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
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant
to Rule 14a-11(c) or Rule 14a-12
ObjectSoft Corporation
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(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)(4) and 0-11.
1.Title of each class of securities to which
transaction applies:
2.Aggregate number of securities to which transaction
applies:
<PAGE>
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 LETTERHEAD]
September 14, 1999
Dear Stockholder:
You are cordially invited to attend a Special Meeting of
Stockholders to be held at the offices of ObjectSoft Corporation, Continental
Plaza III, 433 Hackensack Avenue, Hackensack, New Jersey on Tuesday, October 12,
1999 at 10:00 A.M., local time. The matters to be acted upon at that meeting are
set forth and described in the Notice of Special Meeting and Proxy Statement
which accompany this letter.
We request that you read these documents carefully.
We hope that you plan to attend the meeting. However, if you
are not able to join us, we urge you to exercise your right as a stockholder and
vote. Please promptly sign, date and return the enclosed proxy card in the
accompanying postage prepaid envelope. You may, of course, attend the Special
Meeting of Stockholders and vote in person even if you have previously mailed
your proxy card.
Sincerely,
/s/ David E.Y. Sarna
DAVID E. Y. SARNA
Chairman and Secretary
IT IS IMPORTANT THAT YOU VOTE, SIGN AND RETURN THE ACCOMPANYING PROXY CARD AS
SOON AS POSSIBLE.
<PAGE>
OBJECTSOFT CORPORATION
CONTINENTAL PLAZA III
433 HACKENSACK AVENUE
HACKENSACK, NEW JERSEY 07601
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 12, 1999
To the Stockholders of ObjectSoft Corporation:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders
(the "Meeting") of ObjectSoft Corporation, a Delaware corporation (the
"Company"), will be held at the offices of the Company, Continental Plaza III,
433 Hackensack Avenue, Hackensack, New Jersey 07601 on Tuesday, October 12, 1999
at 10:00 A.M., local time, for the following purposes:
1. To approve an amendment to the Company's Certificate of
Incorporation in order to effect a stock combination (reverse split) of the
Company's Common Stock in an exchange ratio to be approved by the Board of
Directors, ranging from one newly issued share for each two outstanding shares
of Common Stock to one newly issued share for each six outstanding shares of
Common Stock;
2. To approve the issuance of the Company's securities
pursuant to a Subscription Agreement dated as of August 13, 1999, as amended,
among the Company, Warwick Corporation, Ltd.
and the investors referred to therein;
3. The transaction of such other business as may properly come
before the Meeting or any adjournments or postponements thereof.
Only holders of record of Common Stock of the Company at the
close of business on September 3, 1999 will be entitled to notice of, and to
vote at, the Meeting and any adjournments 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, located at Continental Plaza III, 433 Hackensack
Avenue, Hackensack, New Jersey 07601.
By Order of the Board of Directors,
/s/ David E.Y. Sarna
DAVID E. Y. SARNA
Secretary
Hackensack, New Jersey
September 14, 1999
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IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. EACH STOCKHOLDER
IS URGED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WHICH IS BEING
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. AN ENVELOPE ADDRESSED TO THE
COMPANY'S TRANSFER AGENT IS ENCLOSED FOR THAT PURPOSE AND NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES.
<PAGE>
OBJECTSOFT CORPORATION
CONTINENTAL PLAZA III
433 HACKENSACK AVENUE
HACKENSACK, NEW JERSEY 07601
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PROXY STATEMENT
--------------------
This Proxy Statement is furnished to the holders of Common
Stock, par value $.0001 per share ("Common Stock"), of ObjectSoft Corporation
(the "Company") in connection with the solicitation and on behalf of its Board
of Directors of proxies ("Proxy" or "Proxies") for use at a Special Meeting of
Stockholders (the "Meeting") to be held on Tuesday, October 12, 1999 at 10:00
A.M., local time, at the offices of the Company, Continental Plaza III, 433
Hackensack Avenue, Hackensack, New Jersey, and at any adjournment or
postponement thereof, for the purposes set forth in the accompanying Notice of
Special Meeting of Stockholders.
The principal executive offices of the Company are located at
Continental Plaza III, 433 Hackensack Avenue, Hackensack, New Jersey 07601, and
its telephone number is (201) 343-9100. This Proxy Statement and accompanying
form of proxy are being mailed on or about September 16, 1999 to all
stockholders of record on September 3, 1999 (the "Record Date").
Any stockholder giving a proxy has the power to revoke the same at any
time before it is voted by delivering a written notice to the Secretary of the
Company at its offices, by executing a later-dated proxy or by attending the
Meeting and voting in person. The cost of soliciting proxies will be borne by
the Company. The Company has no contract or arrangement with any party in
connection with the solicitation of proxies. Following the mailing of the proxy
materials, solicitation of proxies may be made by officers and employees of the
Company by mail, telephone, telegram or personal interview. Properly executed
proxies will be voted in accordance with instructions given by stockholders at
the places provided for such purpose in the accompanying proxy. Unless contrary
instructions are given by stockholders, the shares represented by such proxies
are intended to be voted FOR approval of an amendment to the Company's
Certificate of Incorporation as described below in Proposal 1, and FOR approval
of the issuance of the Company's securities pursuant to a Subscription Agreement
dated as of August 13, 1999, as amended, among the Company, Warwick Corporation,
Ltd. and the investors referred to therein, as described below in Proposal 2.
The Board of Directors does not know of any other matters that may be brought
before the Meeting. In the event that any other matter should come before the
Meeting, the persons named in the enclosed proxy will have discretionary
authority to vote all proxies not marked to the contrary with respect to such
matters in accordance with their best judgment.
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VOTING SECURITIES
Stockholders of record as of the close of business on the Record Date
will be entitled to notice of, and to vote at, the Meeting or any adjournments
thereof. On the Record Date, there were 9,260,639 outstanding shares of Common
Stock. Each holder of Common Stock is entitled to one vote for each share held
by such holder. 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
Meeting is necessary to constitute a quorum. If less than a majority of
outstanding shares entitled to vote are represented at the Meeting, a majority
of the shares so represented may adjourn the Meeting to another date, time or
place, and notice need not be given of the new date, time and place if the new
date, time or place is announced at the Meeting before an adjournment is taken.
Proxies submitted which contain abstentions or broker non-votes will be
deemed present at the Meeting for purposes of determining the presence of a
quorum. Shares of Common Stock that are voted to abstain with respect to any
matter will be considered cast with respect to that matter and will have the
same effect as negative votes. Shares subject to broker non-votes with respect
to any matter will not be considered cast with respect to that matter.
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<PAGE>
SECURITY HOLDINGS OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to the ownership
of shares of the Company's Common Stock as of September 1, 1999 with respect to
(i) holders known to the Company to beneficially own more than five percent of
the outstanding shares of Common Stock, (ii) each director of the Company, (iii)
the Company's Co-Chief Executive Officers and each other executive officer whose
annual cash compensation for 1998 exceeded $100,000 and (iv) all directors and
executive officers of the Company as a group.
Amount and Nature
Name and Address of of Beneficial
Beneficial Owners (1) Ownership (2) Percentage (3)
- --------------------- -------------- --------------
David E. Y. Sarna (4) (5) 694,000 7.39%
George J. Febish (4) (6) 932,500 9.94%
Daniel E. Ryan (7) 25,000 *
Michael A. Burak (8) 11,000 *
All Executive Officers and Directors 1,662,500 17.42%
as a Group (4 persons) (9)
- --------------
* Less than 1%.
(1) Unless otherwise indicated, the business address of each of the
executive 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 75,000 shares of Common Stock granted
under the Company's 1996 Stock Option Plan (the "1996 Plan").
(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 Dr.
Sarna are the sole beneficiaries. Mr. Sarna disclaims beneficial
ownership of the shares held by the Sarna Trust. Mr. Weinberg and Dr.
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 Dr.
Sarna has the sole voting power with respect to such shares. Mr.
Weinberg 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. 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
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<PAGE>
to such shares. Mr. Weinberg disclaims beneficial ownership of the
shares of Common Stock held by the Febish Trust.
(7) Includes immediately exercisable options to purchase 25,000 shares of
Common Stock granted under the Company's 1996 Plan.
(8) Includes immediately exercisable options to purchase 10,000 shares of
Common Stock granted under the Company's 1996 Plan and 1,000 shares of
Common Stock purchased on the open market in the name of Lois Burak,
Mr. Burak's wife. Mr. Burak disclaims beneficial ownership of the
shares of Common Stock held by his wife.
(9) Includes 185,000 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
TO APPROVE AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION IN ORDER TO EFFECT A REVERSE SPLIT OF THE COMPANY'S
COMMON STOCK
GENERAL
The Company's Board of Directors (the "Board") has unanimously
adopted resolutions proposing, declaring advisable and recommending that
stockholders authorize an Amendment to the Company's Certificate of
Incorporation (the "Amendment") to (i) effect a stock combination (reverse
split) of the Company's Common Stock in an exchange ratio to be approved by the
Board of Directors, ranging from one newly issued share for each two outstanding
shares of Common Stock to one newly issued share for each six outstanding shares
of Common Stock (the "Reverse Split") and (ii) provide that no fractional shares
or scrip representing fractions of a share shall be issued, but in lieu thereof,
each fraction of a share that any stockholder would otherwise be entitled to
receive shall be rounded up to the nearest whole share. There will be no change
in the number of the Company's authorized shares of Common Stock and no change
in its par value.
If the Reverse Split is approved, the Board will have
authority, without further stockholder approval, to effect the Reverse Split
pursuant to which the Company's outstanding shares (the "Old Shares") of Common
Stock would be exchanged for new shares (the "New Shares") of Common Stock, in
an exchange ratio to be approved by the Board, ranging from one New Share for
each two Old Shares to one New Share for each six Old Shares. The number of Old
Shares for which each New Share is to be exchanged is referred to as the
"Exchange Number." The Exchange Number may, within such range, be a whole number
or a whole number and fraction of a whole number.
In addition, the Board will have the authority to determine
the exact timing of the effective date and time of the Reverse Split, which may
be any time prior to June 30, 2000, without further stockholder approval. Such
timing and Exchange Number will be determined in the judgment of the Board, with
the intention of maximizing the Company's ability to remain in compliance with
the continued listing maintenance requirements of The Nasdaq Stock Market, Inc.
("Nasdaq"), to raise financing and for other intended benefits of the Reverse
Split. See "-- Purposes of the Reverse Split," below. The text of the proposed
Amendment (subject to inserting the effective time of the Reverse Split and the
Exchange Number) is set forth in Exhibit A to this Proxy Statement. The
Amendment also makes some clarifying and conforming changes to preferred stock
provisions to the effect that the maximum conversion prices of such preferred
stock will be increased proportionately in the event of the Reverse Split.
The Board also reserves the right, notwithstanding stockholder
approval and without further action by stockholders, to not proceed with the
Reverse Split if, at any time prior to filing the Amendment with the Secretary
of State of the State of Delaware, the Board, in its sole discretion, determines
that the Reverse Split is no longer in the best interests of the Company and its
stockholders. The Board may consider a variety of factors in determining whether
or not to implement the Reverse Split and in determining the Exchange Number
including, but not limited to, overall trends in the stock market, recent
changes and anticipated trends in the market price per share of the Common
Stock, business and transactional developments and the Company's actual and
projected financial performance.
PURPOSES OF THE REVERSE SPLIT
The Common Stock is quoted on The Nasdaq SmallCap Market.
In order for the Common Stock to continue to be quoted on The Nasdaq SmallCap
Market, the Company and its Common Stock are
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<PAGE>
required to continue to comply with various listing maintenance standards
established by Nasdaq. Among other things, as such requirements pertain to the
Company, the Company is required to maintain net tangible assets of at least
$2,000,000 (at June 30, 1999 the Company's net tangible assets, as defined by
Nasdaq, were approximately $2,521,000 and, on a pro forma basis giving effect to
the financing referred to in Proposal 2, which closed in August 1999, were
approximately $4,715,900) and its Common Stock must (a) have an aggregate market
value of shares held by persons other than officers and directors ("public
float") of at least $1,000,000, (b) be held by at least 300 persons who own at
least 100 shares and (c) have a minimum bid price of at least $1.00 per share.
Under Nasdaq's listing maintenance standards, if the closing
bid price of the Common Stock is under $1.00 per share for thirty consecutive
business days and does not thereafter regain compliance for a minimum of ten
consecutive business days during the ninety calendar days following notification
by Nasdaq, Nasdaq may delist the Common Stock from trading on The Nasdaq
SmallCap Market. The bid price of the Company's Common Stock has closed below
$1.00 per share since August 3, 1999. On September 1, 1999, the Company received
a letter from Nasdaq that it would continue to list the Company's stock on The
Nasdaq SmallCap Market pursuant to a temporary exception, which requires that
the Company meet certain conditions relating to maintenance of the closing bid
price of at least $1.00 per share. The Company must begin to meet the terms of
the exception by October 15, 1999. If the Company is unable to demonstrate
compliance with the exception, the Common Stock will be delisted. The Company
understands that it is Nasdaq's position that an ability to demonstrate
sustained compliance with all requirements for continued listing also is
required to achieve compliance with such exception. The principal purpose of the
Reverse Split is to increase the market price of the Common Stock above the
Nasdaq minimum bid requirement (which does not adjust for the Reverse Split). If
a delisting were to occur, the Common Stock would trade on the OTC Bulletin
Board or in the "pink sheets" maintained by the National Quotation Bureau, Inc.
Such alternatives are generally considered to be less efficient markets.
The purpose of the Reverse Split also would be to increase the
market price of the Common Stock in order to make the Common Stock more
attractive to raise financing (and, therefore, both raise cash to support the
Company's operations and increase the Company's net tangible assets to
facilitate compliance with Nasdaq requirements), and as a possible currency for
acquisitions and other transactions. The Company's Common Stock has traded on
The Nasdaq SmallCap Market at market prices ranging from approximately $1.00 to
approximately $.50 since from August 2, 1999 through September 8, 1999. This has
reduced the attractiveness of using the Common Stock in order to raise financing
to support the Company's operations and to increase the Company's net worth and
as consideration for potential acquisitions (which, when coupled with the
Company's need to deploy its available cash for operations, has rendered
acquisitions difficult to negotiate). Furthermore, the Company believes that
maintaining the Company's listing on The Nasdaq SmallCap Market may provide the
Company with a broader market for its Common Stock and, therefore, facilitate
the use of the Common Stock in acquisitions and financing transactions in which
the Company may engage.
There can be no assurance, however, that, even after
consummating the Reverse Split, the Company will meet the minimum bid price and
otherwise meet the requirements of Nasdaq for continued inclusion for trading on
The Nasdaq SmallCap Market, or that it will be able to utilize its Common Stock
in order to effectuate financing or acquisition transactions.
Giving the Board authority to implement the Reverse Split will
avoid the need to call a special meeting of stockholders under time constraints
to authorize a reverse split should it become necessary in order to seek to
effectuate a financing or acquisition transaction or to meet Nasdaq's listing
maintenance criteria.
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<PAGE>
The Reverse Split will not change the proportionate equity
interests of the Company's stockholders, nor will the respective voting rights
and other rights of stockholders be altered, except for possible immaterial
changes due to rounding up to eliminate fractional shares. The Common Stock
issued pursuant to the Reverse Split will remain fully paid and nonassessable.
The Company will continue to be subject to the periodic reporting requirements
of the Securities Exchange Act of 1934, as amended.
CERTAIN EFFECTS OF THE REVERSE SPLIT
The following table illustrates the principal effects of the
Reverse Split on the Common Stock:
<TABLE>
<CAPTION>
Prior to After 1-for-2 After 1-for-4 After 1-for-6
Reverse Reverse Reverse Reverse
Stock Stock Stock Stock
Number of Shares Split Split Split Split
- ---------------- -------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Common Stock:
Authorized.................................. 50,000,000 50,000,000 50,000,000 50,000,000
Outstanding (1)............................ 9,260,639 4,630,320 2,315,160 1,543,440
----------- ----------- ----------- -----------
Available for Future
Issuance.............................. 40,739,361 45,369,681 47,684,840 48,456,560
Financial Data (2)
- ------------------
Stockholders' Equity:
Preferred Stock............................ 3,180,000 3,180,000 3,180,000 3,180,000
Common Stock............................... 900 450 225 150
Additional Paid-in Capital................. 10,271,700 10,272,150 10,272,375 10,272,450
Deficit Accumulated During Development Stage.. (8,736,700) (8,736,700) (8,736,700) (8,736,700)
----------- ----------- ----------- -----------
Total Stockholders' Equity................. $ 4,715,900 $ 4,715,900 $ 4,715,900 $ 4,715,900
=========== =========== =========== ===========
Net Loss per Common share:
Six months ended June 30,
1999.................................. $ (0.31) $ (0.62) $ (1.24) $ (1.86)
=========== =========== =========== ===========
Book Value Per Common $ 0.51 $ 1.02 $ 2.04 $ 3.06
=========== =========== ============ ===========
Share at June 30, 1999...................
</TABLE>
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(1) Gives effect to the Reverse Split, excluding New Shares to be issued in
lieu of fractional shares, and to conversions of convertible preferred
stock through August 12, 1999. Excludes, on a pre-Reverse Split basis: an
indeterminate number of shares of Common Stock subject to potential
issuance upon conversion of the outstanding shares of preferred stock;
approximately 5,000,000 shares of Common Stock which were subject to
outstanding options and warrants; and 605,833 additional shares of Common
Stock which were available for the grant of future options under the 1996
Plan. The number of shares of Common Stock issuable upon conversion of each
outstanding series of preferred stock is dependent upon the market price of
Common Stock. Accordingly, the actual number of shares of Common Stock
issued upon conversion of such preferred stock cannot be determined at this
time. Upon effectiveness of the Reverse Split, each option and warrant
would entitle the holder to acquire a number of shares equal to the number
of shares which the holder was entitled to acquire prior to the Reverse
Split divided by the Exchange Number at the exercise price in effect
immediately prior to the Reverse Split multiplied by the Exchange Number.
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<PAGE>
(2) Rounded to the nearest $100. Balance sheet data gives effect to the Reverse
Split and to the August 1999 convertible preferred stock financing as if
such transactions occurred on June 30, 1999, subject to adjustment
resulting from the issuance of New Shares in lieu of fractional shares.
Stockholders should recognize that, if the Reverse Split is
effectuated, they will own a fewer number of shares than they presently own (a
number equal to the number of shares owned immediately prior to the filing of
the Amendment divided by the Exchange Number, as adjusted to include New Shares
to be issued in lieu of fractional shares). While the Company expects that the
Reverse Split will result in an increase in the market price of the Common
Stock, there can be no assurance that the Reverse Split will increase the market
price of the Common Stock by a multiple equal to the Exchange Number or result
in a permanent increase in the market price (which is dependent upon many
factors, including the Company's performance and prospects). Also, should the
market price of the Company's Common Stock decline after the Reverse Split, the
percentage decline may be greater than would pertain in the absence of the
Reverse Split. Furthermore, the possibility exists that liquidity in the market
price of the Common Stock could be adversely affected by the reduced number of
shares that would be outstanding after the Reverse Split. In addition, the
Reverse Split will increase the number of stockholders of the Company who own
odd-lots (less than 100 shares). Stockholders who hold odd-lots typically will
experience an increase in the cost of selling their shares, as well as greater
difficulty in effecting such sales. In addition, an increase in the number of
odd-lot holders will reduce the number of holders of round lots (100 or more
shares), which could adversely affect the Nasdaq listing requirement that the
Company have at least 300 round lot holders. Consequently, there can be no
assurance that the Reverse Split will achieve the desired results that have been
outlined above.
Stockholders should also recognize that, as indicated in the
foregoing table, there will be an increase in the number of shares which the
Company will be able to issue from authorized but unissued shares of Common
Stock. As a result of any issuance of shares, the equity and voting rights of
holders of outstanding shares may be diluted.
PROCEDURE FOR EFFECTING REVERSE SPLIT AND EXCHANGE OF STOCK CERTIFICATES
If the Amendment is approved by the Company's stockholders,
and if the Board still believes that the Reverse Split is in the best interests
of the Company and its stockholders, the Company will file the Amendment with
the Secretary of State of the State of Delaware at such time as the Board has
determined the appropriate Exchange Number and the appropriate effective time
for such split. The Board may delay effecting the Reverse Split until as late as
June 30, 2000 without resoliciting stockholder approval. The Reverse Split will
become effective on the date of filing the Amendment at the time specified in
the Amendment (the "Effective Time"). Beginning at the Effective Time, each
certificate representing Old Shares will be deemed for all corporate purposes to
evidence ownership of New Shares.
As soon as practicable after the Effective Time, stockholders
will be notified that the Reverse Split has been effected and of the exact
Exchange Number. The Company expects that its transfer agent will act as
exchange agent (the "Exchange Agent") for purposes of implementing the exchange
of stock certificates. Holders of Old Shares will be asked to surrender to the
Exchange Agent certificates representing Old Shares in exchange for certificates
representing New Shares in accordance with the procedures to be set forth in a
letter of transmittal to be sent by the Exchange Agent. No new certificates will
be issued to a stockholder until such stockholder has surrendered such
stockholder's outstanding certificate(s) together with the properly completed
and executed letter of transmittal to the Exchange Agent. Any Old Shares
submitted for transfer, whether pursuant to a sale or other disposition, or
otherwise, will
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automatically be exchanged for New Shares at the exchange ratio. STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE AND SHOULD NOT SUBMIT ANY CERTIFICATES
UNTIL REQUESTED TO DO SO.
FRACTIONAL SHARES
No scrip or fractional certificates will be issued in
connection with the Reverse Split. Any fraction of a share that any stockholders
of record otherwise would be entitled to receive shall be rounded up to the
nearest whole share.
NO DISSENTER'S RIGHTS
Under Delaware law, stockholders are not entitled to
dissenter's rights with respect to the proposed Amendment.
FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE SPLIT
The following is a summary of certain material U.S. federal
income tax consequences of the Reverse Split and does not purport to be
complete. It does not discuss any state, local, foreign or minimum income or
other U.S. federal tax consequences. Also, it does not address the tax
consequences to holders that are subject to special tax rules, such as banks,
insurance companies, regulated investment companies, personal holding companies,
foreign entities, nonresident alien individuals, broker-dealers and tax-exempt
entities. The discussion is based on the provisions of the U.S. federal income
tax law as of the date hereof, which is subject to change retroactively as well
as prospectively. This summary also assumes that the Old Shares were, and the
New Shares will be, held as a "capital asset," as defined in the Internal
Revenue Code of 1986, as amended (generally, property held for investment). The
tax treatment of a stockholder may vary depending upon the particular facts and
circumstances of such stockholder. EACH STOCKHOLDER SHOULD CONSULT WITH SUCH
STOCKHOLDER'S OWN TAX ADVISOR WITH RESPECT TO THE CONSEQUENCES OF THE REVERSE
SPLIT.
The Reverse Split is an isolated transaction and is not part
of a plan to periodically increase any stockholder's proportionate interest in
the assets or earnings and profits of the Company. As a result, no gain or loss
should be recognized by a stockholder of the Company upon such stockholder's
exchange of Old Shares for New Shares pursuant to the Reverse Split. The
aggregate tax basis of the New Shares received in the Reverse Split will be the
same as the stockholder's aggregate tax basis in the Old Shares exchanged
therefor. The stockholder's holding period for the New Shares will include the
period during which the stockholder held the Old Shares surrendered in the
Reverse Split.
REQUIRED VOTE
In accordance with the Delaware General Corporation Law and
the Company's Certificate of Incorporation, the affirmative vote of a majority
of the outstanding shares of Common Stock entitled to vote thereon is required
to adopt this proposed Amendment. As a result, any shares not voted (whether by
abstention, broker non-vote or otherwise) will have the same effect as a vote
against the proposal.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY RECOMMENDED A VOTE FOR
PROPOSAL 1.
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PROPOSAL 2
TO APPROVE THE ISSUANCE OF THE COMPANY'S SECURITIES PURSUANT TO A
SUBSCRIPTION AGREEMENT DATED AS OF AUGUST 13, 1999, AS AMENDED
As of August 13, 1999, the Company closed a private financing
under a 6% Series F Convertible Preferred Stock Subscription Agreement dated as
of August 13, 1999, as amended (the "Series F Agreement"), with Warwick
Corporation, Ltd. ("Warwick") and certain investors, contemplating a funding of
$2,350,000 of 6% Series F Convertible Preferred Stock (the "Series F Shares")
and warrants (the "Warrants") to purchase 235,000 shares of Common Stock or
other securities issued or issuable pursuant to the exercise of the Warrants.
The Company has agreed to file a registration statement under the Securities Act
of 1933, as amended, registering for resale the shares of Common Stock issuable
in connection with the Agreement. As a result of the financing, Warwick received
for its services as a finder a fee equal to six percent of the aggregate
purchase price paid by the investors.
Each Series F Share may be converted into shares of Common
Stock at a conversion rate determined by dividing $100, the purchase price per
Series F Share, by the Conversion Price, which is the lesser of (a) 0.80 times
the average Closing Bid Price, as defined in the Certificate of Designation of
Series F Convertible Preferred Stock, of the Common Stock for the five trading
days ending on the day prior to conversion, or (b) $1.21 (subject to appropriate
upward adjustment if the Reverse Split is implemented). The Series F Shares may
not be converted until the earlier of (i) the ninetieth day after the closing
date of the financing and (ii) the effective date of the registration statement,
and thereafter only one-third of a holder's acquired Series F Shares may be
converted, on a cumulative basis, during each 30-day period. The Series F Shares
will automatically convert into Common Stock on the second anniversary of the
closing date.
The number of shares of Common Stock issuable to each holder
of Series F Shares at any time upon conversion will not exceed the number of
shares which, when aggregated with all other shares of Common Stock then owned
of record by such holder, would result in such holder owning, in the aggregate,
more than 4.99% of all of the Company's outstanding Common Stock on the date of
conversion.
The Warrants are exercisable for five years at a per share
exercise price of $1.07. One-half of each investor's Warrants are callable at a
nominal price if the Common Stock trades at a price equal to or in excess of
150% of the exercise price for 20 consecutive days.
The investors have agreed to vote all shares of Common Stock
which may be beneficially held by them in favor of all nominees to the Company's
Board of Directors who are nominated by the then current Board of Directors.
The Company will not be able, under the Series F Agreement, to
issue an amount of shares of Common Stock exceeding 19.99% or more of the Common
Stock of the Company outstanding at the time of the original closing unless this
proposal is approved by the Company's stockholders or unless a waiver is
obtained from Nasdaq. See below "-- Reason for Stockholder Approval". In the
event that neither approval from stockholders nor a waiver from Nasdaq is
obtained, the Company is only obligated under the Series F Agreement to convert
the Series F Shares into Common Stock in the applicable pro rata amounts so that
no more than 19.99% of the Company's Common Stock outstanding at the time of the
original closing will be issued under the Series F Agreement.
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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% or more of
common stock or 20% 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% or more
of the common stock or 20% or more of the voting power outstanding before the
issuance for less than the greater of book or market value of the stock.
Assuming the conversion date of September 2, 1999 and based on
the applicable Closing Bid Price of the Common Stock, if all outstanding Series
F Shares were converted into Common Stock, the Common Stock issuable under the
Series F Agreement would be approximately 26% of the shares outstanding.
Moreover, if, at the time of permitted conversion, the Closing Bid Price of the
Common Stock were to be significantly lower, the Common Stock issuable upon
conversion of the Series F Shares pursuant to the Series F Agreement could
conceivably effect a change in control of the Company.
Therefore, the Board of Directors seeks stockholder approval
of the proposed issuances of securities pursuant to the Series F Agreement
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 funding.
VOTE REQUIRED
The affirmative vote of the majority of shares of Common Stock
of the Company present in person or represented by proxy at the Meeting and
entitled to vote on such matter is required to approve the issuance of the
securities pursuant to the Series F Agreement. In addition, the affirmative vote
of a majority of the outstanding shares of each outstanding series of preferred
stock may be required.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY RECOMMENDED A VOTE FOR
PROPOSAL 2.
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<PAGE>
MISCELLANEOUS
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 2000 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 February 10, 2000. As to any proposals intended to be presented
by a stockholder without inclusion in the Company's proxy statement and form of
proxy for the Company's 2000 Annual Meeting of Stockholders, the proxies named
in the Company's form of proxy for that meeting will be entitled to exercise
discretionary authority on that proposal unless the Company receives notice of
the matter on or before April 19, 2000. However, even if such notice is timely
received, such proxies may nevertheless be entitled to exercise discretionary
authority on that matter to the extent permitted by Securities and Exchange
Commission regulations.
OTHER MATTERS
Management does not intend to bring before the Meeting for
action any matters other than those specifically referred to above and is not
aware of any other matters which are proposed to be presented by others. If any
other matters or motions should properly come before the Meeting, the persons
named in the Proxy intend to vote thereon in accordance with their judgment on
such matters or motions, including any matters or motions dealing with the
conduct of the Meeting.
PROXIES
All stockholders are urged to fill in their choices with
respect to the matters to be voted on, sign and promptly return the enclosed
form of Proxy.
By Order of the Board of Directors,
/s/ David E.Y. Sarna
DAVID E. Y. SARNA
Chairman and Secretary
Hackensack, New Jersey
September 14, 1999
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<PAGE>
EXHIBIT A
Article Fourth of the Company's Certificate of Incorporation, as
amended, is to be amended to add the following immediately after the present
Section (1) thereof (which sets forth the number and par value of the Company's
authorized capital stock, none of which is being amended):
"Effective 12:01 a.m. on *
(the "Effective Time"), each + ( + ) shares of Common Stock
then issued shall be automatically combined into one share of
Common Stock of the Corporation. [Each of the "Closing Price"
as defined in the Certificate of Designation of Series E
Convertible Preferred Stock, as amended, and the "Maximum
Price" as defined in the Certificate of Designation of Series
F Convertible Preferred Stock shall be automatically increased
to a dollar amount which is + times the previous amount.]** No
fractional shares or scrip representing fractions of a share
shall be issued, but in lieu thereof, each fraction of a share
that any stockholder would otherwise be entitled to receive
shall be rounded up to the nearest whole share."
-----------------------------
* Insert the date of the Effective Time of the Amendment determined by
the Company's Board of Directors.
+ Insert Exchange Number, ranging from two to six, determined by the
Company's Board of Directors.
** Insert if, and to the extent that, shares of such series of preferred
stock are outstanding.
<PAGE>
PROXY CARD
PROXY PROXY
OBJECTSOFT CORPORATION
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
The undersigned holder of Common Stock of OBJECTSOFT
CORPORATION, revoking all proxies heretofore given, hereby constitutes and
appoints David E. Y. Sarna and George J. Febish and each of them, Proxies, with
full power of substitution, for the undersigned and in the name, place and stead
of the undersigned, to vote all of the undersigned's shares of said stock,
according to the number of votes and with all the powers the undersigned would
possess if personally present, at the Special Meeting of Stockholders of
OBJECTSOFT CORPORATION, to be held at the offices of the Company, Continental
Plaza III, 433 Hackensack Avenue, Hackensack, New Jersey on Tuesday, October 12,
1999 at 10:00 A.M., local time, and at any adjournments or postponements
thereof.
The undersigned hereby acknowledges receipt of the Notice of
Special Meeting and Proxy Statement relating to the meeting and hereby revokes
any proxy or proxies heretofore given.
Each properly executed Proxy will be voted in accordance with
the specifications made on the reverse side of this Proxy and in the discretion
of the Proxies on any other matter that may come before the meeting. Where no
choice is specified, this Proxy will be voted FOR each proposal set forth on the
reverse side.
PLEASE MARK, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR EACH OF PROPOSALS 1 AND 2
1. Proposal to approve an amendment to the Company's Certificate of
Incorporation in order to effect a stock combination (reverse
split) of the Company's Common Stock in an exchange ratio to be
approved by the Board of Directors, ranging from one newly
issued share for each two outstanding shares of Common Stock to
one newly issued share for each six outstanding shares of Common
Stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. Proposal to approve the issuance of the Company's securities
pursuant to a Subscription Agreement dated as of August 13,
1999, as amended, among the Company, Warwick Corporation, Ltd.
and the investors referred to therein.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. The proxies are authorized to vote in their discretion upon such
other business as may properly come before the meeting or any
adjournments or postponements thereof.
The shares represented by this proxy will be voted in the manner
directed. In the absence of any direction, the shares will be voted FOR each of
Proposals 1 and 2 and in accordance with the discretion of the Proxies on such
other matters as may properly come before the meeting.
Dated: _______________________, 1999
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Print Full Name
----------------------------------
Signature
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Print Full Name
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Signature if held jointly
(Signature(s) should conform to
names as registered. For jointly
owned shares, each owner should
sign. When signing as attorney,
executor, administrator, trustee,
guardian or officer of a
corporation, please give full
title.)
PLEASE MARK AND SIGN ABOVE AND RETURN
PROMPTLY IN THE ENVELOPE PROVIDED. NO POSTAGE
IS NECESSARY IF MAILED IN THE UNITED STATES.
