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. )
Filed by the registrant / /
Filed by a party other than the registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14(a)-12
QUERYOBJECT SYSTEMS CORPORATION
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(Name of Registrant as Specified in Charter)
Kenneth Schlesinger
Olshan Grundman Frome Rosenweig & Wolosky LLP
212-753-7200
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(Name of Person(s) filing Proxy Statement, if other than Registrant)
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:
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(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):
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(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:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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Def 14A
Definitive Proxy?
QUERYOBJECT SYSTEMS CORPORATION
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 27, 2000
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To the Stockholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the
"Special Meeting") of QueryObject Systems Corporation, a Delaware corporation
(the "Company"), will be held at the Company's headquarters, located at One
Expressway Plaza, Suite 208, Roslyn Heights, New York 11577, on Thursday,
January 27, 2000, at 10:00 A.M., local time, for the following purpose:
1. To approve a one for three reverse stock split of the
Company's issued and outstanding Common Stock; and
2. To transact such other business as may properly be brought
before the Special Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on January 4,
2000 as the record date for the Special Meeting or any adjournments thereof.
Only stockholders of record on the stock transfer books of the Company at the
close of business on that date are entitled to notice of, and to vote at, the
Special Meeting.
By Order of the Board of Directors
DANIEL M. PESS
Secretary
Dated: January 6, 2000
Roslyn Heights, New York
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, YOU ARE
URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE THAT
IS PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
QUERYOBJECT SYSTEMS CORPORATION
ONE EXPRESSWAY PLAZA, SUITE 208
ROSLYN HEIGHTS, NEW YORK 11577
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PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
JANUARY 27, 2000
----------------
INTRODUCTION
This Proxy Statement is being furnished to stockholders by the Board of
Directors of QUERYOBJECT SYSTEMS CORPORATION, a Delaware corporation (the
"Company"), in connection with the solicitation of the accompanying Proxy for
use at a Special Meeting of Stockholders of the Company (the "Special Meeting")
to be held at the Company's principal executive offices located at One
Expressway Plaza, Suite 208, Roslyn Heights, New York 11577, on Thursday,
January 27, 2000, at 10:00 A.M., local time, or at any adjournment thereof.
The approximate date on which this Proxy Statement and the accompanying
Proxy will first be sent or given to stockholders is January 7, 2000.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on January 4,
2000, the record date (the "Record Date") for the Special Meeting, will be
entitled to notice of, and to vote at, the Special Meeting and any adjournment
thereof. As of the close of business on the Record Date, there were 15,170,302
outstanding shares of the Company's common stock, $.001 par value (the "Common
Stock"). In addition, as of the Record Date, there were outstanding 1,596,875
shares of Series A Convertible Preferred Stock, $.001 par value (the "Series A
Preferred Stock"), 90,500 shares of Series B Convertible Preferred Stock, $.001
par value (the "Series B Preferred Stock") and 3,801 shares of Series C
Convertible Preferred Stock, $.001 par value (the "Series C Preferred Stock" and
collectively with the Series A Preferred Stock and the Series B Preferred Stock
(the "Preferred Stock").
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VOTING OF PROXIES
Shares of Common Stock, Series A Preferred Stock, Series B Preferred
Stock and Series C Preferred Stock represented by Proxies that are properly
executed, duly returned and not revoked will be voted in accordance with the
instructions contained therein. If no specification is indicated on the Proxy,
all such shares will be voted (i) for the approval of a one for three reverse
stock split of the Company's issued and outstanding Common Stock and (ii) for
any other matter that may properly be brought before the Special Meeting in
accordance with the judgment of the person or persons voting the Proxies.
The execution of a Proxy will in no way affect a stockholder's right to
attend the Meeting and to vote in person. Any Proxy executed and returned by a
stockholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Special Meeting, or by execution of a subsequent proxy that is
presented to the Special Meeting or if the stockholder attends the Special
Meeting and votes by ballot, except as to any matter or matters upon which a
vote shall have been cast pursuant to the authority conferred by such Proxy
prior to such revocation.
Holders of Common Stock should sign and return the white proxy. Holders
of Series A Preferred Stock should sign and return the blue proxy. Holders of
Series B Preferred Stock should sign and return the yellow proxy. Holders of
Series C Preferred Stock should sign and return the green proxy.
The cost of solicitation of the Proxies being solicited on behalf of
the Board of Directors will be borne by the Company. In addition to the use of
the mails, proxy solicitation may be made by telephone, telegraph and personal
interview by officers, directors and employees of the Company. The Company will,
upon request, reimburse brokerage houses and persons holding Common Stock,
Series A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock
in the names of their nominees for their reasonable expenses in sending
soliciting material to their principals.
VOTING RIGHTS
Holders of each share of Common Stock are entitled to one vote for each
share held on all matters. Holders of each share of Series A Preferred Stock are
entitled to four votes per share on all matters. Holders of each share of Series
B Preferred Stock are entitled to 20 votes per share on all matters. Holders of
each shares of Series C Preferred Stock are entitled to 1,159 votes per share on
all matters. Holders of shares of Common Stock, Series A Preferred Stock, Series
B Preferred Stock and Series C Preferred Stock will vote together as a single
class on all proposals. In addition, the holders of Common Stock will vote
separately as a class on the proposal to effect a reverse stock split of the
Common Stock.
The holders of a majority of the outstanding shares of Common Stock,
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock,
whether present in person or represented by proxy, will constitute a quorum for
the vote on the one for three reverse stock split, and any other matters that
may come before the meeting. The holders of a majority of the
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outstanding shares of Common Stock, whether present in person or represented by
proxy, will constitute a quorum when votes cast by such holders are counted
separately on the proposal to approve the reverse stock split.
Broker "non-votes" and the shares as to which a stockholder abstains
from voting are included for purposes of determining whether a quorum of shares
is present at a meeting. A broker "non-vote" occurs when a nominee holding
shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that item and
has not received instructions from the beneficial owner.
The affirmative vote of a majority of the outstanding shares of Common
Stock, Series A Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock, entitled to vote, voting together as a single class, together with the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock, voting separately as a class, is required to approve the one for
three reverse stock split. Accordingly, abstentions and broker non-votes will
have the same effect as a negative vote.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning ownership of the
Company's Common Stock and Preferred Stock, as of the Record Date, by each
person known by the Company to be the beneficial owner of more than five percent
of the outstanding Common Stock and Preferred Stock, each director, each
executive officer and by all directors and executive officers of the Company as
a group. Unless otherwise indicated, the address for each such person is in care
of the Company, One Expressway Plaza, Suite 208, Roslyn Heights, New York 11577.
The calculations with respect to beneficial ownership of Preferred Stock held is
based on the number of shares held and not on the number of votes per share to
which a holder of Preferred Stock is entitled.
<TABLE>
<CAPTION>
Number of
Number of Shares Shares
of Common Stock of Preferred
Directors, Nominees, Executive Officers and 5% Beneficially Percent Stock Beneficially Percent
Stockholders Owned(1) -age Owned(1) -age
------------ -------- ---- -------- ----
<S> <C> <C> <C> <C> <C>
Barry Rubenstein(2).......................................... 8,675,985 43.4% 709,170 42.0%
68 Wheatley Road
Brookville, New York 11545
Irwin Lieber(3).............................................. 6,075,006 32.9% 600,570 35.5%
767 Fifth Avenue, 45th Floor
New York, New York 10153
Barry Fingerhut(4)........................................... 5,962,506 32.5% 600,570 35.5%
767 Fifth Avenue, 45th Floor
New York, New York 10153
Seth Lieber(5)............................................... 5,748,648 31.5% 600,570 35.5%
767 Fifth Avenue, 45th Floor
New York, New York 10153
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Number of
Number of Shares Shares
of Common Stock of Preferred
Directors, Nominees, Executive Officers and 5% Beneficially Percent Stock Beneficially Percent
Stockholders Owned(1) -age Owned(1) -age
------------ -------- ---- -------- ----
<S> <C> <C> <C> <C> <C>
Jonathan Lieber(6)........................................... 5,748,648 31.5% 600,570 35.5%
767 Fifth Avenue, 45th Floor
New York, New York 10153
Wheatley Foreign Partners, L.P.(7)........................... 5,746,564 31.5% 600,570 35.5%
c/o Fiduciary Trust
One Capital Place
Snedden Road
P.O. Box 1062
Grand Cayman
British West Indies
Wheatley Partners, L.P. (7).................................. 5,746,564 31.5% 600,570 35.5%
80 Cutter Mill Road
Great Neck, New York 11021
Seneca Ventures (8).......................................... 660,019 4.3% 29,150 1.7%
68 Wheatley Road
Brookville, New York 11545
Woodland Venture Fund (9).................................... 781,484 5.0% 29,200 1.7%
68 Wheatley Road
Brookville, New York 11545
Woodland Partners (10)....................................... 377,548 2.5% 100 *
68 Wheatley Road
Brookville, New York 11545
Eli Oxenhorn (11............................................. 976,359 6.1% 50,100 3.0%
56 The Intervale
Roslyn Estates, New York 11576
PAW Partners (12)............................................ 1,431,884 8.6% 255,000 15.1%
10 Glenville Street
Greenwich, Connecticut 06831
Hudson Capital(13 ).......................................... 1,625,000 9.7% 50,000 3.0%
660 Madison Avenue - 14th Floor
New York, New York 10021
Andre Szykier (15)........................................... 277,802 1.8% - -
Alan W. Kaufman (16)......................................... 525,413 3.4% 50,000 3.0%
Amy L. Newmark (17).......................................... 409,600 2.6% 50,000 3.0%
Robert Thompson (18)......................................... 358,756 2.3% - -
Daniel M. Pess (18).......................................... 368,002 2.4% - -
Rino Bergonzi (18)........................................... 23,333 * - -
Irwin Jacobs (18)............................................ 23,333 * - -
All directors and executive officers as a group (7 persons)(19) 1,986,239 11.8% 100,000 6.0%
</TABLE>
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* Less than 1%
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(1) A person is deemed to be the beneficial owner of voting securities that
can be acquired by such person within 60 days after the Record Date
upon the exercise of options, warrants or convertible securities. Each
beneficial owner's percentage ownership is determined by assuming that
options, warrants or convertible securities that are held by such
person (but not those held by any other person) and that are currently
exercisable (i.e., that are exercisable within 60 days after the Record
Date) have been exercised. Unless otherwise noted, the Company believes
that all persons named in the table have sole voting and investment
power with respect to all shares beneficially owned by them.
(2) Based upon information contained in a report on Schedule 13D (the
"Wheatley 13D") filed jointly by Barry Rubenstein, Wheatley Foreign
Partners, L.P. ("Wheatley Foreign"), Wheatley Partners, L.P.
("Wheatley"), Seneca Ventures ("Seneca"), Woodland Venture Fund
("Woodland Fund"), Woodland Partners, Rev-Wood Merchant Partners ("Rev-
Wood"), Brookwood Partners, L.P. ("Brookwood") and certain other
entities with the Securities Exchange Commission ("SEC"). Includes (i)
111,457 shares of Common Stock issuable upon exercise of options, and
(ii) 315,942 shares of Common Stock issuable upon conversion of shares
of Series A and Series C Preferred Stock held by Mr. Rubenstein. Also
includes (a)(i) 3,125 shares of Common Stock issuable upon exercise of
warrants and (ii) 115,942 shares of Common Stock issuable upon
conversion of shares of Series C Preferred Stock held by Woodland
Partners, (b)(i) 3,125 shares of Common Stock issuable upon exercise of
warrants, and (ii) 411,884 shares of Common Stock issuable upon
conversion of shares of Series A, Series B and Series C Preferred Stock
held by Woodland Fund, (c)(i) 3,125 shares of Common Stock issuable
upon exercise of warrants, (ii) 353,913 shares of Common Stock issuable
upon conversion of shares of Series A, Series B and Series C Preferred
Stock, all of which are held by Seneca, (d)(i) 5,879 shares of Common
Stock issuable upon exercise of warrants and (ii) 2,816,000 shares of
Common Stock issuable upon conversion of shares of Series A and Series
C Preferred Stock, all of which are held by Wheatley Partners, (e)(i)
371 shares of Common Stock issuable upon exercise of warrants and (ii)
244,870 shares of Common Stock issuable upon conversion of shares of
Series A & Series C Preferred Stock, all of which are held by Wheatley
Foreign, (f) 350,000 shares of Common Stock issuable upon exercise of
options held by Rev-Wood, and (g) 57,971 shares of Common Stock
issuable upon conversion of shares of Series C Preferred Stock, all of
which are held by Brookwood. Mr. Rubenstein disclaims beneficial
ownership of the securities held by Woodland Partners, Woodland Fund,
Seneca, Wheatley, Wheatley Foreign, Rev-Wood, and Brookwood, except to
the extent of his respective equity interest therein.
(3) Based on information contained in the Wheatley 13D and certain other
information. Includes (i)112,500 shares of Common Stock issuable upon
exercise of options, and (ii) 115,942 shares of Common Stock issuable
upon conversion of shares of Series C Preferred Stock, all of which are
held by Mr. Lieber. Also includes (a)(i) 5,879 shares of Common Stock
issuable upon exercise of warrants and (ii) 2,816,000 shares of Common
Stock issuable upon conversion of shares of Series A and Series C
Preferred Stock, all of which are held by Wheatley, and (b)(i) 371
shares of Common Stock issuable upon exercise of warrants and (ii)
244,870 shares of Common Stock issuable upon conversion of shares of
Series A and Series C Preferred Stock, all of which are held by
Wheatley
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Foreign, of which Mr. Lieber disclaims beneficial ownership, except to
the extent of his respective equity interest therein.
(4) Based on information contained in the Wheatley 13D and certain other
information. Includes 115, 942 shares of Common Stock issuable upon
conversion of shares of Series C Preferred Stock held by Mr. Fingerhut.
Also includes (a)(i) 5,879 shares of Common Stock issuable upon
exercise of warrants and (ii) 2,816,000 shares of Common Stock issuable
upon conversion of shares of Series A and Series C Preferred Stock, all
of which are held by Wheatley, and (b)(i) 371 shares of Common Stock
issuable upon exercise of warrants and (ii) 244,870 shares of Common
Stock issuable upon conversion of shares of Series A and Series C
Preferred Stock, all of which are held by Wheatley Foreign. Mr.
Fingerhut disclaims beneficial ownership of these securities except to
the extent of his equity respective ownership in Wheatley and/or
Wheatley Foreign.
(5) Based upon information contained in the Wheatley 13D. Includes 2,004
shares of Common Stock issuable upon exercise of options held by Mr.
Lieber. Also includes (a)(i) 5,879 shares of Common Stock issuable upon
exercise of warrants and (ii) 2,816,000 shares of Common Stock issuable
upon conversion of shares of Series A Preferred Stock and Series C
Preferred Stock, all of which are held by Wheatley, and (b)(i) 371
shares of Common Stock issuable upon exercise of warrants and (ii)
244,870 shares of Common Stock issuable upon conversion of shares of
Series A Preferred Stock and Series C Preferred Stock, all of which are
held by Wheatley Foreign, of which Mr. Lieber disclaims beneficial
ownership, except to the extent of his respective equity interest
therein.
(6) Based upon information contained in the Wheatley 13D. Includes 2,004
shares of Common Stock issuable upon exercise of options held by Mr.
Lieber. Also includes (a)(i) 5,879 shares of Common Stock issuable upon
exercise of warrants and (ii) 2,816,000 shares of Common Stock issuable
upon conversion of shares of Series A Preferred Stock and Series C
Preferred Stock, all of which are held by Wheatley, and (b)(i) 371
shares of Common Stock issuable upon exercise of warrants and (ii)
244,870 shares of Common Stock issuable upon conversion of shares of
Series A Preferred Stock and Series C Preferred Stock, all of which are
held by Wheatley Foreign, of which Mr. Lieber disclaims beneficial
ownership, except to the extent of his respective equity interest
therein.
(7) Based upon information contained in the Wheatley 13D and certain other
information. Includes (a)(i) 5,879 shares of Common Stock issuable upon
exercise of warrants and (ii) 2,816,000 shares of Common Stock issuable
upon conversion of shares of Series A and Series C Preferred Stock, all
of which are held by Wheatley, and (b)(i) 371 shares of Common Stock
issuable upon exercise of warrants and (ii) 244,870 shares of Common
Stock issuable upon conversion of shares of Series A and Series C
Preferred Stock, all of which are held by Wheatley Foreign. Wheatley
Foreign disclaims beneficial ownership of the securities held by
Wheatley and Wheatley disclaims beneficial ownership of the securities
held by Wheatley Foreign.
(8) Based upon information contained in the Wheatley 13D and certain other
information. Includes (i) 3,125 shares of Common Stock issuable upon
exercise of warrants, and (ii)
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353,913 shares of Common Stock issuable upon conversion of shares of
Series A, Series B and Series C Preferred Stock, held by Seneca.
(9) Based upon information contained in the Wheatley 13D and certain other
information. Includes (i) 3,125 shares of Common Stock issuable upon
exercise of warrants, and (ii) 411,884 shares of Common Stock issuable
upon conversion of shares of Series A, Series B and Series C Preferred
Stock, held by Woodland Fund.
(10) Based upon information contained in the Wheatley 13D and certain other
information. Includes (i) 3,125 shares of Common Stock issuable upon
exercise of warrants, and (ii) 115,942 shares of Common Stock issuable
upon conversion of shares of Series C Preferred Stock held by Woodland
Partners.
(11) Based upon information contained in a report on Schedule 13D filed by
Eli Oxenhorn with the SEC. Includes (i) 31,250 shares of Common Stock
issuable upon the exercise of options held by Mr. Oxenhorn, (ii)
350,000 shares of common stock that are issuable upon the exercise of
options held by Rev-Wood, an entity of which Mr. Oxenhorn is a general
partner, (iii) 200,000 shares of Common Stock that are issuable upon
the conversion of Series A Preferred Stock, and (iv) 115,942 shares of
Common Stock that are issuable upon the conversion of Series C
Preferred Stock. Mr. Oxenhorn disclaims beneficial ownership of the
securities held by Rev-Wood, except to the extent of his equity
interest therein.
(12) Consists of (i) shares of Common Stock that are issuable upon the
conversion of Series A Preferred Stock (ii) shares of Common Stock that
are issuable upon the exercise of Warrants, and (iii) shares of Common
Stock that are issuable upon the conversion of Series C Preferred
Stock.
(13) Includes 1,000,000 shares of Common Stock that are issuable upon the
conversion of shares of Series B Preferred Stock.
(14) Consists of shares of Common Stock that are issuable upon the
conversion of Series B Preferred Stock, (ii) shares of Common Stock
that are issuable upon the exercise of warrants, and (iii) shares of
Common Stock that are issuable upon the conversion of Series C
Preferred Stock.
(15) Includes 312 shares of Common Stock owned by Remy Szykier, Mr.
Syzkier's daughter and 64,062 shares of Common Stock issuable upon
exercise of options.
(16) Includes 200,413 shares of Common Stock issuable upon exercise of
options, and (ii) 200,000 shares that are issuable upon the conversion
of Series A Preferred Stock.
(17) Includes 175,000 shares of Common Stock issuable upon exercise of
options, and (ii) 200,000 shares of Common Stock that are issuable upon
the conversion of Series A Preferred Stock.
(18) Consists of shares of Common Stock issuable upon exercise of options.
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(19) Includes those shares of Common Stock and Outstanding Preferred Stock
deemed to be included in the respective beneficial ownership of Messrs.
Szykier, Kaufman, Jacobs, Thompson, Pess, Bergonzi and Ms. Newmark as
described in notes 15 through 18.
PROPOSAL I--APPROVAL OF THE REVERSE STOCK SPLIT
The Board of Directors believes it would be in the best interests of
the Company and its stockholders to effect a reverse stock split of three shares
of the Company's issued and outstanding Common Stock into one new share of
Common Stock (the "Reverse Stock Split"). In this regard, the Board has
unanimously approved, and recommends to stockholders that they approve, the
Reverse Stock Split, as described herein. The Reverse Stock Split will be
effected by the filing of an amendment to the Company's Certificate of
Incorporation, which contains the changes relating to the Reverse Stock Split,
substantially as set forth in Annex A to this Proxy Statement.
If the Reverse Stock Split is approved, each three shares of the
Company's Common Stock would be changed into one share of Common Stock. The par
value of the Common Stock would be changed to $.003 per share (from $.001 per
share). Cash in lieu of fractional shares would be paid to the stockholders upon
the sale of such fractional interest. Conversion rates for the Preferred Stock
and the per share exercise price and the number of shares issuable upon exercise
of outstanding warrants and options will be adjusted accordingly. For example,
if the Reverse Stock Split is implemented, each outstanding share of Series A
Preferred Stock will be convertible into 1.333 shares of Common Stock as opposed
to four shares of Common Stock as is currently the case. In addition, the
Company currently has outstanding warrants and options to purchase approximately
7,444,794 shares of Common Stock at an average exercise price of $2.26 per
share. If the Reverse Stock Split is approved, and assuming no other grants of
warrants or options or exercises of outstanding warrants or options, the Company
will have outstanding warrants and options to purchase approximately 2,481,598
shares of Common Stock at an average exercise price of $6.78 per share.
PURPOSES OF THE REVERSE STOCK SPLIT
The Common Stock was previously listed on the Nasdaq SmallCap Market
("Nasdaq"); it was delisted in May 1999 and currently trades on the OTC
Electronic Bulletin Board and the Boston Stock Exchange. The Board of Directors
believes that a Reverse Stock Split may facilitate the listing of the Company's
Common Stock on Nasdaq. In order to be eligible for listing on Nasdaq, a
security must have a minimum bid price of at least $4.00 for a sustained period.
As of the Record Date, the minimum bid price of the Common Stock was $2.96 per
share, as reported by the OTC Electronic Bulletin Board. If effected, the
Reverse Stock Split will reduce the number of shares of Common Stock issued and
outstanding. The Board expects that such reduction will result in an increase in
the bid price of the Common Stock to a level above the current bid price and to
at least $4.00 per share. However, since there are numerous factors and
contingencies that could affect the bid price of the Common Stock, there can be
no assurance that such increase in the bid price will occur, or, if it occurs,
that the bid price will be at least $4.00 per share for a sustained period.
Moreover, there can be no assurance that even if the minimum bid
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price of the Common Stock is at least $4.00 for a sustained period, the Company
will meet the other listing requirements for inclusion on Nasdaq. Accordingly,
there can be no assurance that even if the Reverse Stock Split is approved, the
Company's Common Stock will be approved for re-listing on Nasdaq.
The Board of Directors also believes that, even if the Common Stock is
not listed on Nasdaq, the Reverse Stock Split may improve the marketability and
liquidity of the Common Stock because the anticipated increase in the per share
price of the Common Stock should reduce the reluctance of many brokerage firms
and institutional investors to recommend the Common Stock to their clients or to
otherwise hold it in their own portfolios.
The Board of Directors believes that some of the practices of the
securities industry that may tend to discourage individual brokers within those
firms from dealing in lower-priced stocks or lending funds (i.e. providing
margin) to facilitate the purchase of such stocks have affected the per share
price of the Common Stock. Some of those practices involve time-consuming
procedures which make dealing in lower-priced stocks less appealing
economically. Furthermore, the brokerage commission on a sale of lower-priced
stock may also represent a higher percentage of the sale price than the actual
brokerage commission on a higher-priced issue.
The Board of Directors believes that a decrease in the number of issued
and outstanding shares of Common Stock, in the absence of any material
alteration in the proportionate economic interest in the Company held by its
individual stockholders, may increase the aggregate market value of the
outstanding shares. However, the Board makes no assurance that the market value
of the Common Stock will rise in proportion to the reduction in the number of
outstanding shares resulting from the Reverse Stock Split. Accordingly, there
can be no assurance that the foregoing objectives will be achieved or that the
market price of the Common Stock resulting upon implementation of the proposed
Reverse Stock Split will be maintained for any period of time or that such
market price will approximate three times the market price before the proposed
Reverse Stock Split.
POTENTIAL EFFECTS OF THE REVERSE STOCK SPLIT
Pursuant to the Reverse Stock Split, each holder of three shares of
Common Stock, par value $.001 per share ("Old Common Stock"), immediately prior
to the effectiveness of the Reverse Stock Split would become the holder of one
share of Common Stock, par value $.003 per share ("New Common Stock"), after
consummation of the Reverse Stock Split.
Although the Reverse Stock Split will not, by itself, impact the
Company's assets or prospects, the Reverse Stock Split could result in a
decrease in the aggregate market value of the Company's equity capital. The
Board of Directors believes that this risk is outweighed by the benefits of the
Reverse Stock Split.
If approved, the Reverse Stock Split will result in some stockholders
owning "odd-lots" of less than 100 shares of Common Stock. Brokerage commissions
and other costs of transactions in odd-lots are generally somewhat higher than
the costs of transactions in "round-lots" of even multiples of 100 shares.
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INCREASE OF SHARES OF COMMON STOCK AVAILABLE FOR FUTURE ISSUANCE
As a result of the Reverse Stock Split, there will be a reduction in
the number of shares of Common Stock issued and outstanding, or held as treasury
shares, and an associated increase in the number of authorized shares which
would be unissued and available for future issuance after the Reverse Stock
Split (the "Increased Available Shares"). The Increased Available Shares could
be used for any proper corporate purpose approved by the Board of Directors of
the Company including, among others, future financing transactions.
Because the Reverse Stock Split will create the Increased Available
Shares, the Reverse Stock Split may be construed as having an anti-takeover
effect. Although neither the Board of Directors nor the management of the
Company views the Reverse Stock Split as an anti-takeover measure, the Company
could use the Increased Available Shares to frustrate persons seeking to effect
a takeover or otherwise gain control of the Company.
EFFECTIVENESS OF THE REVERSE STOCK SPLIT
The Reverse Stock Split, if approved by the Company's stockholders,
would become effective (the "Effective Date") upon the filing with the Secretary
of State of the State of Delaware of a Certificate of Amendment of the Company's
Certificate of Incorporation in substantially the form of the Reverse Stock
Split Amendment attached to this Proxy Statement as Annex A. It is expected that
such filing will take place on or shortly after the date of the Special Meeting,
assuming the stockholders approve the Reverse Stock Split. However, the exact
timing of the filing of such Certificate of Amendment will be determined by the
Board of Directors based upon its evaluation as to when such action will be most
advantageous to the Company and its stockholders, and the Board of Directors
reserves the right to delay the Reverse Stock Split Amendment for up to twelve
months following stockholder approval thereof. In addition, the Board of
Directors reserves the right, notwithstanding stockholder approval and without
further action by the stockholders, to elect not to proceed with the Reverse
Stock Split Amendment if, at any time prior to filing such Reverse Stock Split
Amendment, the Board of Directors, in its sole discretion, determines that it is
no longer in the best interests of the Company and its stockholders.
Commencing on the Effective Date, each Old Common Stock certificate
will be deemed for all corporate purposes to evidence ownership of the reduced
number of shares of Common Stock resulting from the Reverse Stock Split and any
cash which may be payable in lieu of fractional shares. As soon as practicable
after the Effective Date, stockholders will be notified as to the effectiveness
of the Reverse Stock Split and instructed as to how and when to surrender their
certificates representing shares of Old Common Stock in exchange for
certificates representing shares of New Common Stock (and, if applicable, cash
in lieu of fractional shares).
On the Effective Date, the interest of each stockholder of record who
owns fewer than three shares of Common Stock will thereby be terminated, and he,
she or it will have no right to vote as a stockholder or share in the assets of
any future earnings of the Company.
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<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material anticipated Federal income
tax consequences of the Reverse Stock Split to stockholders of the Company. It
should be noted that this summary is based upon the Federal income tax laws
currently in effect and as currently interpreted. This summary does not take
into account possible changes in such laws or interpretations, including any
amendments to applicable statutes, regulations and proposed regulations, or
changes in judicial or administrative rulings, some of which may have
retroactive effect. The summary is provided for general information only, and
does not purport to address all aspects of the range of possible Federal income
tax consequences of the Reverse Stock Split and is not intended as tax advice to
any person. In particular, and without limiting the foregoing, this summary does
not account for or consider the Federal income tax consequences to stockholders
of the Company in light of their individual investment circumstances or to
holders subject to special treatment under the Federal income tax laws (for
example, life insurance companies, regulated investment companies, and foreign
taxpayers). This summary does not discuss any consequence of the Reverse Stock
Split under any state, local or foreign tax laws.
No ruling from the Internal Revenue Service or opinion of counsel will
be obtained regarding the Federal income tax consequences to the stockholders of
the Company in connection with the Reverse Stock Split. Accordingly, each
stockholder is encouraged to consult its tax adviser regarding the specific tax
consequences of the proposed Reverse Stock Split to such stockholder, including
the application and effect of federal, state, local and foreign taxes, and any
other tax laws.
The Board of Directors believes that the Reverse Stock Split would be a
tax-free recapitalization to the Company and its stockholders. If the Reverse
Stock Split qualifies as a recapitalization described in Section 368(a)(1)(E) of
the Internal Revenue Code of 1986, as amended (the "Code"), (i) no gain or loss
will be recognized by a stockholder of Common Stock who exchanges its Common
Stock for new Common Stock, except that a holder of Common Stock who receives
cash proceeds from the sale of fractional shares of Common Stock will recognize
a gain or loss equal to the difference, if any, between such proceeds and the
basis of its Common Stock allocated to its fractional share interests, and such
gain or loss, if any, will constitute capital gain or loss if its fractional
share interests are held as capital assets at the time of their sale, (ii) the
tax basis of the New Common Stock received by holders of Common Stock will be
the same as the tax basis of the Common Stock exchanged therefor, less the tax
basis allocated to fractional share interests and (iii) the holding period of
the new Common Stock in the hands of holders of New Common Stock will include
the holding period of their Common Stock exchanged therefor, provided that such
Common Stock was held as a capital asset immediately prior to the exchange.
-11-
<PAGE>
CONCLUSION
The Board of Directors has considered this Proposal and believes that
the Reverse Stock Split of the Company's issued and outstanding shares of Common
Stock is in the best interests of its stockholders.
The Directors unanimously recommend that the Company's stockholders
vote FOR the Reverse Stock Split.
ANNUAL AND QUARTERLY REPORT
All stockholders of record as of the Record Date, have been sent
herewith a copy of the Company's (i) Annual Report on Form 10-KSB for the year
ended December 31, 1998, which contains certified financial statements of the
Company for the year then ended and (ii) Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1999.
ANY STOCKHOLDER OF THE COMPANY MAY OBTAIN WITHOUT CHARGE A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1998
(WITHOUT EXHIBITS) AND QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTER ENDED
SEPTEMBER 30, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY
WRITING TO DANIEL M. PESS, CHIEF FINANCIAL OFFICER AND SECRETARY AT QUERYOBJECT
SYSTEMS CORPORATION, ONE EXPRESSWAY PLAZA, SUITE 208, ROSLYN HEIGHTS, NEW YORK
11577.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no
matters other than those set forth herein which will be presented for
consideration at the Meeting. If any other matter or matters are properly
brought before the Meeting or any adjournment thereof, the persons named in the
accompanying Proxy will have discretionary authority to vote, or otherwise act,
with respect to such matters in accordance with their judgment.
Daniel M. Pess
Secretary
January 6, 2000
-12-
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
QUERYOBJECT SYSTEMS CORPORATION
Proxy -- Special Meeting of Stockholders
January 27, 2000
The undersigned, a stockholder of QueryObject Systems Corporation, a
Delaware corporation (the "Company"), does hereby appoint Robert Thompson and
Daniel M. Pess, and each of them, the true and lawful attorneys and proxies with
full power of substitution, for and in the name, place and stead of the
undersigned, to vote all of the shares of Common Stock of the Company which the
undersigned would be entitled to vote if personally present at the 2000 Special
Meeting of Stockholders of the Company to be held at the Company's principal
executive offices, located at One Expressway Plaza, Suite 208, Roslyn Heights,
New York, on January 27, 2000 at 10:00 A.M., local time, or at any adjournment
or adjournments thereof.
The undersigned hereby instructs said proxies or their substitutes:
1. TO APPROVE A ONE FOR THREE REVERSE STOCK SPLIT:
______ FOR _____ AGAINST _____ ABSTAIN
2. DISCRETIONARY AUTHORITY:
In their discretion, the proxies are authorized to vote upon such other
and further business as may properly come before the Meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE
GIVEN. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO APPROVE THE ONE
FOR THREE REVERSE STOCK SPLIT.
<PAGE>
The undersigned hereby revokes any proxy or proxies heretofore given,
and ratifies and confirms that all the proxies appointed hereby, or any of them,
or their substitutes, may lawfully do or cause to be done by virtue hereof.
Dated _______________________, 2000
_____________________________ (L.S.)
_____________________________ (L.S.)
Signature(s)
NOTE: Please sign exactly as your name or names appear
hereon. When signing as attorney, executor,
administrator, trustee or guardian, please indicate
the capacity in which signing. When signing as joint
tenants, all parties in the joint tenancy must sign.
When a proxy is given by a corporation, it should be
signed with full corporate name by a duly authorized
officer.
Please mark, date, sign and mail this proxy
in the envelope provided for this purpose. No postage
is required if mailed in the United States.
<PAGE>
ANNEX A
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
QUERYOBJECT SYSTEMS CORPORATION
QueryObject Systems Corporation, a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of QueryObject Systems Corporation
at a duly called meeting, duly adopted resolutions setting forth a proposed
amendment of the Certificate of Incorporation of said corporation, declaring
said amendment to be advisable and proposing that said amendment be considered
by the stockholders of said corporation. The resolution setting forth the
proposed amendment is as follows:
RESOLVED, that the Board of Directors declares that it is
advisable to amend Article FOURTH of the Certificate of Incorporation
of the Corporation as follows:
FOURTH: This corporation is authorized to issue two
classes of stock to be designated, respectively, "Common
Stock" and "Preferred Stock." The total number of shares of
Common Stock this Corporation is authorized to issue is
60,000,000, par value $0.003 per share, and the total number
of shares of Preferred Stock this Corporation is authorized to
issue is 4,000,000 shares of Preferred Stock, with the Board
of Directors being hereby authorized to fix or alter the
rights, preferences, privileges and restriction granted to or
imposed upon any series of such Preferred Stock, and the
number of shares constituting any such series and the
designation thereof, or of any of them. The Board of Directors
is also authorized to increase or decrease the number of
shares of any series, prior or subsequent to the issue 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.
Simultaneously with the effective date of the filing
of this amendment to the Corporation's Certificate of
Incorporation (the "Effective Date"), each share of common
stock, par value $.001 per share, of the Corporation issued
and outstanding or held as treasury shares immediately prior
to the Effective Date (the "Old Common Stock") shall
automatically be reclassified and continued (the "Reverse
Stock Split"), without any action on the part of the holder
thereof, as one-third of one share of Common Stock. The
Corporation shall not issue
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<PAGE>
fractional shares on account of the Reverse Split. Holders of
Old Common Stock who would otherwise be entitled to a fraction
of a share on account of the Reverse Split shall receive, upon
surrender of the stock certificates formerly representing
shares of the Old Common Stock, in lieu of such fractional
share, an amount in cash (the "Cash-in-Lieu Amount") equal to
the product of (i) the fractional share which a holder would
otherwise be entitled to, multiplied by (ii) three times [such
price as the Corporation's Board of Directors determines, in
its discretion, to the be fair market value per share of the
Old Common Stock] on the business day prior to the Effective
Date. No Interest shall be payable on the Cash-in-Lieu
Amount."
SECOND: That thereafter, the stockholders of said corporation, at a
duly called meeting of the stockholders, voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, QueryObject Systems Corporation has caused this
Certificate to be signed by _______________, its ___________, this day of
____________, 2000.
QUERYOBJECT SYSTEMS CORPORATION
By: _____________________________
[ ]
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<PAGE>
QUERYOBJECT SYSTEMS CORPORATION
--------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 27, 2000
--------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the
"Special Meeting") of QueryObject Systems Corporation, a Delaware corporation
(the "Company"), will be held at the Company's headquarters, located at One
Expressway Plaza, Suite 208, Roslyn Heights, New York 11577, on Thursday,
January 27, 2000, at 10:00 A.M., local time, for the following purpose:
1. To approve a one for three reverse stock split of the
Company's issued and outstanding Common Stock; and
2. To transact such other business as may properly be brought
before the Special Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on January 4,
2000 as the record date for the Special Meeting or any adjournments thereof.
Only stockholders of record on the stock transfer books of the Company at the
close of business on that date are entitled to notice of, and to vote at, the
Special Meeting.
By Order of the Board of Directors
DANIEL M. PESS
Secretary
Dated: January 6, 2000
Roslyn Heights, New York
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, YOU ARE
URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE THAT
IS PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
QUERYOBJECT SYSTEMS CORPORATION
ONE EXPRESSWAY PLAZA, SUITE 208
ROSLYN HEIGHTS, NEW YORK 11577
----------------
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
JANUARY 27, 2000
----------------
INTRODUCTION
This Proxy Statement is being furnished to stockholders by the Board of
Directors of QUERYOBJECT SYSTEMS CORPORATION, a Delaware corporation (the
"Company"), in connection with the solicitation of the accompanying Proxy for
use at a Special Meeting of Stockholders of the Company (the "Special Meeting")
to be held at the Company's principal executive offices located at One
Expressway Plaza, Suite 208, Roslyn Heights, New York 11577, on Thursday,
January 27, 2000, at 10:00 A.M., local time, or at any adjournment thereof.
The approximate date on which this Proxy Statement and the accompanying
Proxy will first be sent or given to stockholders is January 7, 2000.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on January 4,
2000, the record date (the "Record Date") for the Special Meeting, will be
entitled to notice of, and to vote at, the Special Meeting and any adjournment
thereof. As of the close of business on the Record Date, there were 15,170,302
outstanding shares of the Company's common stock, $.001 par value (the "Common
Stock"). In addition, as of the Record Date, there were outstanding 1,596,875
shares of Series A Convertible Preferred Stock, $.001 par value (the "Series A
Preferred Stock"), 90,500 shares of Series B Convertible Preferred Stock, $.001
par value (the "Series B Preferred Stock") and 3,801 shares of Series C
Convertible Preferred Stock, $.001 par value (the "Series C Preferred Stock" and
collectively with the Series A Preferred Stock and the Series B Preferred Stock
(the "Preferred Stock").
<PAGE>
VOTING OF PROXIES
Shares of Common Stock, Series A Preferred Stock, Series B Preferred
Stock and Series C Preferred Stock represented by Proxies that are properly
executed, duly returned and not revoked will be voted in accordance with the
instructions contained therein. If no specification is indicated on the Proxy,
all such shares will be voted (i) for the approval of a one for three reverse
stock split of the Company's issued and outstanding Common Stock and (ii) for
any other matter that may properly be brought before the Special Meeting in
accordance with the judgment of the person or persons voting the Proxies.
The execution of a Proxy will in no way affect a stockholder's right to
attend the Meeting and to vote in person. Any Proxy executed and returned by a
stockholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Special Meeting, or by execution of a subsequent proxy that is
presented to the Special Meeting or if the stockholder attends the Special
Meeting and votes by ballot, except as to any matter or matters upon which a
vote shall have been cast pursuant to the authority conferred by such Proxy
prior to such revocation.
Holders of Common Stock should sign and return the white proxy. Holders
of Series A Preferred Stock should sign and return the blue proxy. Holders of
Series B Preferred Stock should sign and return the yellow proxy. Holders of
Series C Preferred Stock should sign and return the green proxy.
The cost of solicitation of the Proxies being solicited on behalf of
the Board of Directors will be borne by the Company. In addition to the use of
the mails, proxy solicitation may be made by telephone, telegraph and personal
interview by officers, directors and employees of the Company. The Company will,
upon request, reimburse brokerage houses and persons holding Common Stock,
Series A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock
in the names of their nominees for their reasonable expenses in sending
soliciting material to their principals.
VOTING RIGHTS
Holders of each share of Common Stock are entitled to one vote for each
share held on all matters. Holders of each share of Series A Preferred Stock are
entitled to four votes per share on all matters. Holders of each share of Series
B Preferred Stock are entitled to 20 votes per share on all matters. Holders of
each shares of Series C Preferred Stock are entitled to 1,159 votes per share on
all matters. Holders of shares of Common Stock, Series A Preferred Stock, Series
B Preferred Stock and Series C Preferred Stock will vote together as a single
class on all proposals. In addition, the holders of Common Stock will vote
separately as a class on the proposal to effect a reverse stock split of the
Common Stock.
The holders of a majority of the outstanding shares of Common Stock,
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock,
whether present in person or represented by proxy, will constitute a quorum for
the vote on the one for three reverse stock split, and any other matters that
may come before the meeting. The holders of a majority of the
-2-
<PAGE>
outstanding shares of Common Stock, whether present in person or represented by
proxy, will constitute a quorum when votes cast by such holders are counted
separately on the proposal to approve the reverse stock split.
Broker "non-votes" and the shares as to which a stockholder abstains
from voting are included for purposes of determining whether a quorum of shares
is present at a meeting. A broker "non-vote" occurs when a nominee holding
shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that item and
has not received instructions from the beneficial owner.
The affirmative vote of a majority of the outstanding shares of Common
Stock, Series A Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock, entitled to vote, voting together as a single class, together with the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock, voting separately as a class, is required to approve the one for
three reverse stock split. Accordingly, abstentions and broker non-votes will
have the same effect as a negative vote.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning ownership of the
Company's Common Stock and Preferred Stock, as of the Record Date, by each
person known by the Company to be the beneficial owner of more than five percent
of the outstanding Common Stock and Preferred Stock, each director, each
executive officer and by all directors and executive officers of the Company as
a group. Unless otherwise indicated, the address for each such person is in care
of the Company, One Expressway Plaza, Suite 208, Roslyn Heights, New York 11577.
The calculations with respect to beneficial ownership of Preferred Stock held is
based on the number of shares held and not on the number of votes per share to
which a holder of Preferred Stock is entitled.
<TABLE>
<CAPTION>
Number of
Number of Shares Shares
of Common Stock of Preferred
Directors, Nominees, Executive Officers and 5% Beneficially Percent Stock Beneficially Percent
Stockholders Owned(1) -age Owned(1) -age
- ---------------------------------------------- ---------------- ------- ------------------ --------
<S> <C> <C> <C> <C>
Barry Rubenstein(2)............................... 8,675,985 43.4% 709,170 42.0%
68 Wheatley Road
Brookville, New York 11545
Irwin Lieber(3)................................... 6,075,006 32.9% 600,570 35.5%
767 Fifth Avenue, 45th Floor
New York, New York 10153
Barry Fingerhut(4)................................ 5,962,506 32.5% 600,570 35.5%
767 Fifth Avenue, 45th Floor
New York, New York 10153
Seth Lieber(5).................................... 5,748,648 31.5% 600,570 35.5%
767 Fifth Avenue, 45th Floor
New York, New York 10153
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Number of
Number of Shares Shares
of Common Stock of Preferred
Directors, Nominees, Executive Officers and 5% Beneficially Percent Stock Beneficially Percent
Stockholders Owned(1) -age Owned(1) -age
- ---------------------------------------------- ---------------- ------- ------------------ --------
<S> <C> <C> <C> <C>
Jonathan Lieber(6)................................ 5,748,648 31.5% 600,570 35.5%
767 Fifth Avenue, 45th Floor
New York, New York 10153
Wheatley Foreign Partners, L.P.(7)................ 5,746,564 31.5% 600,570 35.5%
c/o Fiduciary Trust
One Capital Place
Snedden Road
P.O. Box 1062
Grand Cayman
British West Indies
Wheatley Partners, L.P. (7)....................... 5,746,564 31.5% 600,570 35.5%
80 Cutter Mill Road
Great Neck, New York 11021
Seneca Ventures (8)............................... 660,019 4.3% 29,150 1.7%
68 Wheatley Road
Brookville, New York 11545
Woodland Venture Fund (9)......................... 781,484 5.0% 29,200 1.7%
68 Wheatley Road
Brookville, New York 11545
Woodland Partners (10)............................ 377,548 2.5% 100 *
68 Wheatley Road
Brookville, New York 11545
Eli Oxenhorn (11.................................. 976,359 6.1% 50,100 3.0%
56 The Intervale
Roslyn Estates, New York 11576
PAW Partners (12)................................. 1,431,884 8.6% 255,000 15.1%
10 Glenville Street
Greenwich, Connecticut 06831
Hudson Capital(13 )............................... 1,625,000 9.7% 50,000 3.0%
660 Madison Avenue - 14th Floor
New York, New York 10021
Andre Szykier (15)................................ 277,802 1.8% - -
Alan W. Kaufman (16).............................. 525,413 3.4% 50,000 3.0%
Amy L. Newmark (17)............................... 409,600 2.6% 50,000 3.0%
Robert Thompson (18).............................. 358,756 2.3% - -
Daniel M. Pess (18)............................... 368,002 2.4% - -
Rino Bergonzi (18)................................ 23,333 * - -
Irwin Jacobs (18)................................. 23,333 * - -
All directors and executive officers as a group 1,986,239 11.8% 100,000 6.0%
(7 persons)(19)
</TABLE>
* Less than 1%
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<PAGE>
(1) A person is deemed to be the beneficial owner of voting securities that
can be acquired by such person within 60 days after the Record Date
upon the exercise of options, warrants or convertible securities. Each
beneficial owner's percentage ownership is determined by assuming that
options, warrants or convertible securities that are held by such
person (but not those held by any other person) and that are currently
exercisable (i.e., that are exercisable within 60 days after the Record
Date) have been exercised. Unless otherwise noted, the Company believes
that all persons named in the table have sole voting and investment
power with respect to all shares beneficially owned by them.
(2) Based upon information contained in a report on Schedule 13D (the
"Wheatley 13D") filed jointly by Barry Rubenstein, Wheatley Foreign
Partners, L.P. ("Wheatley Foreign"), Wheatley Partners, L.P.
("Wheatley"), Seneca Ventures ("Seneca"), Woodland Venture Fund
("Woodland Fund"), Woodland Partners, Rev-Wood Merchant Partners ("Rev-
Wood"), Brookwood Partners, L.P. ("Brookwood") and certain other
entities with the Securities Exchange Commission ("SEC"). Includes (i)
111,457 shares of Common Stock issuable upon exercise of options, and
(ii) 315,942 shares of Common Stock issuable upon conversion of shares
of Series A and Series C Preferred Stock held by Mr. Rubenstein. Also
includes (a)(i) 3,125 shares of Common Stock issuable upon exercise of
warrants and (ii) 115,942 shares of Common Stock issuable upon
conversion of shares of Series C Preferred Stock held by Woodland
Partners, (b)(i) 3,125 shares of Common Stock issuable upon exercise of
warrants, and (ii) 411,884 shares of Common Stock issuable upon
conversion of shares of Series A, Series B and Series C Preferred Stock
held by Woodland Fund, (c)(i) 3,125 shares of Common Stock issuable
upon exercise of warrants, (ii) 353,913 shares of Common Stock issuable
upon conversion of shares of Series A, Series B and Series C Preferred
Stock, all of which are held by Seneca, (d)(i) 5,879 shares of Common
Stock issuable upon exercise of warrants and (ii) 2,816,000 shares of
Common Stock issuable upon conversion of shares of Series A and Series
C Preferred Stock, all of which are held by Wheatley Partners, (e)(i)
371 shares of Common Stock issuable upon exercise of warrants and (ii)
244,870 shares of Common Stock issuable upon conversion of shares of
Series A & Series C Preferred Stock, all of which are held by Wheatley
Foreign, (f) 350,000 shares of Common Stock issuable upon exercise of
options held by Rev-Wood, and (g) 57,971 shares of Common Stock
issuable upon conversion of shares of Series C Preferred Stock, all of
which are held by Brookwood. Mr. Rubenstein disclaims beneficial
ownership of the securities held by Woodland Partners, Woodland Fund,
Seneca, Wheatley, Wheatley Foreign, Rev-Wood, and Brookwood, except to
the extent of his respective equity interest therein.
(3) Based on information contained in the Wheatley 13D and certain other
information. Includes (i)112,500 shares of Common Stock issuable upon
exercise of options, and (ii) 115,942 shares of Common Stock issuable
upon conversion of shares of Series C Preferred Stock, all of which are
held by Mr. Lieber. Also includes (a)(i) 5,879 shares of Common Stock
issuable upon exercise of warrants and (ii) 2,816,000 shares of Common
Stock issuable upon conversion of shares of Series A and Series C
Preferred Stock, all of which are held by Wheatley, and (b)(i) 371
shares of Common Stock issuable upon exercise of warrants and (ii)
244,870 shares of Common Stock issuable upon conversion of shares of
Series A and Series C Preferred Stock, all of which are held by
Wheatley
-5-
<PAGE>
Foreign, of which Mr. Lieber disclaims beneficial ownership, except to
the extent of his respective equity interest therein.
(4) Based on information contained in the Wheatley 13D and certain other
information. Includes 115, 942 shares of Common Stock issuable upon
conversion of shares of Series C Preferred Stock held by Mr. Fingerhut.
Also includes (a)(i) 5,879 shares of Common Stock issuable upon
exercise of warrants and (ii) 2,816,000 shares of Common Stock issuable
upon conversion of shares of Series A and Series C Preferred Stock, all
of which are held by Wheatley, and (b)(i) 371 shares of Common Stock
issuable upon exercise of warrants and (ii) 244,870 shares of Common
Stock issuable upon conversion of shares of Series A and Series C
Preferred Stock, all of which are held by Wheatley Foreign. Mr.
Fingerhut disclaims beneficial ownership of these securities except to
the extent of his equity respective ownership in Wheatley and/or
Wheatley Foreign.
(5) Based upon information contained in the Wheatley 13D. Includes 2,004
shares of Common Stock issuable upon exercise of options held by Mr.
Lieber. Also includes (a)(i) 5,879 shares of Common Stock issuable upon
exercise of warrants and (ii) 2,816,000 shares of Common Stock issuable
upon conversion of shares of Series A Preferred Stock and Series C
Preferred Stock, all of which are held by Wheatley, and (b)(i) 371
shares of Common Stock issuable upon exercise of warrants and (ii)
244,870 shares of Common Stock issuable upon conversion of shares of
Series A Preferred Stock and Series C Preferred Stock, all of which are
held by Wheatley Foreign, of which Mr. Lieber disclaims beneficial
ownership, except to the extent of his respective equity interest
therein.
(6) Based upon information contained in the Wheatley 13D. Includes 2,004
shares of Common Stock issuable upon exercise of options held by Mr.
Lieber. Also includes (a)(i) 5,879 shares of Common Stock issuable upon
exercise of warrants and (ii) 2,816,000 shares of Common Stock issuable
upon conversion of shares of Series A Preferred Stock and Series C
Preferred Stock, all of which are held by Wheatley, and (b)(i) 371
shares of Common Stock issuable upon exercise of warrants and (ii)
244,870 shares of Common Stock issuable upon conversion of shares of
Series A Preferred Stock and Series C Preferred Stock, all of which are
held by Wheatley Foreign, of which Mr. Lieber disclaims beneficial
ownership, except to the extent of his respective equity interest
therein.
(7) Based upon information contained in the Wheatley 13D and certain other
information. Includes (a)(i) 5,879 shares of Common Stock issuable upon
exercise of warrants and (ii) 2,816,000 shares of Common Stock issuable
upon conversion of shares of Series A and Series C Preferred Stock, all
of which are held by Wheatley, and (b)(i) 371 shares of Common Stock
issuable upon exercise of warrants and (ii) 244,870 shares of Common
Stock issuable upon conversion of shares of Series A and Series C
Preferred Stock, all of which are held by Wheatley Foreign. Wheatley
Foreign disclaims beneficial ownership of the securities held by
Wheatley and Wheatley disclaims beneficial ownership of the securities
held by Wheatley Foreign.
(8) Based upon information contained in the Wheatley 13D and certain other
information. Includes (i) 3,125 shares of Common Stock issuable upon
exercise of warrants, and (ii)
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353,913 shares of Common Stock issuable upon conversion of shares of
Series A, Series B and Series C Preferred Stock, held by Seneca.
(9) Based upon information contained in the Wheatley 13D and certain other
information. Includes (i) 3,125 shares of Common Stock issuable upon
exercise of warrants, and (ii) 411,884 shares of Common Stock issuable
upon conversion of shares of Series A, Series B and Series C Preferred
Stock, held by Woodland Fund.
(10) Based upon information contained in the Wheatley 13D and certain other
information. Includes (i) 3,125 shares of Common Stock issuable upon
exercise of warrants, and (ii) 115,942 shares of Common Stock issuable
upon conversion of shares of Series C Preferred Stock held by Woodland
Partners.
(11) Based upon information contained in a report on Schedule 13D filed by
Eli Oxenhorn with the SEC. Includes (i) 31,250 shares of Common Stock
issuable upon the exercise of options held by Mr. Oxenhorn, (ii)
350,000 shares of common stock that are issuable upon the exercise of
options held by Rev-Wood, an entity of which Mr. Oxenhorn is a general
partner, (iii) 200,000 shares of Common Stock that are issuable upon
the conversion of Series A Preferred Stock, and (iv) 115,942 shares of
Common Stock that are issuable upon the conversion of Series C
Preferred Stock. Mr. Oxenhorn disclaims beneficial ownership of the
securities held by Rev-Wood, except to the extent of his equity
interest therein.
(12) Consists of (i) shares of Common Stock that are issuable upon the
conversion of Series A Preferred Stock (ii) shares of Common Stock that
are issuable upon the exercise of Warrants, and (iii) shares of Common
Stock that are issuable upon the conversion of Series C Preferred
Stock.
(13) Includes 1,000,000 shares of Common Stock that are issuable upon the
conversion of shares of Series B Preferred Stock.
(14) Consists of shares of Common Stock that are issuable upon the
conversion of Series B Preferred Stock, (ii) shares of Common Stock
that are issuable upon the exercise of warrants, and (iii) shares of
Common Stock that are issuable upon the conversion of Series C
Preferred Stock.
(15) Includes 312 shares of Common Stock owned by Remy Szykier, Mr.
Syzkier's daughter and 64,062 shares of Common Stock issuable upon
exercise of options.
(16) Includes 200,413 shares of Common Stock issuable upon exercise of
options, and (ii) 200,000 shares that are issuable upon the conversion
of Series A Preferred Stock.
(17) Includes 175,000 shares of Common Stock issuable upon exercise of
options, and (ii) 200,000 shares of Common Stock that are issuable upon
the conversion of Series A Preferred Stock.
(18) Consists of shares of Common Stock issuable upon exercise of options.
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(19) Includes those shares of Common Stock and Outstanding Preferred Stock
deemed to be included in the respective beneficial ownership of Messrs.
Szykier, Kaufman, Jacobs, Thompson, Pess, Bergonzi and Ms. Newmark as
described in notes 15 through 18.
PROPOSAL I--APPROVAL OF THE REVERSE STOCK SPLIT
The Board of Directors believes it would be in the best interests of
the Company and its stockholders to effect a reverse stock split of three shares
of the Company's issued and outstanding Common Stock into one new share of
Common Stock (the "Reverse Stock Split"). In this regard, the Board has
unanimously approved, and recommends to stockholders that they approve, the
Reverse Stock Split, as described herein. The Reverse Stock Split will be
effected by the filing of an amendment to the Company's Certificate of
Incorporation, which contains the changes relating to the Reverse Stock Split,
substantially as set forth in Annex A to this Proxy Statement.
If the Reverse Stock Split is approved, each three shares of the
Company's Common Stock would be changed into one share of Common Stock. The par
value of the Common Stock would be changed to $.003 per share (from $.001 per
share). Cash in lieu of fractional shares would be paid to the stockholders upon
the sale of such fractional interest. Conversion rates for the Preferred Stock
and the per share exercise price and the number of shares issuable upon exercise
of outstanding warrants and options will be adjusted accordingly. For example,
if the Reverse Stock Split is implemented, each outstanding share of Series A
Preferred Stock will be convertible into 1.333 shares of Common Stock as opposed
to four shares of Common Stock as is currently the case. In addition, the
Company currently has outstanding warrants and options to purchase approximately
7,444,794 shares of Common Stock at an average exercise price of $2.26 per
share. If the Reverse Stock Split is approved, and assuming no other grants of
warrants or options or exercises of outstanding warrants or options, the Company
will have outstanding warrants and options to purchase approximately 2,481,598
shares of Common Stock at an average exercise price of $6.78 per share.
Purposes of the Reverse Stock Split
The Common Stock was previously listed on the Nasdaq SmallCap Market
("Nasdaq"); it was delisted in May 1999 and currently trades on the OTC
Electronic Bulletin Board and the Boston Stock Exchange. The Board of Directors
believes that a Reverse Stock Split may facilitate the listing of the Company's
Common Stock on Nasdaq. In order to be eligible for listing on Nasdaq, a
security must have a minimum bid price of at least $4.00 for a sustained period.
As of the Record Date, the minimum bid price of the Common Stock was $2.96 per
share, as reported by the OTC Electronic Bulletin Board. If effected, the
Reverse Stock Split will reduce the number of shares of Common Stock issued and
outstanding. The Board expects that such reduction will result in an increase in
the bid price of the Common Stock to a level above the current bid price and to
at least $4.00 per share. However, since there are numerous factors and
contingencies that could affect the bid price of the Common Stock, there can be
no assurance that such increase in the bid price will occur, or, if it occurs,
that the bid price will be at least $4.00 per share for a sustained period.
Moreover, there can be no assurance that even if the minimum bid
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price of the Common Stock is at least $4.00 for a sustained period, the Company
will meet the other listing requirements for inclusion on Nasdaq. Accordingly,
there can be no assurance that even if the Reverse Stock Split is approved, the
Company's Common Stock will be approved for re-listing on Nasdaq.
The Board of Directors also believes that, even if the Common Stock is
not listed on Nasdaq, the Reverse Stock Split may improve the marketability and
liquidity of the Common Stock because the anticipated increase in the per share
price of the Common Stock should reduce the reluctance of many brokerage firms
and institutional investors to recommend the Common Stock to their clients or to
otherwise hold it in their own portfolios.
The Board of Directors believes that some of the practices of the
securities industry that may tend to discourage individual brokers within those
firms from dealing in lower-priced stocks or lending funds (i.e. providing
margin) to facilitate the purchase of such stocks have affected the per share
price of the Common Stock. Some of those practices involve time-consuming
procedures which make dealing in lower-priced stocks less appealing
economically. Furthermore, the brokerage commission on a sale of lower-priced
stock may also represent a higher percentage of the sale price than the actual
brokerage commission on a higher-priced issue.
The Board of Directors believes that a decrease in the number of issued
and outstanding shares of Common Stock, in the absence of any material
alteration in the proportionate economic interest in the Company held by its
individual stockholders, may increase the aggregate market value of the
outstanding shares. However, the Board makes no assurance that the market value
of the Common Stock will rise in proportion to the reduction in the number of
outstanding shares resulting from the Reverse Stock Split. Accordingly, there
can be no assurance that the foregoing objectives will be achieved or that the
market price of the Common Stock resulting upon implementation of the proposed
Reverse Stock Split will be maintained for any period of time or that such
market price will approximate three times the market price before the proposed
Reverse Stock Split.
Potential Effects of the Reverse Stock Split
Pursuant to the Reverse Stock Split, each holder of three shares of
Common Stock, par value $.001 per share ("Old Common Stock"), immediately prior
to the effectiveness of the Reverse Stock Split would become the holder of one
share of Common Stock, par value $.003 per share ("New Common Stock"), after
consummation of the Reverse Stock Split.
Although the Reverse Stock Split will not, by itself, impact the
Company's assets or prospects, the Reverse Stock Split could result in a
decrease in the aggregate market value of the Company's equity capital. The
Board of Directors believes that this risk is outweighed by the benefits of the
Reverse Stock Split.
If approved, the Reverse Stock Split will result in some stockholders
owning "odd-lots" of less than 100 shares of Common Stock. Brokerage commissions
and other costs of transactions in odd-lots are generally somewhat higher than
the costs of transactions in "round-lots" of even multiples of 100 shares.
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Increase of Shares of Common Stock Available for Future Issuance
As a result of the Reverse Stock Split, there will be a reduction in
the number of shares of Common Stock issued and outstanding, or held as treasury
shares, and an associated increase in the number of authorized shares which
would be unissued and available for future issuance after the Reverse Stock
Split (the "Increased Available Shares"). The Increased Available Shares could
be used for any proper corporate purpose approved by the Board of Directors of
the Company including, among others, future financing transactions.
Because the Reverse Stock Split will create the Increased Available
Shares, the Reverse Stock Split may be construed as having an anti-takeover
effect. Although neither the Board of Directors nor the management of the
Company views the Reverse Stock Split as an anti-takeover measure, the Company
could use the Increased Available Shares to frustrate persons seeking to effect
a takeover or otherwise gain control of the Company.
Effectiveness of the Reverse Stock Split
The Reverse Stock Split, if approved by the Company's stockholders,
would become effective (the "Effective Date") upon the filing with the Secretary
of State of the State of Delaware of a Certificate of Amendment of the Company's
Certificate of Incorporation in substantially the form of the Reverse Stock
Split Amendment attached to this Proxy Statement as Annex A. It is expected that
such filing will take place on or shortly after the date of the Special Meeting,
assuming the stockholders approve the Reverse Stock Split. However, the exact
timing of the filing of such Certificate of Amendment will be determined by the
Board of Directors based upon its evaluation as to when such action will be most
advantageous to the Company and its stockholders, and the Board of Directors
reserves the right to delay the Reverse Stock Split Amendment for up to twelve
months following stockholder approval thereof. In addition, the Board of
Directors reserves the right, notwithstanding stockholder approval and without
further action by the stockholders, to elect not to proceed with the Reverse
Stock Split Amendment if, at any time prior to filing such Reverse Stock Split
Amendment, the Board of Directors, in its sole discretion, determines that it is
no longer in the best interests of the Company and its stockholders.
Commencing on the Effective Date, each Old Common Stock certificate
will be deemed for all corporate purposes to evidence ownership of the reduced
number of shares of Common Stock resulting from the Reverse Stock Split and any
cash which may be payable in lieu of fractional shares. As soon as practicable
after the Effective Date, stockholders will be notified as to the effectiveness
of the Reverse Stock Split and instructed as to how and when to surrender their
certificates representing shares of Old Common Stock in exchange for
certificates representing shares of New Common Stock (and, if applicable, cash
in lieu of fractional shares).
On the Effective Date, the interest of each stockholder of record who
owns fewer than three shares of Common Stock will thereby be terminated, and he,
she or it will have no right to vote as a stockholder or share in the assets of
any future earnings of the Company.
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Federal Income Tax Consequences
The following is a summary of the material anticipated Federal income
tax consequences of the Reverse Stock Split to stockholders of the Company. It
should be noted that this summary is based upon the Federal income tax laws
currently in effect and as currently interpreted. This summary does not take
into account possible changes in such laws or interpretations, including any
amendments to applicable statutes, regulations and proposed regulations, or
changes in judicial or administrative rulings, some of which may have
retroactive effect. The summary is provided for general information only, and
does not purport to address all aspects of the range of possible Federal income
tax consequences of the Reverse Stock Split and is not intended as tax advice to
any person. In particular, and without limiting the foregoing, this summary does
not account for or consider the Federal income tax consequences to stockholders
of the Company in light of their individual investment circumstances or to
holders subject to special treatment under the Federal income tax laws (for
example, life insurance companies, regulated investment companies, and foreign
taxpayers). This summary does not discuss any consequence of the Reverse Stock
Split under any state, local or foreign tax laws.
No ruling from the Internal Revenue Service or opinion of counsel will
be obtained regarding the Federal income tax consequences to the stockholders of
the Company in connection with the Reverse Stock Split. Accordingly, each
stockholder is encouraged to consult its tax adviser regarding the specific tax
consequences of the proposed Reverse Stock Split to such stockholder, including
the application and effect of federal, state, local and foreign taxes, and any
other tax laws.
The Board of Directors believes that the Reverse Stock Split would be a
tax-free recapitalization to the Company and its stockholders. If the Reverse
Stock Split qualifies as a recapitalization described in Section 368(a)(1)(E) of
the Internal Revenue Code of 1986, as amended (the "Code"), (i) no gain or loss
will be recognized by a stockholder of Common Stock who exchanges its Common
Stock for new Common Stock, except that a holder of Common Stock who receives
cash proceeds from the sale of fractional shares of Common Stock will recognize
a gain or loss equal to the difference, if any, between such proceeds and the
basis of its Common Stock allocated to its fractional share interests, and such
gain or loss, if any, will constitute capital gain or loss if its fractional
share interests are held as capital assets at the time of their sale, (ii) the
tax basis of the New Common Stock received by holders of Common Stock will be
the same as the tax basis of the Common Stock exchanged therefor, less the tax
basis allocated to fractional share interests and (iii) the holding period of
the new Common Stock in the hands of holders of New Common Stock will include
the holding period of their Common Stock exchanged therefor, provided that such
Common Stock was held as a capital asset immediately prior to the exchange.
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Conclusion
The Board of Directors has considered this Proposal and believes that
the Reverse Stock Split of the Company's issued and outstanding shares of Common
Stock is in the best interests of its stockholders.
The Directors unanimously recommend that the Company's stockholders
vote FOR the Reverse Stock Split.
ANNUAL AND QUARTERLY REPORT
All stockholders of record as of the Record Date, have been sent
herewith a copy of the Company's (i) Annual Report on Form 10-KSB for the year
ended December 31, 1998, which contains certified financial statements of the
Company for the year then ended and (ii) Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1999.
ANY STOCKHOLDER OF THE COMPANY MAY OBTAIN WITHOUT CHARGE A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1998
(WITHOUT EXHIBITS) AND QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTER ENDED
SEPTEMBER 30, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY
WRITING TO DANIEL M. PESS, CHIEF FINANCIAL OFFICER AND SECRETARY AT QUERYOBJECT
SYSTEMS CORPORATION, ONE EXPRESSWAY PLAZA, SUITE 208, ROSLYN HEIGHTS, NEW YORK
11577.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no
matters other than those set forth herein which will be presented for
consideration at the Meeting. If any other matter or matters are properly
brought before the Meeting or any adjournment thereof, the persons named in the
accompanying Proxy will have discretionary authority to vote, or otherwise act,
with respect to such matters in accordance with their judgment.
Daniel M. Pess
Secretary
January 6, 2000
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ANNEX A
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
QUERYOBJECT SYSTEMS CORPORATION
QueryObject Systems Corporation, a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of QueryObject Systems Corporation
at a duly called meeting, duly adopted resolutions setting forth a proposed
amendment of the Certificate of Incorporation of said corporation, declaring
said amendment to be advisable and proposing that said amendment be considered
by the stockholders of said corporation. The resolution setting forth the
proposed amendment is as follows:
RESOLVED, that the Board of Directors declares that it is
advisable to amend Article FOURTH of the Certificate of Incorporation
of the Corporation as follows:
FOURTH: This corporation is authorized to issue two
classes of stock to be designated, respectively, "Common
Stock" and "Preferred Stock." The total number of shares of
Common Stock this Corporation is authorized to issue is
60,000,000, par value $0.003 per share, and the total number
of shares of Preferred Stock this Corporation is authorized to
issue is 4,000,000 shares of Preferred Stock, with the Board
of Directors being hereby authorized to fix or alter the
rights, preferences, privileges and restriction granted to or
imposed upon any series of such Preferred Stock, and the
number of shares constituting any such series and the
designation thereof, or of any of them. The Board of Directors
is also authorized to increase or decrease the number of
shares of any series, prior or subsequent to the issue 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.
Simultaneously with the effective date of the filing
of this amendment to the Corporation's Certificate of
Incorporation (the "Effective Date"), each share of common
stock, par value $.001 per share, of the Corporation issued
and outstanding or held as treasury shares immediately prior
to the Effective Date (the "Old Common Stock") shall
automatically be reclassified and continued (the "Reverse
Stock Split"), without any action on the part of the holder
thereof, as one-third of one share of Common Stock. The
Corporation shall not issue
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fractional shares on account of the Reverse Split. Holders of
Old Common Stock who would otherwise be entitled to a fraction
of a share on account of the Reverse Split shall receive, upon
surrender of the stock certificates formerly representing
shares of the Old Common Stock, in lieu of such fractional
share, an amount in cash (the "Cash-in-Lieu Amount") equal to
the product of (i) the fractional share which a holder would
otherwise be entitled to, multiplied by (ii) three times [such
price as the Corporation's Board of Directors determines, in
its discretion, to the be fair market value per share of the
Old Common Stock] on the business day prior to the Effective
Date. No Interest shall be payable on the Cash-in-Lieu
Amount."
SECOND: That thereafter, the stockholders of said corporation, at a
duly called meeting of the stockholders, voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, QueryObject Systems Corporation has caused this
Certificate to be signed by _______________, its ___________, this day of
____________, 2000.
QUERYOBJECT SYSTEMS CORPORATION
By: _____________________________________________
[ ]
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