X-Ray photoelectron spectroscopy (XPS), infrared spectroscopy and magnetic susceptibility studies were performed on layered O2-phase compounds, Li-2/3(Ni1/3Mn2/3)O-2, Li(2/3)+x(Ni1/3Mn2/3)O-2, Li-2/3(Co0.15Mn0.85)O-2 and Li(2/3)+x(Co0.15Mn0.85)O-2 and their respective P2 phases, Na-2/3(Ni1/3Mn2/3)O-2 and Na-2/3(Co0.15Mn0.85)O-2. The observed electrochemical performance was correlated with the oxidation states of the M ions (M=Mn, Ni, Co). Li(2/3)+x(Ni1/3Mn2/3)O-2 and Li(2/3)+x(Co0.15Mn0.85)O-2 show significant improvement in their first-charge capacity over Li-2/3(Ni1/3Mn2/3)O-2 and Li-2/3(Co0.15Mn0.85)O-2 when used as cathodes vs. Li. Chemical analysis and XPS data indicate that the incorporation of xsimilar to1/3 in the above two compounds is accompanied by the reduction of a corresponding amount of Mn4+ to Mn3+ ions in the lattice. The magnetic moments obtained in the paramagnetic region are in fair agreement with the oxidation state of the ions derived from the XPS data for the Ni-system but show deviations for the Co-system. Below 100 K, weak ferrimagnetic ordering is observed in Li(2/3)+x(Ni1/3Mn2/3)O-2 and Li(2/3)+x(Co0.15Mn0.85)O-2.