland D. Pampel
and Robert Brown.
[ ] FOR [ ] FOR ALL EXCEPT [ ] WITHHOLD
INSTRUCTION: To withhold your vote for any nominee(s), mark "For All
Except" and write that nominee's name on the line below.
2. Proposal to change the name of the Company from "PL Brands,
Inc." to "Othnet, Inc.".
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to authorize an amendment to the Certificate of
Incorporation of the Company to increase the number of authorized shares
of Common Stock and Preferred Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Proposal to ratify the selection of Deloitte Touche, LLP as
the Company's independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To transact such other business as may properly come before
the Special Meeting or any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. UNLESS OTHERWISE SPECIFIED, THE
SHARES WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
Signatures of Shareholder(s)
Date:
NOTE: Please sign your name exactly as it appears on this Proxy. Jointly
held shares require only one signature. If you are signing this Proxy as
an attorney, administrator, agent, corporation, officer, executor, trustee
or guardian, etc., please add your full title to your signature.
IMPORTANT: IF YOU RECEIVE MORE THAN ONE CARD, PLEASE SIGN AND
RETURN ALL CARDS IN THE ACCOMPANYING ENVELOPE.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY TODAY