SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. N/A )
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Check the appropriate box: [ ] Confidential, for Use of
[X] Preliminary proxy statement the Commission Only (as
[ ] Definitive proxy statement permitted by Rule
[ ] Definitive additional materials 14a-6(e)(2)
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Clean Diesel Technologies, Inc.
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(Name of Registrant as Specified in its Charter)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(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):
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statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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Clean Diesel Technologies, Inc.
300 Atlantic Street
Stamford CT 06901
March 25, 2003
Dear Shareholder:
Enclosed are materials relating to the Company's request for stockholders to
approve increasing Clean Diesel Technologies authorized common stock from
15,000,000 to 30,000,000 shares. The Company currently has only 1.1 million
shares of authorized common stock available for issue.
The Directors of the Company have determined that additional common stock is
needed for sales to investors to provide funds for Clean Diesel's
commercialization activities and general operating purposes. The Company may
also consider strategic acquisitions that would assist the commercialization of
the Companies' technologies.
The enclosed documents are in the form of a consent solicitation and we ask that
you sign and date the consent form and return in it to the Transfer Agent in the
enclosed envelope. You may also fax your consent form to the Company Secretary
at 203-323-0461. Please be sure to date your consent form so that it will be
effective.
If you would like additional information contact one of the following:
- Jeremy Peter-Hoblyn
(UK) 44-1208-851213
- Derek Gray
(London) 44-20-7487-4444
- David Whitwell
(US) 203-327-7050
Sincerely,
Jeremy D. Peter-Hoblyn
Chairman and CEO
CLEAN DIESEL TECHNOLOGIES, INC.
300 Atlantic Street, Suite 702
Stamford, CT 06901 U.S.A.
Tel: (203) 327-7050
Fax: (203) 323-0461
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Notice of Solicitation of Stockholder Consents
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To the Stockholders of Clean Diesel Technologies, Inc.:
The enclosed form of consent (the "Consent") is solicited by the Board of
Directors of Clean Diesel Technologies, Inc., a Delaware corporation (the
"Company") to obtain stockholder consent in writing without a meeting to
increase the authorized capital of the Company. The Board seeks stockholder
approval of an amendment of the Company's certificate of incorporation (the
"Amendment") to increase the authorized number of shares of common stock, par
value $0.05, (the "Common") from 15,000,000 to 30,000,000.
The attached Consent Solicitation Statement describes the proposed Amendment.
As authorized by Delaware law, this solicitation of Consents is in lieu of a
meeting. Accordingly, there will be no meeting of stockholders held in
connection with this solicitation. Under Delaware law the holders of at least a
majority of the outstanding Common are permitted to approve the Amendment by
written consent in lieu of a meeting provided that prompt notice of the approval
is given to the other stockholders of the Company. Such action results in
approval of the Amendment without the approval of the stockholders who do not
consent.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE AMENDMENT AND UNANIMOUSLY
RECOMMENDS THAT YOU CONSENT TO THE INCREASE IN THE AUTHORIZED NUMBER OF SHARES
OF COMMON.
The record date for this solicitation is March 24, 2003. Holders of the Company
Common at the close of business on that date are being mailed the accompanying
Consent Solicitation Statement and Consent and asked to sign the Consent to
approve of the Amendment. Each stockholder is urged to complete, sign, date and
mail the Consent as promptly as possible in the enclosed self-addressed
postage-paid envelope.
The date of this notice is March 25, 2003 and it was mailed on or about April
__, 2003.
By order of the Board of Directors
Charles W. Grinnell
Secretary
PLEASE COMPLETE, SIGN AND DATE YOUR CONSENT AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. PLEASE DATE YOUR CONSENT TO ENSURE IT WILL BE EFFECTIVE
AND COUNTED. ANY CONSENT GIVEN MAY BE REVOKED IN WRITING AT ANY TIME PRIOR TO
THE RECEIPT BY THE COMPANY OF UNREVOKED CONSENTS FROM THE HOLDERS OF A MAJORITY
OF THE COMPANY'S OUTSTANDING COMMON.
YOU MAY FAX YOUR SIGNED AND DATED CONSENT TO THE ATTENTION OF THE COMPANY
SECRETARY AT THE FAX NUMBER IN THE ABOVE CAPTION.
CLEAN DIESEL TECHNOLOGIES, INC.
300 Atlantic Street, Suite 702
Stamford, CT 06901 U.S.A.
Tel: (203) 327-7050
Fax: (203) 323-0461
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Consent Solicitation Statement
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GENERAL
This Consent Solicitation Statement and the accompanying Notice of Solicitation
of Stockholder Consents and form of Consent are being mailed in connection with
the solicitation of written Consents without a meeting by the Board of Directors
of Clean Diesel Technologies, Inc., a Delaware corporation (the "Company").
These materials pertain to the proposed amendment of the Company's certificate
of incorporation (the "Amendment") to increase the authorized capital of the
Company by increasing the authorized number of common shares, par $0.05 (the
"Common"), from 15,000,000 to 30,000,000. Consents are to be submitted to the
Company's Transfer Agent in the enclosed envelope (or may also be faxed to the
Company Secretary at the number indicated above) as promptly as possible.
SOLICITATION, VOTING AND REVOCABILITY OF CONSENTS
The Common shares are the only outstanding securities of the Company. The Board
has fixed the record date for this solicitation as March 24, 2003. According to
the records of the Company's transfer agent, as of the close of business on the
record date the Company had 11,976,904 shares of common outstanding and eligible
to vote. Each share of Common is entitled to one vote on the Amendment.
The Amendment requires the affirmative vote of a majority of the outstanding
Common. Brokers may return a Consent for shares held in "street" or nominee
name in favor of the Amendment absent contrary instructions from the beneficial
owner of such shares. Abstentions (including failures to return written
Consents) and broker nonvotes have the same effect as negative votes.
Delaware law requires that each Consent have a dated signature of each
stockholder who signs the Consent. An undated Consent cannot be used. Also, no
Consent shall be effective unless Consents from holders of a majority of the
outstanding Common are received within the 60 day period following the first
dated consent received with respect to this proposal (the "Consent Solicitation
Period").
Solicitation will be made primarily through the use of the mail. Members of the
Board and Executive Officers of the Company may solicit stockholders' consents
directly by telephone or facsimile. The Company shall bear the cost of any
consent solicitation.
The Company has asked brokers, and other custodians, nominees and fiduciaries to
forward these Consent solicitation materials to the beneficial owners of the
Common held of record by such persons and will reimburse such persons for out of
pocket expenses incurred in forwarding such materials.
Any stockholder executing a Consent has the power to revoke it at any time
before the earlier of (i) the date on which at least the minimum number of
shares have consented in order to approve the Amendment, or (ii) the end of the
Consent Solicitation Period, by delivering written notice of such revocation
dated after the date of the Consent being revoked to the Company's Transfer
Agent or faxed to the Company Secretary at the number given above.
A stockholders list as of the record date is available for inspection at the
office of the Company set out above and will be available until the termination
of the Consent Solicitation Period.
If the holders of a majority of the outstanding Common as of the record date
approve of the Amendment, the Company intends to promptly amend the certificate
of incorporation in conformity with the text below and file a certificate of
amendment with the Secretary of State of Delaware. The Company shall also
promptly notify the stockholders who have not consented to the action taken as
required by Delaware law.
The Board of Directors has, moreover, reserved the power and authority, in its
discretion, to not file the certificate of amendment notwithstanding stockholder
approval, if it shall determine that refraining from filing and amending the
certificate is ultimately in the best interests of the stockholders, although no
state of facts now exists which would suggest that the Directors may consider
not filing and amending the certificate.
THE AMENDMENT
Requirement for Increase in Authorized Common
The Company has now authorized capital under its certificate of incorporation of
15,000,000 shares of Common and 100,000 shares of preferred stock the
("Preferred"). No preferred stock is outstanding. There are 11,976,904 shares
of Common issued and outstanding and 1,920,888 reserved for outstanding options
and warrants, leaving only 1,102,208 shares for future issue.
The directors have determined that additional Common is needed for sales to
investors to provide funds for the Company's commercialization and development
activities and general corporate purposes, and possibly for other uses,
including for potential merger and acquisition activity and for provision for
use as compensation or incentives for directors, officers and employees.
The Company's working capital position is such that the Company is actively
seeking additional sources of working capital. Although the Company now has no
commitments for the issuance of securities, except pursuant to the Company's
equity incentive plan and outstanding warrants, the Company expects in the
future to conduct discussions with third parties with respect to potential
investments. If any sales of securities are effected, the terms of such
securities, including dividend or interest rates, conversion prices, voting
rights, redemption prices, maturity dates, and similar matters will be
determined by the Board of Directors. Among other things, the Company may issue
and sell unregistered Common in private transactions. Such transactions may not
be available on terms favorable to the Company, or at all.
Form of Amendment of Certificate
The Board of Directors of the Company resolved on March 13, 2003 to adopt the
following resolution amending the certificate of incorporation of the Company,
subject to the approval of a majority of the outstanding Common and further
resolved that the amendment is advisable and should be recommended to the
stockholders for their approval.
Resolved, that Article 4 of the certificate of incorporation of the
corporation be, and it hereby is, amended by revoking in its entirety the
first paragraph of said Article 4 and the following being substituted in
its place, as follows:
"4. The corporation shall have authority to issue the total Number of Thirty
Million One Hundred Thousand (30,100,000) Shares of the par value of $0.05
per share, amounting in the aggregate to One Million Five Hundred Thousand
Dollars ($1,505,000), and of such shares, Thirty Million (30,000,000) shall
be designated as common stock and One Hundred Thousand (100,000) shall be
designated as preferred stock."
Dilution
The effect of the issuance of additional Common, directly or upon exercise of
warrants or options, if subsequently issued, has potentially dilutive effects on
stockholders. The issuance of Common or Preferred (or even the potential issue)
may have a depressive effect on the market price of the Company's securities and
may dilute the voting power of the outstanding Common. Also the issue of
additional shares of Common or Preferred, or options or warrants to purchase
such shares, would have a dilutive effect on stockholders' equity in the Company
and reduce stockholders' rights to the net assets of the Company upon
dissolution.
Anti-Takeover Effect
Although the Amendment is not motivated by anti-takeover concerns and is not
considered by the Board to be an anti-takeover measure, the availability of
additional authorized Common could be utilized as such. In addition to
financing purposes, the Company could also issue shares of Common or a series of
Preferred that may, depending on the amount of such Common or the terms of such
series of Preferred, make more difficult or discourage an attempt to obtain
control of the Company by means of a merger, tender offer, proxy content or
other means. The Board of Directors, might when it is determined to be in the
best interest of the stockholders, create voting, including class voting, or
other impediments to obtaining control of the Company.
Preemptive and Dissenting Rights
Under Delaware law, holders of the outstanding Common have no preemptive rights
to purchase or to subscribe to the additional shares authorized by the Amendment
and have no dissenting or appraisal rights with respect to the proposed
Amendment.
THE FOREGOING PROPOSAL REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF THE
OUTSTANDING COMMON FOR APPROVAL. THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE
PROPOSAL ON YOUR CONSENT.
PRINCIPAL STOCKHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding the beneficial ownership of
Common as of March 24, 2003 by (i) each person known to the Company to own
beneficially more than three percent of the outstanding Common; (ii) each
director of the Company; the Executive Officers of the Company; and (iv) all
directors and officers as a group.
Name and Address (1) No. of Shares (2)(3) Percentage (4)
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Beneficial Owners
Fuel-Tech N.V. (2)(5) 1,849,972 15.4%
Waltham Forest Friendly Society 1,062,598 8.9%
Positive Securities Limited 1,100,554 9.2%
Cadogen Settled Estates
Shareholding Company Limited 1,059,453 8.8%
Ruffer Investment Management Ltd. 700,000 5.8%
J.A. Kanis (2) 414,400 3.5%
Management Owners
John A. de Havilland (2) 155,296 1.3%
Derek R. Gray (2) 405,835 3.4%
Charles W. Grinnell (2) 131,788 1.1%
Jeremy D. Peter-Hoblyn (2) 371,619 3.1%
James M. Valentine (2) 334,356 2.8%
David W. Whitwell (2) 165,695 1.4%
All Directors and Officers as
A Group (2)
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(1)The address of Fuel-Tech N.V. is Castorweg 22-24, Curacao, Netherlands
Antilles. The address of the other beneficial owners is c/o S G Associates
Limited, 45 Queen Anne Street, London W1G 9JF U.K. The address of the
management owners is c/o Clean Diesel Technologies, Inc. Suite 702, 300 Atlantic
Street, Stamford, CT 06901 USA. The directors of the Company are Messrs. de
Havilland, Gray, Grinnell, Peter-Hoblyn and Valentine. The officers of the
Company are Mr. Peter-Hoblyn, Chairman and Chief Executive Officer; Mr.
Valentine, President and Chief Operating Officer; Mr. Whitwell, Vice President,
Treasurer and Chief Financial Officer, and Mr. Grinnell, Vice President, General
Counsel and Secretary.
(2) In addition to shares issued and outstanding, includes shares subject to
options or warrants exercisable within 60 days for Fuel-Tech N.V., 25,000
shares; Mr. J.A. Kanis, 10,000 shares; Mr. de Havilland, 133,817 shares; Mr.
Gray, 146,008 shares; Mr. Peter-Hoblyn, 321,366 shares; Mr. Valentine, 314,166
shares; Mr. Whitwell, 153,333 shares; Mr. Grinnell, 116,584 shares; and for all
directors and officers as a group, 1,185,274 shares. The amount for Mr. de
Havilland and for directors and officers as a group does not include 23,009
shares owned by his adult children as to which he disclaims beneficial
ownership.
(3) To the knowledge of the Company the owners of all shares hold sole
beneficial ownership and investment power over the shares reported.
(4) The percentages are percentages of outstanding stock and have been
calculated by including warrants and options exercisable within 60 days within
the amount of outstanding shares for directors and officers individually and as
a group. In addition 3% rather than 5% is presented in accordance with the
requirements of U.K. practice, the Company being listed on the Alternative
Investment Market of the London Stock Exchange.
(5) The shares indicated for Fuel-Tech N.V. include shares held by its wholly
owned subsidiary, Platinum Plus, Inc. Mr. de Havilland is a director of Cadogan
Settled Estates Shareholding Company Limited and disclaims beneficial ownership
of shares held by that Company.
MARCH 25, 2003
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CHARLES W. GRINNELL
SECRETARY
CONSENT CONSENT
Solicited by the Directors
CLEAN DIESEL TECHNOLOGIES, INC.
Consent to Increase Authorized Capital
Please return your consent form promptly to the Company's Transfer Agent in the
envelope provided. Or, you may fax the form of consent to the Company Secretary
at the number set out in the accompanying Notice of Solicitation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL
Proposal to amend the certificate of incorporation of the Company to
increase the amount of authorized common shares from 15,000,000 to
30,000,000.
Vote FOR Vote AGAINST ABSTAIN
[ ] [ ] [ ]
(Please sign and date below)
Dated: , 2003
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(Signature of Stockholder)
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(Signature of Stockholder)
If signing as attorney, executor, administrator, trustee or guardian, please
give full title as such, and, if signing for a corporation, give your title.
When shares are in the names of more than one person, each should sign.
PLEASE INSERT DATE ABOVE SO THAT THIS CONSENT MAY BE EFFECTIVE.