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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: Mark Johnson who wrote (7087)1/14/1999 9:03:00 PM
From: Larry Brubaker  Read Replies (2) of 27311
 
Mark, I have no plans to go to the meeting. But, just to irritate you, I owned shares at the right time, because I received a proxy in the mail today.

I'd like to hear some reasons why I should vote my shares for Proposal 3, given the company will not give a clear picture of production status.

The proxy says, "in the event the stockholders do not approve the issuance as they are being requested to do in this Proposal 3 and the holders of the Preferred Stock and Warrants are not able to convert the Preferred Stock and exercise the warrants as they so desire because the stockholders do not approve the issuance as they are being requested to do in this Proposal 3, then the holders of the Preferred Stock will be entitled to demand redemption of the Preferred Stock at a premium. (emphasis mine)

Does anybody know what would happen if the preferred stock is redeemed "at a premium?" How could the "premium" be worse than a floorless conversion.

I realize I am speculating about "worst case" scenarios here that are not likely to happen. But I am curious to know if anybody knows what would the premium be under these circumstances. If this premium seems less onerous than a floorless conversion, I might be inclined to vote "NO".
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