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 [ ]
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
PSYCHEMEDICS CORPORATION
(Name of Registrant as Specified In Its Charter)
NAME OF COMPANY
(Name of Person(s) Filing Proxy Statement)
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:
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PSYCHEMEDICS CORPORATION
1280 Massachusetts Avenue
Cambridge, Massachusetts 02138
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held on July 30, 2002
To the Stockholders of Psychemedics Corporation:
A Special Meeting of Stockholders of Psychemedics Corporation (the
"Corporation"), a Delaware corporation, will be held on Tuesday, July 30, 2002
at 10:00 a.m., local time, at the offices of Lynch, Brewer, Hoffman & Fink, LLP,
101 Federal Street, Floor 22, Boston, Massachusetts 02110, to consider and vote
upon a proposal to amend and restate the Corporation's Certificate of
Incorporation to effect a reverse stock split of the shares of the Corporation's
issued and outstanding common stock whereby one (1) share of "new" common stock
will be issued in exchange for each four (4) shares of common stock currently
issued and outstanding.
The Board of Directors has fixed the close of business on June 20, 2002 as
the record date for the determination of stockholders entitled to receive notice
of, and to vote at, the Special Meeting of Stockholders.
By order of the Board of Directors,
Edward S. Brewer, Jr.,
Secretary
Cambridge, Massachusetts
June 27, 2002
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PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ACCOMPANYING PROXY IN THE
RETURN ENVELOPE FURNISHED FOR THAT PURPOSE, WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING.
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PSYCHEMEDICS CORPORATION
1280 Massachusetts Avenue
Cambridge, Massachusetts 02138
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 30, 2002
Proxies in the form enclosed with this Proxy Statement are solicited by the
Board of Directors of Psychemedics Corporation (the "Corporation"), a Delaware
corporation, for use at a Special Meeting of Stockholders (the "Special
Meeting") to be held on Tuesday, July 30, 2002, at 10:00 a.m., local time, at
the offices of Lynch, Brewer, Hoffman & Fink, LLP, 101 Federal Street, Floor 22,
Boston, Massachusetts 02110. This proxy statement and the form of proxy were
first mailed to stockholders on or about June 27, 2002.
Only stockholders of record at the close of business on June 20, 2002 (the
"Record Date") will be entitled to receive notice of and to vote at the meeting
and any adjournments thereof. As of that date, 21,045,937 shares of common
stock, $.005 par value per share, of the Corporation were issued and
outstanding. The holders of common stock are entitled to one vote per share on
any proposal presented at the meeting. Stockholders may vote in person or by
proxy. Execution of a proxy will not in any way affect a stockholder's right to
attend the meeting and vote in person. Any stockholder giving a proxy has the
right to revoke it (i) by filing a later-dated proxy or a written notice of
revocation with the Secretary of the Corporation at any time before it is
exercised, or (ii) by voting in person at the Special Meeting (although
attendance at the Special Meeting will not, in itself, constitute revocation of
a proxy). Any written notice of revocation or subsequent proxy should be sent so
as to be delivered to Psychemedics Corporation, 1280 Massachusetts Avenue,
Cambridge, Massachusetts, 02138, Attention: Secretary, at or before the taking
of the vote at the Special Meeting. If your shares are held in the name of a
broker, trust, bank, or other nominee, and you want to vote your shares in
person at the meeting, then you will need to bring with you to the meeting a
proxy or letter signed by such broker, trust, bank, or nominee that confirms
that you are the beneficial owner of those shares and that permits you to vote
those shares in person at the meeting.
The representation in person or by proxy of at least a majority of the
outstanding common stock entitled to vote at the meeting is necessary to
constitute a quorum for the transaction of business. Votes which contain one or
more abstentions or broker "non-votes" are counted as present or represented for
purposes of determining the presence or absence of a quorum for the meeting. A
"non-vote" occurs when a nominee holding shares for a beneficial owner votes on
one proposal, but does not vote on another proposal because, in respect to such
other proposal, the nominee does not have discretionary voting power and has not
received instructions from the beneficial owner.
An affirmative vote of a majority of the outstanding shares of common stock
of the Corporation is required for approval of the proposal to amend and restate
the Corporation's Certificate of Incorporation. An automated system administered
by the Corporation's transfer agent tabulates the votes. The persons named as
attorneys-in-fact in the proxies, Raymond C. Kubacki, Jr. and Peter C. Monson,
are employees and/or officers of the Corporation. Where a choice has been
specified on the proxy with respect to the foregoing matter, the shares
represented by the proxy will be voted in accordance with the specifications and
will be voted FOR if no specification is indicated.
The Board of Directors knows of no other matters to be presented at the
meeting. If any other matter should be presented at the meeting upon which a
vote properly may be taken and upon which the proxies may exercise discretion
under applicable law, shares represented by all proxies received by the Board of
Directors will be voted with respect thereto in accordance with the judgment of
the persons named as attorneys in the proxies.
PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS
OF MANAGEMENT
The following table sets forth as of the Record Date: (i) the name and
address of each person who, to the knowledge of the Corporation, owned
beneficially more than five percent (5%) of the common stock of the Corporation
outstanding at such date; (ii) the name of each director; (iii) the name of each
person who served as chief executive officer for the fiscal year ended December
31, 2001; and (iv) the names of the Corporation's four most highly compensated
executive officers (other than the chief executive officer) in 2001, the number
of shares owned by each of such persons and the percentage of the outstanding
shares represented thereby, and also sets forth such information for all
executive officers and directors as a group.
Amount and Nature of Percentage
Name and Address of Beneficial Owner Beneficial Ownership(1) Owned(2)
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H. Wayne Huizenga 2,356,791(3) 11.20%
450 E. Las Olas Blvd. Suite 1500
Fort Lauderdale, Florida 33301
Richard T. Christoph 2,354,000(4) 11.19%
1650 Tall Grass Lane
Lake Forest, Illinois 60045
Donald F. Flynn 2,091,568(5)(6) 9.88%
676 North Michigan Avenue
Suite 4000
Chicago, Illinois 60611
Thomas J. Campbell 1,542,450(7) 7.33%
c/o Cisar and Mrofka Ltd.
1550 Spring Road #210
Oak Brook, IL 60523
John J. Melk 1,478,978(8) 7.03%
340 W. Barry Avenue, Coachhouse
Chicago, Illinois 60611
Raymond C. Kubacki, Jr. 887,799(5) 4.09%
A. Clinton Allen 835,499(5) 3.91%
Fred J. Weinert 519,137(5)(9) 2.45%
William Thistle 115,500(5) *
Walter S. Tomenson 66,950(5) *
Michael I. Schaffer 46,250(5) *
William Dausey 25,000(5) *
All Executive Officers and
Directors as a group (9 persons) 4,628,953(10) 21.74%
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* denotes ownership of less than 1%
(1) Shares are considered beneficially owned, for the purpose of this table
only, if held by the person indicated as beneficial owner, or if such
person, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has or shares the power to vote,
to direct the voting of and/or to dispose of or to direct the disposition
of such security, or if the person has the right to acquire beneficial
ownership within sixty (60) days, unless otherwise indicated in these
footnotes.
(2) Applicable percentage of ownership as of the Record Date is based upon
21,045,937 shares of common stock outstanding on such date. Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission, and includes voting and investment power with respect
to shares. Shares of common stock subject to options or warrants currently
exercisable or exercisable within 60 days of the Record Date are deemed
outstanding for computing the percentage ownership of the person holding
such options, but are not deemed outstanding for computing the percentage
of any other person.
(3) Includes: (i) 1,583,467 shares held by a limited partnership controlled by
said individual and (ii) 8,386 shares owned by said individual's spouse.
(4) Includes: (i) 262,800 shares held by said individual as trustee of the
Richard T. Christoph Trust, (ii) 173,800 shares held by said individual as
trustee of the Carla C. McMahon Trust, (iii) 368,100 held by Christoph
Securities, Inc. as to which said individual has sole dispositive and
voting power, and (iv) 15,400 shares owned by said individual's spouse.
(5) Includes the following number of shares of common stock which the
individual has a right to acquire within 60 days pursuant to the exercise
of options: Mr. Allen - 300,800; Mr. Kubacki - 639,752; Mr. Flynn -
123,000; Mr. Weinert - 127,400; Mr. Thistle - 115,500; Mr. Tomenson -
66,950; Mr. Schaffer - 46,250; and Mr. Dausey - 25,000.
(6) Includes: (i) 19,326 shares owned by Mr. Flynn as trustee under Grantor
Trust Agreement dated April 24, 1989, as amended; (ii) 1,644,248 shares
held by DNB LP as to which said individual, as President and sole director
of the general partner, has sole dispositive and voting power; and (iii)
304,994 shares owned by said individual's spouse.
(7) Includes: (i) 373,000 shares over which said individual has shared voting
and dispositive power with his spouse as joint tenants; and (ii) 460,250
shares held by a limited partnership controlled by said individual's
spouse.
(8) Includes 422,851 shares held by a corporation controlled by Mr. Melk.
(9) Includes 306,453 shares held by Mr. Weinert as trustee under the Fred J.
Weinert, Jr. Revocable Insurance Trust u/t/a dated May 17, 1982.
(10) Includes 1,485,902 shares which the executive officers and directors have
the right to acquire within 60 days pursuant to the exercise of options.
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PROPOSAL 1
APPROVAL OF AMENDMENT OF CERTIFICATE OF INCORPORATION
TO EFFECT A ONE-FOR-FOUR REVERSE STOCK SPLIT
On May 9, 2002, the Board of Directors adopted a resolution approving and
recommending to stockholders that they amend and restate the Corporation's
Certificate of Incorporation to effect a one-for-four reverse stock split (the
"Reverse Stock Split") which will, if approved by the stockholders, reduce the
number of outstanding shares to one quarter of the current number of shares of
common stock issued and outstanding. To avoid the existence of fractional shares
of common stock, stockholders who would otherwise be entitled to receive
fractional shares of common stock as a result of the Reverse Stock Split will
receive a cash payment in lieu thereof. No other changes to the Corporation's
Certificate of Incorporation are presently under consideration. A copy of the
Corporation's proposed Amended and Restated Certificate of Incorporation is
attached as Exhibit A to this Proxy Statement.
REASONS FOR THE REVERSE STOCK SPLIT
The primary purpose for effecting the Reverse Stock Split is to increase
the per share trading price of common stock so as to encourage greater interest
in common stock by the financial community and the investing public.
The Reverse Stock Split would also decrease the number of shares
outstanding and presumably increase the per share market price of the common
stock. However, the share price of the common stock may also be based on the
Corporation's performance and other factors, some of which may be unrelated to
the number of shares outstanding. Accordingly, there can be no assurance that
the price of the common stock after the Reverse Stock Split would actually
increase in an amount proportionate to the decrease in the number of outstanding
shares.
Assuming the market price of the Corporation's common stock will increase
proportionately following the effectiveness of the Reverse Stock Split,
management believes that the perception of the Corporation's common stock as an
investment will improve and that the Corporation's common stock will appeal to a
broader market. Management believes that additional interest in the
Corporation's common stock by the investment community is desirable and could
result in a more stable trading market for the Corporation's common stock. An
increased market price that may result from the Reverse Stock Split may
encourage interest and trading in the Corporation's common stock.
To the extent that a stockholder's holding is reduced by reason of the
Reverse Stock Split to less than 100 shares of common stock, the brokerage fees
for the sale of such shares will in all likelihood be higher than the brokerage
fees applicable to the sale of round lots of shares.
EFFECT ON OUTSTANDING SHARES
The Reverse Stock Split would decrease the number of shares outstanding
from approximately 21,000,000 shares to approximately 5,250,000 shares. If a
Reverse Stock Split is implemented, the rights and preferences of the
outstanding shares of common stock would remain the same after the Reverse Stock
Split. Each share of common stock issued pursuant to the Reverse Stock Split
would be fully paid and nonassessable.
EFFECT ON AUTHORIZED BUT UNISSUED SHARES
In addition, by decreasing the number of outstanding shares of common
stock, the Reverse Stock Split will increase the number of shares of the
Corporation's common stock available for future issuance. The Corporation's
Certificate of Incorporation currently authorizes the issuance of up to
50,000,000 shares of common stock and 872,521 shares of preferred stock. As of
the Record Date, the Corporation had 21,045,937 shares of common stock issued
and outstanding and no shares of preferred stock issued
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and outstanding. If approved by the stockholders, the Reverse Stock Split will
increase the number of shares of common stock available for future issuance by
approximately 15,750,000 shares. The increased number of authorized but unissued
shares of common stock could be used for a variety of purposes including the
transacting of acquisitions or business combinations.
CERTAIN OTHER EFFECTS OF THE REVERSE STOCK SPLIT
There will be no change in the number of the Corporation's authorized
shares of common stock and no change in the par value of the common stock.
Following the Reverse Stock Split, the common stock will continue to be listed
on the American Stock Exchange under the symbol "PMD".
Subject to the provisions for elimination of fractional shares as described
below, consummation of the Reverse Stock Split will not result in a change in
the relative equity position or voting power of the holders of common stock or
the contingent equity position of holders of stock options to purchase shares of
the Corporation's common stock.
EFFECT ON OPTIONS AND OTHER SECURITIES
Shares of common stock available for issuance under the Corporation's
several stock option plans will be reduced to reflect the Reverse Stock Split,
and the other relevant terms and provisions of the Corporation's several stock
option plans will be appropriately adjusted. The number of shares of common
stock issuable upon exercise of outstanding stock options issued under the
Corporation's several stock option plans will be reduced to give effect to the
Reverse Stock Split and the exercise prices for such stock options will be
increased to give effect to the Reverse Stock Split.
NO DISSENTER'S RIGHTS
Under Delaware law, stockholders are not entitled to dissenter's rights
with respect to the amending and restating of the Corporation's Certificate of
Incorporation to effect the Reverse Stock Split.
MANNER OF EFFECTING THE REVERSE STOCK SPLIT
The Reverse Stock Split will be effected by the filing of an Amended and
Restated Certificate of Incorporation in substantially the form attached as
Exhibit A to this Proxy Statement with the Secretary of State of the State of
Delaware. The Reverse Stock Split will become effective as of 12:01 a.m. Eastern
Daylight Time on August 1, 2002 (the "Effective Time").
At the Effective Time, each four (4) shares of "old" common stock will
automatically be combined and changed into one (1) share of "new" common stock.
No additional action on the part of the Corporation or any stockholder will be
required in order to effect the Reverse Stock Split. Stockholders will be
requested to exchange their certificates representing shares of common stock
held prior to the Reverse Stock Split for new certificates representing shares
of common stock issued as a result of the Reverse Stock Split. Stockholders will
be furnished the necessary materials and instructions to effect such exchange
promptly following the Effective Time by the Corporation's transfer agent.
Certificates representing shares of "old" common stock subsequently presented
for transfer will not be transferred on the books and records of the Corporation
until the certificates representing the shares of "old " common stock have been
exchanged for certificates representing shares of "new" common stock.
STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATES AND SHOULD NOT SUBMIT ANY
STOCK CERTIFICATES UNTIL REQUESTED TO DO SO.
In the event any certificate representing shares of "old" common stock is
not presented for exchange upon request by the Corporation, any dividends that
may be declared after the Effective Time with respect to the common stock
represented by such certificate will be withheld by the Corporation until
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such certificate has been properly presented for exchange, at which time all
such withheld dividends which have not yet been paid to the public official
pursuant to relevant abandoned property laws (as further discussed below), will
be paid to the holder thereof or his designee, without interest.
FRACTIONAL SHARES
The Corporation does not currently intend to issue fractional shares in
connection with the Reverse Stock Split. Therefore, no certificates representing
fractional shares are currently expected to be issued. Stockholders who
otherwise would be entitled to receive fractional shares because the number of
shares of the common stock they hold before the Reverse Stock Split is not
evenly divisible by four will be entitled, upon surrender to the transfer agent
of certificates representing such shares, to cash payments (without interest) in
lieu of the fractional shares. The amount of cash to be paid in lieu of issuing
fractional shares of common stock will be based on the last trading price of the
Common Stock at the close of trading on the American Stock Exchange on July 31,
2002. The ownership of a fractional interest will not give the holder any
voting, dividend or other rights, except to receive the cash payment.
Stockholders should be aware that, under the escheat laws of various
jurisdictions, sums due for fractional interests that are not timely claimed
after the Effective Time may be required to be paid to the designated agent for
each such jurisdiction, unless correspondence has been received by the
Corporation or the transfer agent concerning ownership of such funds within the
time permitted in such jurisdiction. Thereafter, stockholders otherwise entitled
to receive such funds will have to seek to obtain them directly from the state
to which they were paid.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of certain federal income tax
consequences of the Reverse Stock Split to the Corporation and to holders of
common stock that hold such stock as a capital asset for federal income tax
purposes. This discussion is based on laws, regulations, rulings and decisions
in effect on the date hereof, all of which are subject to change (possibly with
retroactive effect) and to differing interpretations. This discussion applies
only to holders that are U.S. persons and does not address all aspects of
federal income taxation that may be relevant to holders in light of their
particular circumstances or to holders who may be subject to special tax
treatment under the Internal Revenue Code, including, without limitation,
holders of preferred stock or warrants, holders who are dealers in securities or
foreign currency, foreign persons, insurance companies, tax-exempt
organizations, banks, financial institutions, broker-dealers, holders who hold
common stock as part of a hedge, straddle, conversion or other risk reduction
transaction, or who acquired common stock pursuant to the exercise of
compensatory stock options or otherwise as compensation.
The Corporation has not sought, and will not seek, an opinion of counsel or
a ruling from the Internal Revenue Service regarding the federal income tax
consequences of the Reverse Stock Split. The following summary does not address
the tax consequences of the Reverse Stock Split under foreign, state, or local
tax laws. Accordingly, each holder of common stock should consult his, her or
its tax advisor with respect to the particular tax consequences of the Reverse
Stock Split to such holder.
The federal income tax consequences for a holder of common stock pursuant
to the Reverse Stock Split will be as follows:
1. the holder should not recognize any gain or loss for federal income tax
purposes (except for cash, if any, received in lieu of a fractional share
of common stock);
2. the holder's aggregate tax basis of the common stock received pursuant to
the Reverse Stock Split, including any fractional share of the common stock
not actually received, should be equal to the aggregate tax basis of such
holder's common stock surrendered in exchange therefor;
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3. the holder's holding period for the common stock received pursuant to the
Reverse Stock Split should include such holder's holding period for the
common stock surrendered in exchange therefor;
4. cash payments received by the holder for a fractional share of common stock
generally should be treated as if such fractional share had been issued
pursuant to the Reverse Stock Split and then redeemed by the Corporation,
and such holder generally should recognize capital gain or loss with
respect to such payment, measured by the difference between the amount of
cash received and such holder's tax basis in such fractional share; and
5. the Corporation should not recognize gain or loss as a result of the
Reverse Stock Split.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The affirmative vote of a majority of the shares of the Corporation's
common stock issued and outstanding will be required to approve Proposal 1.
Unless otherwise indicated, properly executed proxies will be voted in favor of
Proposal 1. The Board of Directors unanimously recommends that stockholders vote
for the approval of Proposal 1.
OTHER MATTERS
The Board of Directors knows of no other matters which may come before the
Special Meeting. However, if any matter not now known is presented at the
Special Meeting, it is the intention of the persons named in the accompanying
form of proxy to vote said proxy in accordance with their judgment on such
matter.
The Corporation will bear the cost of solicitation of proxies. Solicitations of
proxies by mail may be followed by telephone or other personal solicitation of
certain stockholders by officers or other employees of the Corporation.
By order of the Board of Directors,
EDWARD S. BREWER, JR.,
Secretary
June 27, 2002
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EXHIBIT A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
PSYCHEMEDICS CORPORATION
Psychemedics Corporation, a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation (hereinafter called the "corporation") is
PSYCHEMEDICS CORPORATION
The original certificate of incorporation of the corporation was filed with the
Secretary of State of the State of Delaware on September 24, 1986.
2. The amendment and restatement of the certificate of incorporation has
been duly adopted by both the Board of Directors and the stockholders of the
corporation in accordance with the provisions of Sections 141, 222, 242 and 245
of the General Corporation Law of the State of Delaware.
3. Pursuant to Sections 242 and 245 of the General Corporation Law of the
State of Delaware, this Amended and Restated Certificate of Incorporation
restates and integrates and further amends the provisions of the corporation's
certificate of incorporation as heretofore amended or supplemented.
4. The text of the Amended and Restated Certificate of Incorporation
reads in its entirety as follows:
FIRST: The name of the corporation is Psychemedics Corporation.
SECOND: The address, including street, number, city, and county, of the
registered office of the corporation in the State of Delaware is 2711
Centerville Road, Suite 400, Wilmington, Delaware 19808; and the name of the
registered agent of the corporation in the State of Delaware at such address is
CSC - Corporation Service Company.
THIRD: The nature of the business and of the purposes to be conducted and
promoted by the corporation are as follows:
To establish, maintain, and operate chemical, physical, and other
laboratories to carry on chemical, and physical, research and testing services
of every kind and character, (especially for the detection of drugs of abuse),
and to market and sell directly or indirectly such laboratory services to the
public, including without limitation, private employers, the military,
government agencies and institutions, and medical professionals and
institutions; to produce and manufacture, and/or sell antibodies and reagents
for laboratory research, application and commercial purposes; to establish,
operate, conduct, assist and support rehabilitation clinics, services and
facilities engaged in the field of substance abuse, to own and protect any
inventions by letters patent or by holding them as secret processes, and to
grant licenses and make other lawful agreements or arrangements for the
employment or use of any such inventions by other persons; to apply for, obtain,
register, purchase, or otherwise acquire, hold, own, use, introduce, develop,
and sell, assign, lease, pledge, or otherwise dispose of or turn to account
letters patent of the United States or of any foreign country, inventions,
formulas, processes, patents, patent rights, licenses and privileges, trademarks
and trade names, or pending applications therefor; and without limiting any of
the aforesaid, to engage in such other business activities in furtherance of the
foregoing objectives.
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock which the corporation shall
have authority to issue is 50,872,521 shares, consisting of 50,000,000 shares of
Common Stock having a par value of $.005 per share and 872,521 shares of
Preferred Stock having a par value of $.005 per share. The Board of Directors is
hereby authorized, as it may determine, subject to limitations prescribed by
law, to issue such number of the authorized shares of Preferred Stock at any
time and from time to time, in one or more series, and to fix or alter the
designations, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions, of such shares of
Preferred Stock, including without limitation of the generality of the
foregoing, dividend rights, dividend rates, conversion rights, voting rights,
rights and terms of redemption (including sinking fund provisions), the
redemption price or prices and liquidation preferences of any wholly unissued
series of preferred shares and the number of shares constituting any such series
and the designation thereof, of any of them; and to increase or decrease the
number of shares of that series, but not below the number of shares of such
series then outstanding. In case the number of shares of any series shall be so
decreased, the shares constituting such decrease shall resume the status which
they had prior to the adoption of the resolution originally fixing the number of
shares of such series.
Upon the filing, and effective as of 12:01 a.m. Eastern Daylight Time on
August 1, 2002 (the "Effective Time"), each share of Common Stock, $.005 par
value per share ("Old Common Stock"), then issued and outstanding or held in the
treasury of the corporation at the Effective Time shall automatically be
reclassified, converted and changed into 0.25 share of Common Stock, $.005 par
value per share ("New Common Stock"), of the corporation without any further
action by the holders of such shares of Old Common Stock (and any fractional
shares resulting from such exchange will not be issued but will be redeemed by
the corporation at the fair market value of the fractional shares as determined
in good faith by the Board of Directors). Each stock certificate representing
shares of Old Common Stock shall thereafter represent that number of shares of
New Common Stock into which the shares of Old Common Stock represented by such
certificate shall have been reclassified; provided, however, that each person
holding of record a stock certificate or certificates that represented shares of
Old Common Stock shall receive, upon surrender of such certificate or
certificates, a new certificate or certificates evidencing and representing the
number of shares of New Common Stock to which such person is entitled. The New
Common Stock issued in this exchange shall have the same rights and preferences
as the Old Common Stock.
FIFTH: Intentionally Omitted.
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
EIGHTH: For the management of the business and for the conduct of the
affairs of the corporation, and in further definition, limitation and regulation
of the powers of the corporation and of its directors and of its stockholders or
any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of the
corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be
fixed by, or in the manner provided in, the By-Laws. The phrase "whole
Board" and the phrase "total number of directors" shall be deemed to
have the same meaning, to wit, the total number of directors which the
corporation would have if there were no vacancies. No election of
directors need be by written ballot.
2. After the original or other By-Laws of the corporation have been
adopted, amended, or repealed, as the case may be, in accordance with
the provisions of Section 109 of the General Corporation Law of the
State of Delaware, and, after the corporation has received any payment
for any of its stock, the power to adopt, amend, or repeal the By-Laws
of the corporation may be exercised by the Board of Directors of the
corporation; provided, however, that any provision for the
classification of directors of the corporation for staggered terms
pursuant to the provisions of subsection (d) of Section 141 of the
General Corporation Law of the State of Delaware shall be set forth in
an initial By-Law or in a By-Law adopted by the stockholders entitled
to vote of the corporation unless provisions for such classification
shall be set forth in this Amended and Restated Certificate of
Incorporation.
3. Whenever the corporation shall be authorized to issue only one class
of stock, each outstanding share shall entitle the holder thereof to
notice of, and the right to vote at, any meeting of stockholders.
Whenever the corporation shall be authorized to issue more than one
class of stock, no outstanding share of any class of stock which is
denied voting power under the provisions of this Amended and Restated
Certificate of Incorporation shall entitle the holder thereof to the
right to vote at any meeting of stockholders except as the provisions
of paragraph (2) of subsection (b) of Section 242 of the General
Corporation Law of the State of Delaware shall otherwise require;
provided, that no share of any such class which is otherwise denied
voting power shall entitle the holder thereof to vote upon the
increase or decrease in the number of authorized shares of said class.
NINTH: The personal liability of the directors of the corporation is hereby
eliminated to the fullest extent permitted by paragraph (7) of subsection (b) of
Section 102 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented.
TENTH: 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 any and all persons whom 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 indemnified may be entitled under any By-Law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
ELEVENTH: From time to time any of the provisions of this Amended and
Restated Certificate of Incorporation may be amended, altered or repealed, and
other provisions authorized by the laws of the State of Delaware at the 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 Amended and Restated Certificate of Incorporation are
granted subject to the provisions of this Article ELEVENTH.
IN WITNESS WHEREOF, Psychemedics Corporation has caused this Amended and
Restated Certificate of Incorporation to be signed by its President and attested
to by its Secretary this 30th day of July, 2002.
PSYCHEMEDICS CORPORATION
By:
-------------------------------------
Raymond C. Kubacki, Jr.,
President and Chief Executive Officer
Attest:
By:
------------------------------------
Edward S. Brewer, Jr., Secretary
PSYCHEMEDICS CORPORATION
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 30, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Raymond C. Kubacki, Jr. and Peter C. Monson, or
either of them (with full power to act alone), attorneys or attorney of the
undersigned (with full power of substitution to each), to vote for and in the
name of the undersigned, at a Special Meeting of Stockholders of Psychemedics
Corporation (the "Corporation") to be held on Tuesday, July 30, 2002 at 10:00
a.m., local time, at the offices of Lynch, Brewer, Hoffman & Fink, LLP, 101
Federal Street, Floor 22, Boston, Massachusetts 02110 and any adjournments
thereof, according to the number of shares and as fully as the undersigned would
be entitled to vote if personally present.
Without limiting the general authorization hereby given, said proxies are, and
each of them is, instructed to vote or act as follows on the proposal set forth
in the Corporation's Proxy Statement dated June 27, 2002 and on such other
matters as may properly come before the special meeting.
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PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
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Please sign this proxy exactly as your name appears on the books of the
Corporation. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more than
one name appears, a majority must sign. If the shareholder is a corporation, the
signature should be that of an authorized officer who should state his or her
title.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------ -----------------------------------
- ------------------------------ -----------------------------------
- ------------------------------ -----------------------------------
/X/ Please mark votes as
in this example.
For Against Abstain
(1) Amend and Restate Certificate of Incorporation / / / / / /
To consider and vote upon a proposal to amend and restate the Corporation's
Certificate of Incorporation to effect a reverse stock split of the shares
of the Corporation's issued and outstanding common stock whereby one (1)
share of "new" common stock will be issued in exchange for each four (4)
shares of common stock currently issued and outstanding.
The Board of Directors recommends a vote FOR Proposal 1.
This proxy, when properly executed, will be voted in the manner directed by
the undersigned stockholder. If no direction is made, this proxy will be
voted FOR the proposal set forth in paragraph (1).
PSYCHEMEDICS CORPORATION
Mark box at right if an address change or comment has been noted on the
reverse side of this card. / /
CONTROL NUMBER:
RECORD DATE SHARES:
-------------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- -------Stockholder sign here--------------Co-owner sign here--------------------
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DETACH CARD DETACH CARD
PSYCHEMEDICS CORPORATION
Dear Shareholder:
Please take note of the important information enclosed with this Proxy
Ballot.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall
be voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Special Meeting of Stockholders,
July 30, 2002.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Psychemedics Corporation
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