SCHEDULE 14A
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:
[ X ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ ] 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
Cornerstone Internet Solutions Company
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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.
A. Title of each class of securities to which transaction
applied:
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:
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CORNERSTONE INTERNET SOLUTIONS COMPANY
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 10, 2000
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To the Stockholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the
"Special Meeting") of Cornerstone Internet Solutions Company, a Delaware
corporation (the "Company"), will be held at the Mayfair Farms, West Orange, New
Jersey, on Friday, November 10, 2000, at 10:00 A.M., local time, for the
following purposes:
(1) To approve a one for five reverse stock split of the
Company's issued and outstanding Common Stock;
(2) To approve a change in the Company's name from
Cornerstone Internet Solutions Company to B2B
Enterprises, Inc.; and
3. To transact such other business as may properly be
brought before the Special Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on October 6,
2000 as the record date for the Special Meeting or any adjournments thereof.
Only stockholders of record on the stock transfer books of the Company at the
close of business on that date are entitled to notice of, and to vote at, the
Special Meeting.
By Order of the Board of Directors
KENNETH GRUBER
Secretary
Dated: October 6, 2000
New York, New York
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, YOU ARE
URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE THAT
IS PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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CORNERSTONE INTERNET SOLUTIONS COMPANY
584 Broadway, Suite 509
New York, New York 10012
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PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
November 10, 2000
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INTRODUCTION
This Proxy Statement is being furnished to stockholders by the Board of
Directors of CORNERSTONE INTERNET SOLUTIONS COMPANY, a Delaware corporation (the
"Company"), in connection with the solicitation of the accompanying Proxy for
use at a Special Meeting of Stockholders of the Company (the "Special Meeting")
to be held at the Company's principal executive offices located at Mayfair
Farms, West Orange, New Jersey, on Friday, November 10, 2000, at 10:00 A.M.,
local time, or at any adjournment thereof.
The approximate date on which this Proxy Statement and the accompanying
Proxy will first be sent or given to stockholders is October 8, 2000.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on October 6,
2000, the record date (the "Record Date") for the Special Meeting, will be
entitled to notice of, and to vote at, the Special Meeting and any adjournment
thereof. As of the close of business on the Record Date, there were 25,108,326
outstanding shares of the Company's common stock, $.01 par value (the "Common
Stock").
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VOTING OF PROXIES
Shares of Common Stock represented by Proxies that are properly
executed, duly returned and not revoked will be voted in accordance with the
instructions contained therein. If no specification is indicated on the Proxy,
all such shares will be voted (i) for the approval of a one for five reverse
stock split of the Company's issued and outstanding Common Stock, (ii) for the
approval of the change in the Company's name from Cornerstone Internet Solutions
Company to B2B Enterprises, Inc. (the "Name Change Amendment") and (iii) for any
other matter that may properly be brought before the Special Meeting in
accordance with the judgment of the person or persons voting the Proxies.
The execution of a Proxy will in no way affect a stockholder's right to
attend the Meeting and to vote in person. Any Proxy executed and returned by a
stockholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Special Meeting, or by execution of a subsequent proxy that is
presented to the Special Meeting or if the stockholder attends the Special
Meeting and votes by ballot, except as to any matter or matters upon which a
vote shall have been cast pursuant to the authority conferred by such Proxy
prior to such revocation.
The cost of solicitation of the Proxies being solicited on behalf of
the Board of Directors will be borne by the Company. In addition to the use of
the mails, proxy solicitation may be made by electronic mail, telephone,
telegraph and personal interview by officers, directors and employees of the
Company. The Company may retain a proxy solicitation firm to assist in the
solicitation of proxies. The costs of retaining such firm, which the Company
does not anticipate will exceed $20,000, would depend upon the amount and type
of services rendered. The Company will, upon request, reimburse brokerage houses
and persons holding Common Stock in the names of their nominees for their
reasonable expenses in sending soliciting material to their principals.
VOTING RIGHTS
Holders of each share of Common Stock are entitled to one vote for each
share held on all matters. The holders of a majority of the outstanding shares
of Common Stock, whether present in person or represented by proxy, will
constitute a quorum.
Broker "non-votes" and the shares as to which a stockholder abstains
from voting are included for purposes of determining whether a quorum of shares
is present at a meeting. A broker "non-vote" occurs when a nominee holding
shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that item and
has not received instructions from the beneficial owner.
The affirmative vote of a majority of the outstanding shares of Common
Stock is required to approve the one for five reverse stock split and the Name
Change Amendment. Accordingly, abstentions and broker non-votes will have the
same effect as a negative vote with respect to such proposals.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning ownership of the
Company's Common Stock, as of the Record Date, by each person known by the
Company to be the beneficial owner of more than five percent of the outstanding
Common Stock, each director, each executive officer and by all directors and
executive officers of the Company as a group. Unless otherwise indicated, the
address for each such person is in care of the Company, 584 Broadway, Suite 509,
New York, New York 10012.
Item 11 Security Ownership of Certain Beneficial Owners and Management
The following table sets forth beneficial ownership (as it relates to
dispositive power) of the Company's Common Stock as of July 31, 2000 (a) each
stockholder known by the Company to be the beneficial owner of five percent or
more of the outstanding Common Stock, (b) each director and current Executive
Officer of the Company individually, and (c) all directors and executive
officers as a group. Except as otherwise indicated in the footnotes below, (x)
the Company believes that each of the beneficial owners of the Common Stock
listed in the table, based on information furnished by such owner, has sole
investment and voting power with respect to such shares, and (y) where no
address is indicated, the address of the beneficial owner is the address of the
principal executive offices of the Company.
Name and Address of Beneficial Owner Number of Shares % of Class
(1)
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Andrew Gyenes 939,222(2) 3.7%
Harrison Weaver 27,000(3) *
Rino Bergonzi 30,000(4) *
Peter Gyenes 48,150(5) *
David Rowe 122,366(6) *
Kenneth Gruber 12,361(7) *
All directors and executive officers as a group 1,169,099(8) 4.5%
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* less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes any person
who, directly or indirectly, through any contract, arrangement,
understanding or otherwise, has or shares voting or
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investment power with respect to securities. Shares of Common Stock
issuable upon the exercise of options, warrants and convertible notes
currently exercisable or convertible, or exercisable or convertible
within 60 days are deemed outstanding for computing the percentage
ownership of the person holding such options or warrants or convertible
notesbut are not deemed outstanding for computing the percentage
ownership of any other person.
(2) Consists of 922,222 shares of Common Stock issuable upon exercise of
presently exercisable options, 10,000 shares owned by the AnnMar
Manufacturing Inc. Employee Pension Plan as trustee, and 7,000 shares
owned jointly by Mr. Gyenes and his wife.
(3) Consists of 25,000 shares of Common Stock issuable upon exercise of
presently exercisable options granted pursuant to the Company's 1995
Stock Option Plan for Outside Directors (the "Outside Directors' Plan")
and 2,000 shares owned by Mr. Weaver
(4) Consists of 30,000 shares of Common Stock issuable upon exercise of
presently exercisable options granted pursuant to the Outside
Directors' Plan.
(5) Consists of 8,150 shares of Common Stock owned by Mr. Peter Gyenes,
30,000 shares of Common Stock issuable upon exercise of presently
exercisable options granted pursuant to the Outside Directors' Plan,
and 10,000 shares owned by the AnnMar Manufacturing Inc. Employee
Pension Plan as trustee.
(6) Consists of shares of Common Stock issuable upon the exercise of
presently exercisable options.
(7) Consists of shares of Common Stock issuable upon the exercise of
presently exercisable options and 9,583 shares owned by Mr. Gruber
(8) Consists of 36,733 shares of Common Stock and presently exercisable
options to purchase 1,132,366 shares of Common Stock.
PROPOSAL I--APPROVAL OF THE REVERSE STOCK SPLIT
The Board of Directors believes it would be in the best interests of
the Company and its stockholders to effect a reverse stock split of five shares
of the Company's issued and outstanding Common Stock into one new share of
Common Stock (the "Reverse Stock Split"). In this regard, the Board has
unanimously approved, and recommends to stockholders that they approve, the
Reverse Stock Split, as described herein. The Reverse Stock Split will be
effected by the filing of an amendment to the Company's Certificate of
Incorporation, which contains the changes relating to the Reverse Stock Split,
substantially as set forth in Annex A to this Proxy Statement.
If the Reverse Stock Split is approved, each five shares of the
Company's Common Stock would be changed into one share of Common Stock. The par
value of the Common Stock would
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be changed to $.05 per share (from $.01 per share). Cash in lieu of fractional
shares would be paid to the stockholders upon the sale of such fractional
interest. The per share exercise price and the number of shares issuable upon
exercise of outstanding warrants and options will be adjusted accordingly. For
example, the Company currently has outstanding warrants and options to purchase
approximately 3,291,000 shares of Common Stock at an average exercise price of
$2.56 per share. If the Reverse Stock Split is approved, and assuming no other
grants of warrants or options or exercises of outstanding warrants or options,
the Company will have outstanding warrants and options to purchase approximately
658,200 shares of Common Stock at an average exercise price of $12.78 per share.
Purposes of the Reverse Stock Split
The Common Stock is currently listed on the Nasdaq SmallCap Market
("Nasdaq") and the Boston Stock Exchange. The Board of Directors believes that a
Reverse Stock Split may facilitate the continued listing of the Company's Common
Stock on Nasdaq. In order to be eligible for continued listing on Nasdaq, a
security must have a minimum bid price of at least $1.00 for a sustained period.
As of the Record Date, the minimum bid price of the Common Stock was $[ ] per
share, as reported by Nasdaq. If effected, the Reverse Stock Split will reduce
the number of shares of Common Stock issued and outstanding. The Board expects
that such reduction will result in an increase in the bid price of the Common
Stock to a level above the current bid price and to at least $1.00 per share.
However, since there are numerous factors and contingencies that could affect
the bid price of the Common Stock, there can be no assurance that such increase
in the bid price will occur, or, if it occurs, that the bid price will be at
least $1.00 per share for a sustained period. Moreover, there can be no
assurance that even if the minimum bid price of the Common Stock is at least
$1.00 for a sustained period, the Company will continue to meet the other
listing requirements for continued listing on Nasdaq. Accordingly, there can be
no assurance that even if the Reverse Stock Split is approved, the Company's
Common Stock will continue to be listed on Nasdaq.
The Board of Directors also believes that, even if the Common Stock is
not listed on Nasdaq, the Reverse Stock Split may improve the marketability and
liquidity of the Common Stock because the anticipated increase in the per share
price of the Common Stock should reduce the reluctance of many brokerage firms
and institutional investors to recommend the Common Stock to their clients or to
otherwise hold it in their own portfolios.
The Board of Directors believes that some of the practices of the
securities industry that may tend to discourage individual brokers within those
firms from dealing in lower-priced stocks or lending funds (i.e. providing
margin) to facilitate the purchase of such stocks have affected the per share
price of the Common Stock. Some of those practices involve time-consuming
procedures which make dealing in lower-priced stocks less appealing
economically. Furthermore, the brokerage commission on a sale of lower-priced
stock may also represent a higher percentage of the sale price than the actual
brokerage commission on a higher-priced issue.
The Board of Directors believes that a decrease in the number of issued
and outstanding shares of Common Stock, in the absence of any material
alteration in the proportionate economic
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interest in the Company held by its individual stockholders, may increase the
aggregate market value of the outstanding shares. However, the Board makes no
assurance that the market value of the Common Stock will rise in proportion to
the reduction in the number of outstanding shares resulting from the Reverse
Stock Split. Accordingly, there can be no assurance that the foregoing
objectives will be achieved or that the market price of the Common Stock
resulting upon implementation of the proposed Reverse Stock Split will be
maintained for any period of time or that such market price will approximate
five times the market price before the proposed Reverse Stock Split.
Potential Effects of the Reverse Stock Split
Pursuant to the Reverse Stock Split, each holder of five shares of
Common Stock, par value $.01 per share ("Old Common Stock"), immediately prior
to the effectiveness of the Reverse Stock Split would become the holder of one
share of Common Stock, par value $.05 per share ("New Common Stock"), after
consummation of the Reverse Stock Split.
Although the Reverse Stock Split will not, by itself, impact the
Company's assets or prospects, the Reverse Stock Split could result in a
decrease in the aggregate market value of the Company's equity capital. The
Board of Directors believes that this risk is outweighed by the benefits of the
Reverse Stock Split.
If approved, the Reverse Stock Split will result in some stockholders
owning "odd-lots" of less than 100 shares of Common Stock. Brokerage commissions
and other costs of transactions in odd-lots are generally somewhat higher than
the costs of transactions in "round- lots" of even multiples of 100 shares.
Increase of Shares of Common Stock Available for Future Issuance
As a result of the Reverse Stock Split, there will be a reduction in
the number of shares of Common Stock issued and outstanding, or held as treasury
shares, and an associated increase in the number of authorized shares which
would be unissued and available for future issuance after the Reverse Stock
Split (the "Increased Available Shares"). The Increased Available Shares could
be used for any proper corporate purpose approved by the Board of Directors of
the Company including, among others, future financing transactions.
Because the Reverse Stock Split will create the Increased Available
Shares, the Reverse Stock Split may be construed as having an anti-takeover
effect. Although neither the Board of Directors nor the management of the
Company views the Reverse Stock Split as an anti-takeover measure, the Company
could use the Increased Available Shares to frustrate persons seeking to effect
a takeover or otherwise gain control of the Company.
Effectiveness of the Reverse Stock Split
The Reverse Stock Split, if approved by the Company's stockholders,
would become effective (the "Effective Date") upon the filing with the Secretary
of State of the State of
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Delaware of a Certificate of Amendment of the Company's Certificate of
Incorporation in substantially the form of the Reverse Stock Split Amendment
attached to this Proxy Statement as Annex A (which does not include the Name
Change Amendment since the Name Change Amendment will be separately approved).
It is expected that such filing will take place on or shortly after the date of
the Special Meeting, assuming the stockholders approve the Reverse Stock Split.
However, the exact timing of the filing of such Certificate of Amendment will be
determined by the Board of Directors based upon its evaluation as to when such
action will be most advantageous to the Company and its stockholders, and the
Board of Directors reserves the right to delay the Reverse Stock Split Amendment
for up to twelve months following stockholder approval thereof. In addition, the
Board of Directors reserves the right, notwithstanding stockholder approval and
without further action by the stockholders, to elect not to proceed with the
Reverse Stock Split Amendment if, at any time prior to filing such Reverse Stock
Split Amendment, the Board of Directors, in its sole discretion, determines that
it is no longer in the best interests of the Company and its stockholders.
Commencing on the Effective Date, each Old Common Stock certificate
will be deemed for all corporate purposes to evidence ownership of the reduced
number of shares of Common Stock resulting from the Reverse Stock Split and any
cash which may be payable in lieu of fractional shares. As soon as practicable
after the Effective Date, stockholders will be notified as to the effectiveness
of the Reverse Stock Split and instructed as to how and when to surrender their
certificates representing shares of Old Common Stock in exchange for
certificates representing shares of New Common Stock (and, if applicable, cash
in lieu of fractional shares).
On the Effective Date, the interest of each stockholder of record who
owns fewer than five shares of Common Stock will thereby be terminated, and he,
she or it will have no right to vote as a stockholder or share in the assets of
any future earnings of the Company.
Federal Income Tax Consequences
The following is a summary of the material anticipated Federal income
tax consequences of the Reverse Stock Split to stockholders of the Company. It
should be noted that this summary is based upon the Federal income tax laws
currently in effect and as currently interpreted. This summary does not take
into account possible changes in such laws or interpretations, including any
amendments to applicable statutes, regulations and proposed regulations, or
changes in judicial or administrative rulings, some of which may have
retroactive effect. The summary is provided for general information only, and
does not purport to address all aspects of the range of possible Federal income
tax consequences of the Reverse Stock Split and is not intended as tax advice to
any person. In particular, and without limiting the foregoing, this summary does
not account for or consider the Federal income tax consequences to stockholders
of the Company in light of their individual investment circumstances or to
holders subject to special treatment under the Federal income tax laws (for
example, life insurance companies, regulated investment companies, and foreign
taxpayers). This summary does not discuss any consequence of the Reverse Stock
Split under any state, local or foreign tax laws.
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No ruling from the Internal Revenue Service or opinion of counsel will
be obtained regarding the Federal income tax consequences to the stockholders of
the Company in connection with the Reverse Stock Split. Accordingly, each
stockholder is encouraged to consult its own tax adviser regarding the specific
tax consequences of the proposed Reverse Stock Split to such stockholder,
including the application and effect of federal, state, local and foreign taxes,
and any other tax laws.
The Board of Directors believes that the Reverse Stock Split would be a
tax-free recapitalization to the Company and its stockholders. If the Reverse
Stock Split qualifies as a recapitalization described in Section 368(a)(1)(E) of
the Internal Revenue Code of 1986, as amended (the "Code"), (i) no gain or loss
will be recognized by a stockholder of Common Stock who exchanges its Common
Stock for new Common Stock, except that a holder of Common Stock who receives
cash proceeds from the sale of fractional shares of Common Stock will recognize
a gain or loss equal to the difference, if any, between such proceeds and the
basis of its Common Stock allocated to its fractional share interests, and such
gain or loss, if any, will constitute capital gain or loss if its fractional
share interests are held as capital assets at the time of their sale, (ii) the
tax basis of the New Common Stock received by holders of Common Stock will be
the same as the tax basis of the Common Stock exchanged therefor, less the tax
basis allocated to fractional share interests and (iii) the holding period of
the new Common Stock in the hands of holders of New Common Stock will include
the holding period of their Common Stock exchanged therefor, provided that such
Common Stock was held as a capital asset immediately prior to the exchange.
Conclusion
The Board of Directors has considered this Proposal and believes that
the Reverse Stock Split of the Company's issued and outstanding shares of Common
Stock is in the best interests of its stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT THE COMPANY'S
STOCKHOLDERS VOTE FOR THE REVERSE STOCK SPLIT.
PROPOSAL II - PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY TO B2B ENTERPRISES, INC.
The Board of Directors has unanimously adopted a resolution
declaring it advisable to amend the Company's Certificate of Incorporation to
change the name of the Company from Cornerstone Internet Solutions Company to
B2B Enterprises, Inc. The Board of Directors further directed that the Name
Change Amendment be submitted for consideration by stockholders at the Special
Meeting.
The Board of Directors believes that the Name Change Amendment
is in the Company's best interest because the proposed new corporate name
reflects the Company's transition from being a provider of comprehensive
business-to-business (B2B) e-commerce services and solutions to focus
exclusively on the growth of B2BGalaxy.com, an operating unit
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that develops industry specific business-to-business e-commerce marketplace and
procurement technology. As part of such transition, the Board of Directors of
the Company on September 25, 2000 has announced the dissolution of its
professional service subsidiary, MarchFIRST Cornerstone. The Board of Directors
believes that, notwithstanding the goodwill associated with the Company's
present name, it is necessary to change the corporate name to broaden the appeal
of the Company among potential customers.
There can be no assurance that the new corporate name will
enhance the Company's ability to create industry specific business-to-business
e-commerce portals, attract a broader range of customers, or that the name
change will not create confusion that will cause the Company to lose customers.
However, taking the foregoing into account, the Board of Directors deems that on
balance the Name Change Amendment is in the best interest of the Company and its
stockholders.
In the event the Name Change Amendment is approved by
stockholders, the Company will thereafter file a Certificate of Amendment to its
Certificate of Incorporation with the Delaware Secretary of State, amending
Article I thereof, which will become effective at the close of business on the
date such filing is accepted by the Secretary of State. As amended, such Article
I would read in its entirety as follows"
"Article I - Name. The name of the Corporation shall be B2B Enterprises, Inc."
Conclusion
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS VOTE
FOR THE PROPOSAL TO CHANGE THE NAME OF THE COMPANY TO B2B ENTERPRISES, INC.
INCORPORATION BY REFERENCE
This Proxy Statement incorporates by reference the Company's
Audited Financial Statements for the fiscal years ended May 31, 2000 and May 31,
1999 as well as Management's Discussion and Analysis of Financial Conditions and
Results of Operations. Such information is included in the Company's Annual
Report on Form 10-KSB for the fiscal year ended May 31, 2000.
ANY STOCKHOLDER OF THE COMPANY MAY OBTAIN WITHOUT CHARGE A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED MAY 31, 2000,
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY WRITING TO KENNETH
GRUBER, CHIEF FINANCIAL OFFICER AND SECRETARY AT CORNERSTONE INTERNET SOLUTIONS
COMPANY, 584 BROADWAY, SUITE 509, NEW YORK, NEW YORK 10012.
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OTHER MATTERS
As of the date of this Proxy Statement, management knows of no
matters other than those set forth herein which will be presented for
consideration at the Special Meeting. If any other matter or matters are
properly brought before the Special Meeting or any adjournment thereof, the
persons named in the accompanying Proxy will have discretionary authority to
vote, or otherwise act, with respect to such matters in accordance with their
judgment.
/s/ Kenneth Gruber
Kenneth Gruber
Secretary
October 8, 2000
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ANNEX A
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
CORNERSTONE INTERNET SOLUTIONS COMPANY
Cornerstone Internet Solutions Company, a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of Cornerstone Internet Solutions
Company at a duly called meeting, duly adopted resolutions setting forth a
proposed amendment of the Certificate of Incorporation of said corporation,
declaring said amendment to be advisable and proposing that said amendment be
considered by the stockholders of said corporation. The resolution setting forth
the proposed amendment is as follows:
RESOLVED, that the Board of Directors declares that it is
advisable to amend Article FOURTH of the Certificate of Incorporation
of the Corporation as follows:
FOURTH: This corporation is authorized to issue two
classes of stock to be designated, respectively, "Common
Stock" and "Preferred Stock." The total number of shares of
Common Stock this Corporation is authorized to issue is
50,000,000, par value $0.05 per share, and the total number of
shares of Preferred Stock this Corporation is authorized to
issue is 2,000,000 shares of Preferred Stock, with the Board
of Directors being hereby authorized to fix or alter the
rights, preferences, privileges and restriction granted to or
imposed upon any series of such Preferred Stock, and the
number of shares constituting any such series and the
designation thereof, or of any of them. The Board of Directors
is also authorized to increase or decrease the number of
shares of any series, prior or subsequent to the issue of that
series, but not below the number of shares of such series then
outstanding. In case the number of shares of any series shall
be so decreased, the shares constituting such decrease shall
resume the status which they had prior to the adoption of the
resolution originally fixing the number of shares of such
series.
Simultaneously with the effective date of the filing
of this amendment to the Corporation's Certificate of
Incorporation (the "Effective Date"), each share of common
stock, par value $.01 per share, of the Corporation issued and
outstanding or held as treasury shares immediately prior to
the Effective Date (the "Old Common Stock") shall
automatically be reclassified and continued (the "Reverse
Stock Split"), without any action on the part of the holder
thereof, as one-fifth of one share of Common Stock. The
Corporation shall not issue
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fractional shares on account of the Reverse Split. Holders of
Old Common Stock who would otherwise be entitled to a fraction
of a share on account of the Reverse Split shall receive, upon
surrender of the stock certificates formerly representing
shares of the Old Common Stock, in lieu of such fractional
share, an amount in cash (the "Cash-in-Lieu Amount") equal to
the product of (i) the fractional share which a holder would
otherwise be entitled to, multiplied by (ii) five times [such
price as the Corporation's Board of Directors determines, in
its discretion, to the be fair market value per share of the
Old Common Stock] on the business day prior to the Effective
Date. No Interest shall be payable on the Cash-in-Lieu
Amount."
SECOND: That thereafter, the stockholders of said corporation, at a
duly called meeting of the stockholders, voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, Cornerstone Internet Solutions Company has caused
this Certificate to be signed by _______________, its ___________, this day of
____________, 2000.
CORNERSTONE INTERNET SOLUTIONS
COMPANY
By:___________________________________
[ ]
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CORNERSTONE INTERNET SOLUTIONS COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
CORNERSTONE INTERNET SOLUTIONS COMPANY
The undersigned, a stockholder of Cornerstone Internet Solutions
Company, a Delaware corporation (the "Company"), hereby appoints Andrew Gyenes
and Kenneth Gruber and each of them, attorneys-in-fact, agents and proxies, with
full power of substitution to each, for and in the name of the undersigned and
with all of the powers the undersigned would possess if personally present, to
vote all of the shares of Common Stock of the Company which the undersigned is
entitled to vote at the Special Meeting of Stockholders (the "Special Meeting")
of the Company, to be held at Mayfair Farms, West Orange, New Jersey on Friday,
November 10, 2000 at 10:00 a.m. and at all adjournments or postponements
therefore, hereby revoking any proxy heretofore given.
The Board of Directors recommends a vote FOR the proposals:
To approve a one for five reverse stock split of the Company's issued
and outstanding Common Stock.
FOR _____ AGAINST _____ ABSTAIN _____
To approve a change in the Company's name from Cornerstone Internet
Solutions Company to B2B Enterprises, Inc.
FOR _____ AGAINST _____ ABSTAIN _____
The proxies are hereby authorized to vote in their discretion upon all
other business as may properly come before the Special Meeting.
This Proxy will be voted as directed, but if no direction is indicated,
it will be voted FOR the approval of the reverse stock split of the
Company's issued and outstanding Common Stock and the change in the
Company's name from Cornerstone Internet Solutions Company to B2B
Enterprises, Inc.
Receipt is acknowledged of the Notice of Special Meeting of
Stockholders and accompanying Proxy Statement.
PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
SIGNATURE:
-----------------------------
SIGNATURE:
-----------------------------
DATE:
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NOTE: Please sign exactly as your name appears on this Proxy. If
signing as attorney, executor, trustee or in other representative
capacity, sign name and indicate title.
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