SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [_]
Check the appropriate box:
[X ] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
ObjectSoft Corporation
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
OBJECTSOFT CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On _______ __, 1998
To the Stockholders of ObjectSoft Corporation:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders
of ObjectSoft Corporation, a Delaware corporation (the "Company"), will be held
at 10:00 a.m., local time, on Thursday, _______ __, 1998, at the offices of the
Company at Continental Plaza III, 433 Hackensack Avenue, Hackensack, New Jersey
07601, for the following purposes:
1. To elect two Class II directors to the Company's Board of
Directors to hold office until the Company's second Annual
Meeting of Stockholders following their election or until
their successors are duly elected and qualified;
2. To adopt amendments to the Company's 1996 Stock Option Plan
(the "1996 Plan") to increase the number of shares which may
be issued thereunder from 250,000 to 750,000 shares and to
eliminate the Non-Employee Director formula option grants and
certain provisions relating thereto currently set forth in the
1996 Plan;
3. To approve the issuance of the Company's securities pursuant
to a Private Equity Line of Credit Agreement dated as of May
13, 1998 among the Company, Settondown Capital International
Ltd. and the investors referred to therein.
4. To ratify the appointment of Richard A. Eisner & Company, LLP
as the independent auditors of the Company; and
5. To transact such other business as may properly come before
the Annual Meeting and any adjournments or postponements
thereof.
The Board of Directors has fixed the close of business on _______,
__ 1998 as the record date for determining those stockholders entitled to notice
of, and to vote at, the Annual Meeting and any adjournments or postponements
thereof. A complete list of the stockholders entitled to vote will be available
for inspection by any stockholder during the meeting; in addition, the list will
be open for examination by any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least 10 days prior
to the meeting, at the offices of the Company at Continental Plaza III, 433
Hackensack Avenue, Hackensack, New Jersey 07601.
Whether or not you expect to be present at the meeting, please
promptly mark, sign and date the enclosed proxy and return it in the enclosed
pre-addressed envelope. No postage is required if mailed in the United States.
By Order of the Board of Directors
David E. Y. Sarna
Chairman and Secretary
<PAGE>
Hackensack, New Jersey
___________ ___, 1998
THIS IS AN IMPORTANT MEETING AND ALL STOCKHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. THOSE STOCKHOLDERS WHO ARE UNABLE TO ATTEND ARE RESPECTFULLY
URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE.
STOCKHOLDERS WHO EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING,
REVOKE THEIR PROXY AND VOTE THEIR SHARES IN PERSON.
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<PAGE>
1998 ANNUAL MEETING OF STOCKHOLDERS
OF
OBJECTSOFT CORPORATION
--------------------------
PROXY STATEMENT
--------------------------
The Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of ObjectSoft Corporation, a Delaware corporation (the
"Company"), of proxies from the holders of the Company's common stock, par value
$.0001 per share (the "Common Stock"), for use at the Annual Meeting of
Stockholders of the Company to be held on Thursday, _______ __, 1998, or at any
adjournments or postponements thereof (the "Annual Meeting"), pursuant to the
enclosed Notice of Annual Meeting.
The approximate date that this Proxy Statement and the enclosed
proxy are first being sent to stockholders (the "Stockholders") of the Company
is ________, 1998. Stockholders should review the information provided herein in
conjunction with the Company's Annual Report to Stockholders for the year ended
December 31, 1997 which accompanies this Proxy Statement. The Company's
principal executive offices are located at Continental Plaza III, 433 Hackensack
Avenue, Hackensack, New Jersey 07601, and its telephone number is (201)
343-9100. The Company can also be reached on the Internet at
www.objectsoftcorp.com.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should you so desire. Stockholders have an unconditional right to revoke their
proxy at any time prior to the exercise thereof, either in person at the Annual
Meeting or by filing with the Company's Secretary at the Company's headquarters
a written revocation or duly executed proxy bearing a later date; however, no
such revocation will be effective until written notice of the revocation is
received by the Company at or prior to the Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement,
the Notice of Annual Meeting of Stockholders and the enclosed proxy is to be
borne by the Company. In addition to the use of mail, employees of the Company
may solicit proxies personally and by telephone. The Company's employees will
receive no compensation for soliciting proxies other than their regular
salaries. The Company may request banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to their principals and
to request authority for the execution of proxies. The Company may reimburse
such persons for their expenses in so doing.
<PAGE>
PURPOSES OF THE MEETING
At the Annual Meeting, the Stockholders will consider and vote upon
the following matters:
1. The election of two Class II directors to the Company's Board
of Directors to serve until the Company's second Annual
Meeting of Stockholders following their election or until
their successors are duly elected and qualified;
2. The adoption of amendments to the Company's 1996 Stock Option
Plan (the "1996 Plan") to increase the number of shares which
may be issued thereunder from 250,000 to 750,000 shares and to
eliminate the Non-Employee Director formula option grants and
certain provisions relating thereto currently set forth in the
1996 Plan;
3. To approve the issuance of the Company's securities pursuant
to a Private Equity Line of Credit Agreement dated as of May
13, 1998 among the Company, Settondown Capital International
Ltd. and the investors referred to therein.
4. The ratification of the appointment of Richard A. Eisner &
Company, LLP as the independent auditors of the Company for
the fiscal year ending December 31, 1998; and
5. Such other business as may properly come before the Annual
Meeting, including any adjournments or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy,
all shares represented by valid proxies received pursuant to this solicitation
(and which have not been revoked in accordance with the procedures set forth
above) will be voted in favor of the election of the nominees for director named
below, in favor of the amendments to the 1996 Plan, and in favor of the issuance
of the Preferred Stock and in favor of ratification of the appointment of
auditors. In the event a stockholder specifies a different choice by means of
the enclosed proxy, such shares will be voted in accordance with the
specification so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on ________,
1998 as the record date (the "Record Date") for determining Stockholders
entitled to notice of and to vote at the Annual Meeting. As of _______ _, 1998,
there were _______ shares of Common Stock, par value $.0001 per share, issued
and outstanding. Each share of Common Stock outstanding on the Record Date is
entitled to one vote at the Annual Meeting on each matter submitted to
Stockholders for approval at the Annual Meeting.
The attendance, in person or by proxy, of the holders of a majority
of the outstanding shares of Common Stock entitled to vote at the Annual Meeting
is necessary to constitute a quorum. A vote of the holders of a majority of the
voting power of the issued and outstanding Common Stock of the Company, present
in person or represented by proxy at the Annual Meeting and entitled to vote at
the Annual Meeting will be required to for the election of Directors, for the
approval of the amendments to the Company's 1996 Plan and for the approval of
the issuance of the Preferred Stock. Under applicable Delaware law, abstentions
and broker non-votes will not have the effect of votes in opposition to the
election of a director, but abstentions will be treated as votes against all
other proposals.
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<PAGE>
SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 30, 1998, information
with respect to the beneficial ownership of the Company's Common Stock by (i)
each person known by the Company to beneficially own more than 5% of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
each Executive Officer named in the Summary Compensation Table herein titled
"Executive Compensation" and (iv) all directors and executive officers of the
Company as a group.
Number of Shares of
Name and Common
Address of Stock Beneficially Percentage
Beneficial Owners(1) Owned(2) Ownership(3)
- -------------------- -------- ------------
David E. Y. Sarna (4) (5) 647,500 15.48%
George J. Febish (4) (6) 907,500 21.7%
Melvin Weinberg, Esq. (7) 300,000 7.35%
c/o Parker Chapin Flattau &
Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
Daniel E. Ryan (8) 15,000 *
Gunther L. Less (8) 15,000 *
All officers and directors as 1,665,000 38.60%
a group (4 persons) (3)(9)
- --------------
* Less than 1%.
(1) Unless otherwise indicated, the business address of each of the officers
and directors is c/o ObjectSoft Corporation, Continental Plaza III, 433
Hackensack Avenue, Hackensack, New Jersey 07601.
(2) Unless otherwise noted, the Company believes that all persons named have
sole voting and investment power with respect to all shares of Common
Stock listed as owned by them.
(3) Each person's percentage interest is determined assuming that all options,
warrants and convertible securities that are held by such person (but not
by anyone else) and which are exercisable or convertible within 60 days
have been exercised for or converted into Common Stock.
(4) Includes, for each of Messrs. Sarna and Febish, immediately exercisable
warrants to purchase 50,000 shares of Common Stock and immediately
exercisable options to purchase 50,000 shares of Common Stock granted
under the Company's 1996 Plan.
(Footnote explanations continue on following page)
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<PAGE>
(5) Includes 150,000 shares held by The David E. Y. Sarna Family Trust ("Sarna
Trust"), of which Rachel Sarna, the wife of Mr. Sarna, and Melvin
Weinberg, Esq. are the trustees. The children of Mr. and Mrs. Sarna are
the sole beneficiaries. Mr. Sarna disclaims beneficial ownership of the
shares held by the Sarna Trust.
(6) Includes 150,000 shares held by The George J. Febish Family Trust ("Febish
Trust"), of which Janis Febish, the wife of Mr. Febish, and Melvin
Weinberg, Esq. are the trustees. The children of Mr. and Mrs. Febish are
the sole beneficiaries. Mr. Febish disclaims beneficial ownership of the
shares held by the Febish Trust.
(7) Melvin Weinberg, Esq., by virtue of his shared dispositive power as a
trustee over the shares of Common Stock held by both the Sarna Trust and
the Febish Trust (collectively the "Family Trusts"), may be deemed a
beneficial owner of a total of 300,000 shares of Common Stock,
representing the aggregate share holdings of the Family Trusts. The Sarna
Trust was set up by Mr. Sarna for the benefit of his children. Mr.
Weinberg and Mrs. Sarna are trustees of the Sarna Trust and share
dispositive power with respect to the shares of Common Stock owned by the
Sarna Trust, but Mrs. Sarna has the sole voting power with respect to such
shares. The Febish Trust was set up by Mr. Febish for the benefit of his
children. Mr. Weinberg and Mrs. Febish are trustees of the Febish Trust
and share dispositive power with respect to the shares of Common Stock
owned by the Febish Trust, but Mrs. Febish has the sole voting power with
respect to such shares. Mr. Weinberg disclaims beneficial ownership of the
shares of Common Stock held by the Family Trusts.
(8) Includes, for each of Messrs. Ryan and Less, immediately exercisable stock
options to purchase 15,000 shares of Common Stock granted under the
Company's 1996 Plan.
(9) Includes 130,000 shares of Common Stock which certain of the current
Executive Officers and Directors have a right to acquire pursuant to
presently exercisable stock options and 100,000 shares of Common Stock
which certain of the current Executive Officers and Directors have a right
to acquire pursuant to presently exercisable warrants.
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<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS; NOMINEES
The Company's Bylaws provides that the number of directors
constituting the Company's Board of Directors shall be not less than three nor
more than seven as fixed from time to time by the Board of Directors or the
Stockholders. The Board of Directors has fixed at four the number of directors
that will constitute the Board for the ensuing year.
Pursuant to the Company's Certificate of Incorporation and Bylaws,
the Board of Directors is divided into two classes. The term of office of the
current Class II directors expires at the Annual Meeting. The term of office of
Class I directors expires at the Company's 1999 Annual Meetings of Stockholders.
Directors elected to succeed those whose terms expire are elected to a term of
office expiring at the second Annual Meeting of Stockholders following their
election. The current directors of the Company and their respective Classes and
terms of office are as follows:
Term
Director Class Expires At
-------- ----- ----------
George J. Febish II 1998 Annual Meeting
Gunther L. Less I 1999 Annual Meeting
Daniel E. Ryan II 1998 Annual Meeting
David E. Y. Sarna I 1999 Annual Meeting
Accordingly, two Class II directors are to be elected at the Annual
Meeting, for a term expiring at the Company's 2000 Annual Meeting of
Stockholders. All of the Company's current Class II directors, Mr. Febish and
Mr. Ryan, have been nominated to be reelected as Class II directors at the
Annual Meeting.
The Board of Directors has no reason to believe that any of the
nominees will refuse to act or be unable to accept election; however, in the
event that any of the nominees is unable to accept election or if any other
unforeseen contingencies should arise, each proxy that does not direct otherwise
will be voted for the remaining nominees, if any, and for such other person(s)
as may be designated by the Board of Directors.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
Name Age Position
- ---- --- --------
David E. Y. Sarna1 48 Chairman, Secretary and Director
George J. Febish1 49 President, Treasurer and Director
Daniel E. Ryan1 2 3 4 50 Director
Gunther L. Less2 4 67 Director
- ---------------
1 Member of Executive Committee.
2 Member of Audit Committee.
3 Member of Compensation Committee.
4 Member of Stock Option Plan Committee
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<PAGE>
BACKGROUND OF NOMINEES
George J. Febish together with Mr. Sarna founded the Company in
1990. Mr. Febish has been the President, Co-Chief Executive Officer, Treasurer
and a director of the Company since December 1990. He has also been, since 1994,
a Contributing Editor of Datamation magazine. Prior to co-founding the Company,
Mr. Febish was Executive Vice President and Chief Operating Officer of Image
Business Systems Corporation, a computer software development company, from 1988
to 1990. Prior to joining Image Business Systems Corporation, Mr. Febish was the
Director of Marketing at ISS, a computer software company that developed ISS
Three(TM). Prior to joining ISS, Mr. Febish was the Eastern Regional Sales
Manager for Bool & Babbage. In 1970, Mr. Febish began his professional career
with New York Life Insurance Company. Mr. Febish holds a BS degree from Seton
Hall University. He is the co-author, with Mr. Sarna, of PC Magazine Windows
Rapid Application Development and the author of numerous published articles.
Daniel E. Ryan has been a director since 1991. Mr. Ryan has been
employed by New York Life Insurance Company since July, 1965 where, since 1981,
he has held the title of Corporate Vice President. Mr. Ryan is the head of the
Service Center Development of New York Life Insurance Company's Information
Systems organization. Mr. Ryan holds an MBA in Computer Science from Baruch
College and a BS/BA in Industrial Management from Manhattan College. Mr. Ryan is
a Certified Systems Professional.
BACKGROUND OF CONTINUING DIRECTORS
David E. Y. Sarna together with Mr. Febish founded the Company in
1990. Mr. Sarna has been the Chairman, Co-Chief Executive Officer, Secretary and
a director of the Company since December 1990. He has also been, since 1994, a
Contributing Editor of Datamation magazine. Prior to co-founding the Company,
Mr. Sarna founded Image Business Systems Corporation, a computer software
development company, in 1988. Prior to founding Image Business Systems
Corporation, Mr. Sarna was formerly Executive Vice-President and a co-founder of
International Systems Services Corp., a computer software company that developed
ISS Three(TM). From 1976 to 1981, Mr. Sarna was employed by Price Waterhouse &
Co., as a management consultant, beginning as a senior consultant and rising to
the position of senior manager. From 1970 to 1976 Mr. Sarna was employed by IBM
Corporation in technical and sales positions. Mr. Sarna began his professional
career at Honeywell in 1968. Mr. Sarna holds a BA degree from Brandeis
University and did graduate work at the Technion - Israel Institute of
Technology. Mr. Sarna is a Certified Systems Professional and a Certified
Computer Programmer. He is the co-author, with Mr. Febish, of PC Magazine
Windows Rapid Application Development (published by Ziff- Davis Press in 1994),
several other books and over 50 articles published in professional magazines.
Mr. Sarna is also the co-inventor of patented software for the recognition of
bar-codes.
Gunther L. Less has been a director of the Company since December
1996. Mr. Less owns and operates GLL TV Enterprises, through which he has acted
as the producer and host of "Journey to Adventure," a travel-documentary show
that has appeared in syndication on broadcast and cable television networks for
over 35 years. He also acts as a special media consultant to the airline
industry and has held various executive and consulting positions in the travel
industry, including as an Agency Manager for American Express, President of
Planned Travel, Inc., a subsidiary of Diners Club, Inc., System Sales and
Marketing Manager for Avis Rent-A-Car and Manager-External Affairs for Olympic
Airways and personal
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<PAGE>
consultant to the late Aristotle Onassis, and consultant to Hyatt International
Corporation. He is also a past president of the American Association of Travel
Editors. Mr. Less is the designee of Renaissance Financial Securities
Corporation ("Renaissance"), the underwriter of the Company's securities in the
initial public offering completed in November 1996 (the "Public Offering").
The Company's officers are elected annually and serve at the
discretion of the Board of Directors for one year subject to any rights provided
in employment agreements. Certain employment agreements are described below
under "Executive Compensation - Employment Agreements".
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1997, the Board of
Directors held two meetings and took certain actions on seven other occasions by
written consent. During such year, no director attended fewer than 75 percent of
the aggregate of (i) the number of meetings of the Board of Directors held
during the period he served on the Board, and (ii) the number of meetings of
committees of the Board of Directors held during the period he served on such
committees.
The Stock Option Committee was composed of Mr. Daniel E. Ryan. The
function of this committee is to administer the Company's 1996 Plan. The Stock
Option Committee met once during fiscal 1997.
The Compensation Committee, composed of Mr. Daniel E. Ryan, has
authority over the salaries, bonuses and other compensation arrangements of the
executive officers of the Company, and it also has the authority to examine,
administer and make recommendations to the Board of Directors with respect to
benefit plans and arrangements (other than the stock option plans which are
administered by the Stock Option Committee) of the Company. The Compensation
Committee met twice during fiscal 1997.
From January 1, 1997 through March 22, 1997, the Audit Committee
during fiscal 1997 was composed of Mr. Daniel E. Ryan and Mr. Julius Goldfinger.
On March 22, 1997 Mr. Goldfinger resigned as a member of the Board of Directors
and of the Audit Committee. Until February 19, 1998 there was a vacancy on the
Audit Committee, and at which time Mr. Gunther L. Less was appointed as a member
of the Audit Committee. The Audit Committee's function is to nominate
independent auditors, subject to approval by the Board of Directors, and to
examine and consider matters related to the audit of the Company's accounts, the
financial affairs and accounts of the Company, the scope of the independent
auditors' engagement and their compensation, the effect on the Company's
financial statements of any proposed changes in generally accepted accounting
principles, disagreements, if any, between the Company's independent auditors
and management, and matters of concern to the independent auditors resulting
from the audit, including the results of the independent auditors' review of
internal accounting controls. The Audit Committee met once during fiscal 1997.
The Board of Directors has no standing nominating committee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Act"), as
amended, requires the Company's Executive Officers and Directors, and any
persons who own more than 10% of any class of the Company's equity securities
which are registered under the Act to file certain reports relating to their
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<PAGE>
ownership of such securities and changes in such ownership with the Securities
and Exchange Commission and NASDAQ, and to furnish the Company with copies of
such reports. To the Company's knowledge, all Section 16(a) filing requirements
applicable to such Officers, Directors and owners of over 10% of the Company's
equity securities registered under the Act, during the year ended December 31,
1997, have been satisfied.
1996 STOCK OPTION PLAN
The Company's 1996 Stock Option Plan (the "1996 Plan") was ratified
and adopted by the Board of Directors on July 15, 1996 and approved by the
Stockholders at a Special Meeting on September 16, 1996. The purpose of the 1996
Plan is to provide an incentive to key employees (including directors and
officers who are key employees) and to consultants and advisors and directors
who are not employees of the Company and to offer an additional inducement in
obtaining the services of such persons.
The 1996 Plan is administered by a committee of the Board of
Directors, the Stock Option Plan Committee (the "Committee") consisting of not
less than two Directors, each of whom must be a non-employee Director within the
meaning of regulations promulgated by the Securities and Exchange Commission.
The Committee has the authority under the 1996 Plan to determine the terms of
options granted under the 1996 Plan, including, among other things, the
individuals who shall receive options, the times when they shall receive them,
whether an incentive stock option and/or non-qualified option shall be granted,
the number of shares to be subject to each option and the date or dates each
option shall become exercisable.
No Incentive Stock Option (as the term is defined in the 1996 Plan)
may be granted under the 1996 Plan after March 15, 2006. The Board of Directors,
without further approval of the Stockholders, may amend, suspend or terminate
the 1996 Plan, in whole or in part, at any time and from time to time in such
respects as it deems advisable (including without limitation to conform with
applicable law or the regulations or rulings thereunder), but may not without
the approval of the Stockholders make any alteration or amendment thereof which
would (i) increase the maximum number of shares of Common Stock for which
options may be granted under the 1996 Plan (except for anti-dilution
adjustments) or (ii) materially increase the benefits to participants under the
1996 Plan or (iii) change the eligibility requirements for individuals entitled
to receive options under the 1996 Plan. No termination, suspension or amendment
of the 1996 Plan shall, without the consent of the holder of an existing option
affected thereby, adversely affect the option holders rights under such option.
The power of the Committee to construe and administer any options granted under
the 1996 Plan prior to the termination or suspension of the 1996 Plan
nevertheless shall continue after such termination or during such suspension.
The 1996 Stock Option Plan is proposed to be amended under Proposal
I to increase the number of shares of Common Stock for which options may be
granted under the 1996 Plan from 250,000 to 750,000 shares and to delete the
Formula Grants (as defined below).
NON-EMPLOYEE DIRECTORS' COMPENSATION
Until March 1996, non-employee directors of the Company received no
compensation for attendance at Board meetings or committee meetings of the
Board; however, each non-employee director was reimbursed for out-of-pocket
expenses incurred in connection with attendance at meetings or other Company
business.
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<PAGE>
In March 1996 the Board of Directors adopted the 1996 Plan pursuant
to which each non-employee director of the Company on the date the 1996 Plan was
approved by Stockholders was granted an option to purchase 10,000 shares of
Common Stock. Thereafter when each non-employee director first becomes a
director, such individual is granted an option to purchase 10,000 shares of
Common Stock. In addition, immediately following each Annual Meeting of
Stockholders at which directors are elected, each non-employee director of the
Company and is then a director is granted an option to purchase an additional
5,000 shares of Common Stock (the "Formula Grants"). The exercise price of each
share of Common Stock under any option granted to a non-employee director under
the 1996 Plan shall be equal to the fair market value of a share of Common Stock
subject to such option on the date of the grant. Proposal I being presented to
the Stockholders contemplated the deletion of the Formula Grants.
During the fiscal year ended December 1997, Gunther L. Less received
an option to purchase 10,000 shares of Common Stock at a purchase price of $5.25
upon becoming a non-employee director on January 1, 1997. Following the 1997
Annual Meeting of Stockholders on May 14, 1997, Daniel E. Ryan and Mr. Less each
received as a Formula Grant an option to purchase 5,000 shares of Common Stock
at a purchase price of $5.25.
EXECUTIVE COMPENSATION
The following table sets forth information concerning annual and
long-term compensation, paid or accrued, for the Chief Executive Officer and for
each other executive officer of the Company whose compensation exceeded $100,000
in fiscal 1997 (the "Named Executive Officers") for services in all capacities
to the Company during the last three fiscal years.
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
Annual Compensation
-------------------
Long-Term
Compensation
Other Awards(1)
Name and Annual Securities
Principal Compen- Underlying All Other
Position Year Salary(2) sation (3) Options/SARs Compensation
- -------- ---- --------- ---------- ------------ ------------
<S> <C> <C> <C>
David E.Y. Sarna, Chairman, 1997 $208,000 -- 50,000 --
Secretary and Co-Chief 1996 $208,000 -- 50,000 --
Executive Officer 1995 $200,000 -- -- --
George J. Febish, President, 1997 $208,000 -- 50,000 --
Treasurer and Co-Chief 1996 $208,000 -- 50,000 --
Executive Officer 1995 $200,000 -- -- --
</TABLE>
- ----------------
(1) None of the Named Executive Officers received any Restricted Stock Awards
or LTIP Payouts in 1995, 1996 or 1997.
(Footnote explanations continue on following page)
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<PAGE>
(2) Includes $107,220 that was accrued but not paid to each of Messrs. Sarna
and Febish in 1995. At December 31, 1995, the total amount of compensation
accrued but not paid to each of Messrs. Sarna and Febish, inclusive of
prior years, was $195,844. Such amounts were subsequently paid in full,
with $100,000 and $50,000 paid to each of Messrs. Sarna and Febish from
the proceeds of a bridge loan offering of notes and warrants completed in
June 1996 (the "Bridge Loan Offering") and an offering of units of Common
Stock and warrants completed in August 1996 (the "July 1996 Offering"),
respectively, and the balance paid from operating revenues.
(3) As to each individual named, the aggregate amounts of personal benefits
not included in the Summary Compensation Table do not exceed the lesser of
either $50,000 or 10% of the total annual salary and bonus reported for
the Named Executive Officer.
STOCK OPTIONS
There were no grants of stock options nor stock appreciation rights
("SARs") to the Named Executive Officers during fiscal 1997. There were no stock
option nor SAR exercises during fiscal 1997 and no SARs were outstanding at
December 31, 1997.
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with each of David
E. Y. Sarna and George J. Febish, effective as of July 1, 1996, which expires on
December 31, 2001. The employment agreements each provide for a current annual
base salary of $208,000. Each of the employment agreements also provides for a
bonus of 5% per annum of the Company's Earnings Before Depreciation, Interest,
Taxes and Amortization. In addition, on an annual basis, the Board of Directors
will consider paying an additional bonus to each of Messrs. Sarna and Febish
that is based upon the increase in the Company's gross revenues, taking into
account any increase in the Company's expenses. The annual base salary under the
current agreements may be increased at the discretion of the Board of Directors.
The agreements provide for (i) a severance payment of the base compensation and
bonus of the prior full fiscal year and payment of all medical, health,
disability and insurance benefits then payable by the Company for the longer of
(a) the remainder of the term of the employment agreement or (b) 12 months, as
well as (ii) the base compensation and bonus accrued to the date of termination,
upon the occurrence of (x) termination by the Company without cause, (y)
termination by the employee for good reason or (z) a change in control of the
Company, if the employee resigns after the occurrence of the such change in
control. Each of the employment agreements limit the severance payments to an
amount that is less than the amount that would cause an excise tax or loss of
deduction under the rules relating to golden parachutes under the Internal
Revenue Code.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
EXTENSION OF EXPIRATION DATES OF CERTAIN WARRANTS
Messrs. Sarna and Febish received certain warrants (the "Warrants ")
to purchase 50,000 shares of Common Stock, exercisable until April 30, 1998. The
Company extended the exercise date of the Warrants to April 30, 2000 in
consideration of their waiver of the registration rights with respect to the
Company's 1996 Public Offering and their agreement to enter into an 18 month
lock-up agreement with Renaissance.
LOAN TO OFFICER
On January 2, 1997 the Company extended to Mr. Sarna a loan in the
amount of $440,000 (the "Loan "). The Loan was approved by the Board of the
Directors of the Company, with Mr. Sarna abstaining. Subsequently, the Board of
Directors, with Mr. Sarna abstaining, unanimously agreed to extend the maturity
date of the Loan from November 30, 1997 to May 31, 1998. Mr. Sarna utilized the
funds for a block purchase of 80,000 shares of the Company's Common Stock from
the market maker, who was also the underwriter of the Company's Public Offering,
in an open market transaction. In March 1998, Mr. Sarna executed a Security
Agreement in favor of the Company in which he pledged as collateral for the Loan
certain contract rights to receive an option to acquire certain marketable
securities.
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<PAGE>
PROPOSAL 2 - AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN
The Company's 1996 Plan was adopted by the Board of Directors on
March 15, 1996 and was approved by the Stockholders on September 16, 1996. The
number of shares available under the 1996 Plan is 250,000. As of May 15, 1998,
no options had been exercised and options to purchase 250,000 shares held by
fourteen optionees were outstanding at a weighted average per share exercise
price of $3.96.
PROPOSED AMENDMENTS
On March 3, 1998 the Board of Directors unanimously adopted and
recommended for submission to the Stockholders for their approval at the Annual
Meeting, the amendments to the 1996 Plan (the "Amendments") to:
(i) to increase the number of shares of Common Stock for which
options may be granted under the 1996 Plan from 250,000 to 750,000. The Board of
Directors believes that, although the Company has not experienced difficulty in
attracting and retaining personnel, the 1996 Plan has been and will be
instrumental in attracting and retaining employees, officers and consultants of
outstanding ability and that this objective will be furthered by providing
additional shares for future option grants; and
(ii) delete the sections in the 1996 Plan that provide that (i) each
individual who becomes a Non-Employee Director shall on the date of the
director's initial election and each election to the Board of Directors be
granted an option to purchase 10,000 shares of Common Stock for each year of the
term to which the director is elected or reelected at a price equal to 100% of
the fair market value of the Common Stock on the date of election or reelection
determined in accordance with the provision of the 1996 Plan; (ii) such options
be for a term of 10 years, and (iii) such options vest in three equal
installments on each of the first three anniversaries of the date of grant.
These provisions for Formula Grants had been required in order for such option
grants to be exempt from the six-month short swing profit provisions of Section
16(b) of the Act. Recent amendments to Rule 16b-3 promulgated under the Act no
longer require that the terms of such Formula Grants be specified in the 1996
Plan in order for the exemption to be available. The Board of Directors believes
that by deleting the provision for Formula Grants, the Company will have greater
flexibility in granting options to Non-Employee Directors which will facilitate
its attracting and retaining qualified Non-Employee Directors.
The following is a summary of the terms of the 1996 Plan:
TYPES OF GRANTS AND AWARDS
The 1996 Plan permits the grant of options which may either be
"incentive stock options" ("ISOs"), within the meaning of Section 422 of the
Code, or "non-qualified stock options" ("NQSOs"), which do not meet the
requirements of Section 422 of the Code.
Prior to giving effect to the proposed amendments, options to
purchase 10,000 shares of Common Stock are to automatically granted to each
Non-Employee Director upon first becoming a director and 5,000 shares of Common
Stock are to be automatically granted to each Non-Employee Director
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<PAGE>
immediately following each annual meeting of Stockholders at which Directors are
elected. The options shall be exercisable for a term of five years commencing on
the date of grant. One of the proposed amendments to the 1996 Plan is to delete
the provisions described in this paragraph.
ELIGIBILITY
All employees (including officers) and directors of the Company or
its subsidiaries, consultants and advisors to, the Company or its subsidiaries
are eligible to be granted options under the 1996 Plan. The Company currently
has approximately 18 employees, 15 of which are full-time employees.
STOCK SUBJECT TO THE 1996 PLAN
The total number of shares of Common Stock for which options may be
granted under the 1996 Plan may not exceed 250,000, subject to possible
adjustment in the future. One of the proposed amendments to the 1996 Plan is to
increase the number of shares for which options may be granted under the 1996
Plan to 750,000. Any shares of Common Stock subject to any option which for any
reason expires, is canceled or is terminated unexercised or which ceases for any
reason to be exercised will again become available for granting of options under
the 1996 Plan.
ADMINISTRATION
The 1996 Plan is administered by a committee of the Board of
Directors of not less than two Directors, each of whom must be a "Non-Employee
Director" within the meaning of regulations promulgated by the Securities and
Exchange Commission. The Board of Directors has designated the Stock Option Plan
Committee of the Board consisting of Messrs. Less and Ryan to administer the
1996 Plan. The Stock Option Plan Committee has the authority under the 1996 Plan
to determine the terms of options granted under the 1996 Plan, including, among
other things, the individuals who shall receive options, the times when they
shall receive them, whether an incentive stock option and/or non-qualified
option shall be granted, the number of shares to be subject to each option, and
the date or dates each option shall become exercisable.
EXERCISE PRICE
The exercise price of options granted under the 1996 Plan is
determined by the Stock Option Plan Committee, but in the case of an ISO may not
be less than 100% of the fair market value of the Common Stock on the date the
ISO is granted (110% of such fair market value in the case of ISOs granted to an
optionee who owns or is deemed to own stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company (a "Ten
Percent Stockholder")). The exercise price of the shares of Common Stock under
each Non-Employee Director Option shall be equal to the fair market value of the
Common Stock subject to such option on the date of grant. The exercise price is
payable at the time of exercise of the option in cash or by certified check,
previously acquired shares of Common Stock (valued at their fair market value on
the date of exercise of the option) or a combination thereof, in the discretion
of the Stock Option Plan Committee. The Stock Option Plan Committee may, in its
discretion, permit payment of the exercise price of options by delivery of
properly executed exercise notices, together with a copy of irrevocable
instructions from the optionee to a broker acceptable to the Stock Option Plan
Committee to deliver promptly to the Company the amount of sale or loan proceeds
to pay such exercise.
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<PAGE>
To facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
TERMS AND CONDITIONS
As to options granted to employees and consultants:
i. Options granted to employees and consultants may be
granted for such terms as is established by the Stock
Option Committee, provided that, the term of each ISO
shall be for a period not exceeding ten years from the
date of the grant, and further provided that ISOs
granted to a Ten Percent Stockholder shall be for a
period not exceeding five years from the date of grant.
ii. If an employee or consultant optionee's relationship
with the Company is terminated for any reason other than
"disability" or death, the option may be exercised at
any time within three months thereafter to the extent
exercisable on the date of termination. However, in the
event such relationship is terminated either (a) for
cause, or (b) without the consent of the Company, such
option shall terminate immediately.
iii. In the event of the death of an optionee while an
employee of, or consultant or advisor to the Company,
within three months after the termination of such
relationship (unless such termination was for cause or
without the consent of the Company) or within one year
following the termination of such relationship by reason
of the optionee's "disability", the option may be
exercised, to the extent exercisable on the date of his
death, by the optionee's legal representatives at any
time within one year after death, but not thereafter and
in no event after the date the option would otherwise
have expired.
iv. An option may not be transferred other than by will or
the laws of descent and distribution and may be
exercised during the lifetime of the optionee only by
the optionee or by the optionee's legal representatives.
v. The foregoing notwithstanding, in no case may options be
exercised later than the expiration date specified in
the grant.
As to options granted to Non-Employee Directors:
i. Prior to giving effect to the proposed amendments,
options granted to Non- Employee Directors are for a
term of five years commencing on the date of the grant.
Every individual who, on the date the Plan is adopted,
is a Non-Employee Director (as defined in Paragraph 19)
shall be granted on such date a Non- Employee Director
Option to purchase 10,000 shares of Common Stock.
Thereafter, on the date an individual first becomes a
Non-Employee Director, he shall be granted an option to
purchase 10,000 shares of Common Stock. In addition,
immediately following each annual meeting of
Stockholders at which Directors are elected, every
individual who, at such time, is a Non-Employee
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<PAGE>
Director (whether or not elected at such meeting) shall
be granted at such time a Non-Employee Director Option
to purchase 5,000 shares of Common Stock. In the event
the remaining shares available for grant under the Plan
are not sufficient to grant the Non-Employee Director
Options to each such Non-Employee Director at any time,
the number of shares subject to the Non-Employee
Director Options to be granted at such time shall be
reduced proportionately. One of the proposed amendments
to the 1991 Plan is to delete the provisions described
in this paragraph (i).
ii. The Non-Employee Director Option shall not be affected
by the optionee ceasing to be a director of the Company
or becoming an employee of the Company, any of its
Subsidiaries or a Parent; provided, however, that if he
is terminated for cause, such option shall terminate
immediately.
iii. The term of a Non-Employee Director Option shall not be
affected by the death or disability of the optionee. If
an optionee holding a Non-Employee Director Option dies
during the term of such option, the option may be
exercised at any time during its term by his/her legal
representative.
iv. An option may not be transferred other than by will or
the laws of descent and distribution and may be
exercised during a holder's lifetime only by the holder
or by his/her or legal representative. Except to the
extent provided above, options may not be assigned,
transferred, pledged, hypothecated or disposed of in any
way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment or similar
process, and any such attempted assignment, transfer,
pledge, hypothecation or disposition shall be null and
void ab initio and of no force or effect.
v. The foregoing notwithstanding, in no case may options be
exercised later than the expiration date specified in
the grant.
VOTE REQUIRED
A vote of the holders of a majority of the voting power of the
issued and outstanding Common Stock of the Company, present in person or
represented by proxy at the Annual Meeting and entitled to vote at the Annual
Meeting, is required to approve the amendments to the 1996 Plan.
The Company's Board of Directors recommends a vote FOR this
proposal.
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<PAGE>
PROPOSAL 3 - TO APPROVE THE ISSUANCE OF THE COMPANY'S SECURITIES
PURSUANT TO A PRIVATE EQUITY LINE OF CREDIT AGREEMENT
GENERAL
On May 13 1998, the Company entered into a Private Equity Line of
Credit Agreement ("Agreement") with certain investors and with Settondown
Capital International Ltd. ("Placement Agent") contemplating a potential funding
of up to $7.1 million ("Funding"). The Funding provides for the private
placement by the Company of (i) 444,444 shares of Common Stock for $900,000
together with warrants exercisable to purchase 18,000 shares of Common Stock;
(ii) $1.2 million in stated value of 6% Series C Non-Voting Convertible
Preferred Stock ("Preferred Stock"), together with warrants exercisable to
purchase up to 24,000 shares of Common Stock; and (iii) up to $5 million for
Common Stock pursuant to certain put rights ("Equity Line of Credit"), together
with warrants exercisable to purchase up to 30,000 shares of Common Stock
(collectively, the "Securities").
The Company intends to use the proceeds from the sale of the
securities for working capital and general corporate purposes.
COMMON STOCK AND WARRANTS
On May 13, 1998 ("Subscription Date"), 444,444 shares of Common
Stock were purchased at an initial price of $2.025 per share ("Closing Price"),
which was 80% of the average of the closing bid prices of the Common Stock for
the five day trading period immediately preceding the Subscription Date,
together with warrants exercisable to purchase 18,000 shares of Common Stock at
an exercise price of $2.43 per share.
The purchasers of the Common Stock received certain reset rights
("Reset Rights") which provide that the Closing Price is subject to a first
repricing on the date ("Repricing Date") which is the earlier of (i) the date a
registration statement covering certain of the securities has been declared
effective by the Securities and Exchange Commission ("Effective Date") or (ii)
the first anniversary of the Subscription Date. If the closing bid price of the
Common Stock on the Repricing Date ("First Reset Price") is lower than the
Closing Price, then the purchase price of one-half of the Common Stock will be
reduced to the First Reset Price. If the closing bid price of the Common Stock
on the date 30 days from the Repricing Date ("Second Reset Price") is lower than
the Closing Price then the purchase price of the balance of the Common Stock
will be reduced to the Second Reset Price. Should the First Reset Price or
Second Reset Price be lower than the initial price paid by the purchasers, the
Company will issue additional shares to account for the deficiency ("Repricing
Shares"). The Company will not be able, under the Funding, to issue an amount of
shares of Common Stock equal to 20% or more of the outstanding Common Stock of
the Company unless this proposal is approved by the stockholders of the Company.
See "Reason for Stockholder Approval". In the event that approval is not
obtained from the stockholders of the Company, the Company is obligated under
the Agreement to pay to the investors the market value of the Repricing Shares,
to the extent the issuance of such shares is restricted by the failure to obtain
such approval.
In addition, the Company has received certain repurchase rights with
regard to the Common Stock in the event the closing bid price of the Common
Stock falls below $1.50 per share. Each of the investors has agreed never to own
in excess of 4.95% of the Company's outstanding shares of Common Stock and
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<PAGE>
to vote all Common Stock held by him in favor of all nominees to the Company's
board of directors who are nominated by the Company, so long as the Company does
not breach the Agreement.
The Company has issued to the Placement Agent 17,778 shares of
Common Stock together with warrants exercisable to purchase 9,000 shares of
Common Stock at $2.43 per share.
PREFERRED STOCK
Pursuant to the Agreement, the Company will issue the Preferred
Stock in two tranches, each in the amount of $600,000 in stated value of
Preferred Stock. The first such tranche will be funded 30 days from the
Effective Date and the second tranche will be funded 90 days from the Effective
Date. The Preferred Stock, including accrued dividends, would be convertible
into shares of the Company's Common Stock at a price equal to the lesser of (x)
average closing bid prices of the Company's Common Stock for the five-day
trading period ("Average Price") ending on the day prior to the date of
conversion multiplied by 85% or (y) the Average Price ending on the day prior to
the closing of the first tranche of Preferred Stock ("Conversion Price"). The
Company has the option of terminating the Preferred Stock portion of the Funding
at any time but no later than the twentieth day after the Effective Date.
It is expected that: (i) each share of Preferred Stock will earn a
cumulative dividend of 6% per annum, which the Company may elect to pay in cash,
or in shares of Common Stock; (ii) the Company may redeem the Preferred Stock at
the average price of the last five trading days prior to the date of redemption
calculated as though the Preferred Stock were converted into Common Stock on
that date on which a redemption notice was given; (iii) the Preferred Stock,
including all accrued dividends, will automatically convert into Common Stock on
the second anniversary after issuance; and (iv) the Preferred Stock will have no
voting rights, except as provided otherwise by law.
Upon the funding of each tranche of Preferred Stock, the investors
will also receive warrants to purchase 6,000 shares of Common Stock, for each
$300,000 in stated value of Preferred Stock purchased, with an exercise price
equal to 120% of the Average Price preceding the closing of the first tranche of
the Preferred Stock. The Placement Agent may receive up to 4% of the gross
proceeds of the Preferred Stock portion of the Funding in stated value of
Preferred Stock.
EQUITY LINE OF CREDIT
The Equity Line of Credit provides for a maximum funding of
$5,000,000, may be called upon at the election of the Company and is subject to
various conditions. The Equity Line of Credit contemplates the issuance of (i)
Common Stock required to be purchased from time to time by the investors over a
two year period (a "Put") upon notice (a "Put Notice") from the Company, at a
price equal to 85% of the Market Price (defined as the average of the three
lowest closing bid prices of the Company's Common Stock over the five-day
trading period beginning three trading days prior to a Put and ending on the
trading day following a Put) of the Common Stock as of the date of the Put
Notice, up to an aggregate of $5,000,000 in purchase price and (ii) warrants to
purchase 30,000 shares of Common Stock with an exercise price equal to $3.20 per
share exercisable for a period of five years commencing November 1998. The
obligation of the investors to purchase Common Stock under a Put is subject to
conditions relating to market price, trading volume and timing. For the
commitment represented by the Equity Line of Credit, the Company has issued to
the Placement Agent 20,000 shares of Common Stock.
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<PAGE>
REASON FOR STOCKHOLDER APPROVAL
Under the rules of the National Association of Securities Dealers,
issuers whose securities are listed on the Nasdaq SmallCap Market, the exchange
on which the Company's Common Stock is listed, are required to obtain
stockholder approval, prior to the issuance of securities, in the following
limited circumstances, in connection with a transaction other than a public
offering involving: (i) the sale or issuance by the issuer of common stock (or
securities convertible into or exercisable for common stock) at a price less
than the greater of book or market value which together with sales by officers,
directors or substantial stockholders of the company equals 20 percent or more
of common stock or 20 percent or more of the voting power outstanding before the
issuance; or (ii) the sale or issuance by the Company of common stock (or
securities convertible into or exercisable to purchase common stock) equal to 20
percent or more of the common stock or 20 percent or more of the voting power
outstanding before the issuance for less than the greater of book or market
value of the stock.
Based on the closing bid price of the Common Stock on May 12, 1998,
of $2.5625, if all conditions were met and the Company would exercise its right
to call upon the entire Funding, the Common Stock issuable would be
approximately 46% of the shares outstanding (assuming, and after taking into
account, the full conversion of the Preferred Stock, the Company's full exercise
of the Puts, and the exercise of all warrants issued pursuant to the Funding,
but not including any Repricing Shares). In addition, if the closing bid price
of the Common Stock were to decrease significantly, the exercise of the Reset
Rights, the conversion of the Preferred Stock or the Company's full exercise of
the Put pursuant to the Equity Line of Credit, or a combination of the
foregoing, could conceivably effect a change in control of the Company.
Therefore, the Board of Directors seeks stockholder approval of the
proposed issuances of the Securities which, if issued to full extent, could
potentially involve the Company issuing 20% or more of the shares of Common
Stock outstanding. Stockholders are being asked to approve only the proposed
issuances and are not being asked to approve any other aspect of the proposed
Funding.
VOTE REQUIRED
A vote of the holders of a majority of the voting power of the issued
and outstanding Common Stock of the Company, present in person or represented by
proxy at the Annual Meeting and entitled to vote at the Annual Meeting, is
required to approve the issuance of the Securities pursuant to the Funding.
The Company's Board of Directors recommends a vote FOR this proposal.
PROPOSAL 4 - RATIFICATION AND APPROVAL OF APPOINTMENT OF INDEPENDENT
AUDITORS
The Board of Directors has appointed Richard A. Eisner & Company,
LLP, as the independent auditors of the Company for the fiscal year ending
December 31, 1998, subject to ratification by the Stockholders. The firm of
Richard A. Eisner & Company, LLP, has audited the books of the Company since
1991. A representative of Richard A. Eisner & Company, LLP, is expected to be
present at the Annual Meeting to respond to questions from Stockholders and to
make a statement if such representative desires to do so.
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<PAGE>
VOTE REQUIRED
A vote of the holders of a majority of the voting power of the issued
and outstanding Common Stock of the Company, present in person or represented by
proxy at the Annual Meeting and entitled to vote at the Annual Meeting is
required to ratify the appointment of Richard A. Eisner & Company, LLP as the
independent auditors of the Company.
The Company's Board of Directors recommends a vote FOR this proposal.
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<PAGE>
MISCELLANEOUS
OTHER MATTERS
The Board of Directors does not intend to bring before the Annual
Meeting any matters other than those specifically described above and knows of
no matters other than the foregoing to come before the Annual Meeting. If,
however, any other matters should properly come before the Annual Meeting, the
persons named in the accompanying proxy will vote proxies as in their discretion
they may deem appropriate, unless they are directed by a proxy to do otherwise.
INFORMATION CONCERNING STOCKHOLDER PROPOSALS
From time to time, Stockholders may present proposals for
consideration at a Stockholders meeting which may be proper subjects for
inclusion in the proxy statement related to that meeting. Stockholder proposals
intended for inclusion in the proxy statement for the Company's 1999 Annual
Meeting of Stockholders must be received by the Company's Secretary at its
principal offices, Continental Plaza III, 433 Hackensack Avenue, Hackensack, New
Jersey 07601 by January 14, 1999.
FORM 10-KSB EXHIBITS
The Company will furnish, upon payment of a reasonable fee to cover
reproduction and mailing expenses, a copy of any exhibit to the Company's Annual
Report on Form 10-KSB requested by any person solicited hereunder.
By Order of the Board of Directors
David E. Y. Sarna
Chairman and Secretary
Hackensack, New Jersey
________ __, 1998
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<PAGE>
OBJECTSOFT CORPORATION
Continental Plaza III
433 Hackensack Avenue
Hackensack, New Jersey 07601
THIS PROXY IS SOLICITED BY THE
COMPANY'S BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, ______, 1998
The undersigned holder of Common Stock of ObjectSoft Corporation, a
Delaware corporation (the "Company"), hereby appoints David E.Y .Sarna and
George J. Febish and each of them, as proxies for the undersigned, each with
full power of substitution, for and in the name of the undersigned to act for
the undersigned and to vote, as designated below, all of the shares of stock of
the Company that the undersigned is entitled to vote at the 1998 Annual Meeting
of Stockholders of the Company, to be held on Thursday, ______ __, 1998, at
10:00 a.m., local time, at the offices of the Company at Continental Plaza III,
433 Hackensack Avenue, Hackensack, New Jersey 07601 and at any adjournments or
postponements thereof.
1. Election of George J. Febish and Daniel E. Ryan, as Class II directors.
[_] VOTE FOR all nominees listed above, except vote withheld from the
following nominees (if any).
INSTRUCTIONS: to withhold authority to vote for an individual
nominee, print that nominee's name on the line provided below.
-----------------------------
[_] VOTE WITHHELD from all nominees.
The Board of Directors unanimously recommends a vote FOR the election of
all the nominees for election as directors listed above.
2. Amendment to the Company's 1996 Stock Option Plan (the "1996 Plan") to
increase the number of shares of Common Stock which may be issued
thereunder from 250,000 to 750,000 and eliminate the Non-Employee Director
formula grants and certain provisions relating thereto currently set forth
in the 1996 Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
The Board of Directors unanimously recommends a vote FOR the amendments to
the Company's 1996 Stock Option Plan.
3. Approval of the issuance of the Company's securities pursuant to a Private
Equity Line of Credit Agreement.
[_] FOR [_] AGAINST [_] ABSTAIN
<PAGE>
The Board of Directors unanimously recommends a vote FOR the approval of
the issuance of the Common Stock.
4. Ratification of the appointment of Richard A. Eisner & Company, LLP as the
independent auditors of the Company.
[_] FOR [_] AGAINST [_] ABSTAIN
The Board of Directors unanimously recommends a vote FOR the appointment
of auditors.
5. Upon such other matters as may properly come before the Annual Meeting and
any adjournments or postponements thereof. In their discretion, the
proxies are authorized to vote upon such other business as may properly
come before the Annual Meeting and any adjournments or postponements
thereof.
The Board of Directors unanimously recommends a vote FOR this proposal.
(see reverse side)
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<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" THE ELECTION OF ALL CLASS II DIRECTOR NOMINEES LISTED ABOVE AND
IN FAVOR OF THE ITEMS LISTED UNDER (2), (3) AND (4).
The undersigned hereby acknowledges receipt of (i) the Notice of Annual
Meeting, (ii) the Proxy Statement and (iii) the Company's 1997 Annual Report.
Dated __________________________, 1998
______________________________________
Print Full Name
______________________________________
(Signature)
______________________________________
Print Full Name
______________________________________
(Signature if held jointly)
IMPORTANT: Please sign exactly as your
name appears hereon and mail it
promptly even though you now plan to
attend the meeting. When shares are
held by joint tenants, both should
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such. If a corporation, please sign in
full corporate name by president or
other authorized officer. If a
partnership, please sign in
partnership name by authorized person.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD
AND PROMPTLY RETURN IT IN THE ENVELOPE PROVIDED.
NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
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