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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:
\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 Rule 14a-11(c) or Rule
14a-12
TEAMSTAFF, INC.
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(Name of the Corporation as Specified in Charter)
Donald T. Kelly, Secretary
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(Name of Person(s) Filing Proxy Statement)
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:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
\ \ 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 form or schedule and the date of filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form schedule or registration number:
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(3) Filing party:
- --------------------------------------------------------------------------------
(4) Dated filed:
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TEAMSTAFF, INC.
(FORMERLY DIGITAL SOLUTIONS, INC.)
300 Atrium Drive
Somerset, New Jersey 08873
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
To Be Held on May __, 2000
To the Shareholders of TEAMSTAFF, INC.
NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders of
TEAMSTAFF, INC., formerly Digital Solutions, Inc. (the "Company"), will be held
at the offices of the Company, 300 Atrium Drive, Somerset, New Jersey 08873 on
May __, 2000 at 11:00 AM New Jersey Time, for the following purposes:
1. To re-approve a proposal to grant the Board of Directors the
authority to amend the Articles of Incorporation of the Company to effect a
reverse stock split of the Company's Common Stock, par value $.001 per share, on
a 1:3.5 basis, all as set forth in the form of Amended and Restated Articles of
Incorporation contained in Appendix A annexed hereto; and
2. To transact such other business as may properly be brought before
the meeting or any adjournment thereof.
At the Annual Meeting of Shareholders held on April 13, 2000,
shareholders previously approved a proposal to authorize the Board of Directors
to effect a reverse stock split in a range of 1:3 to 1:3.5. The Board of
Directors has decided to re-submit the proposal to shareholders due to a change
of circumstances caused by the acquisition of the PEO division of Outsource
International Inc., which occurred three days prior to the Annual Meeting.
The close of business on April 18, 2000 has been fixed as the record
date ("Record Date") for the determination of shareholders entitled to notice
of, and to vote at, the Special Meeting and any adjournment thereof.
You are cordially invited to attend the Special Meeting. Whether or not
you plan to attend, please complete, date and sign the accompanying proxy and
return it promptly in the enclosed envelope to assure that your shares are
represented at the Special Meeting. If you do attend, you may revoke any prior
proxy and vote your shares in person if you wish to do so. Any prior proxy will
automatically be revoked if you execute the accompanying proxy or if you notify
the Secretary of the Company, in writing, prior to the Special Meeting.
By Order of the Board of Directors
Donald T. Kelly, Secretary
Dated: April __, 2000
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WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN
ORDER TO ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES.
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TEAMSTAFF, INC.
(FORMERLY DIGITAL SOLUTIONS, INC.)
300 Atrium Drive
Somerset, New Jersey 08873
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY __, 2000
This proxy statement and the accompanying form of proxy have been
mailed to the shareholders of Common Stock of record of April 18, 2000 (the
"Record Date") of TEAMSTAFF, INC., a New Jersey corporation (the "Company") in
connection with the solicitation of proxies by the Board of Directors of the
Company for use at the Special Meeting of Shareholders to be held on May __,
2000 at 11:00 a.m. and at any adjournment thereof.
SOLICITATION, VOTING AND REVOCABILITY OF PROXY
Shares of the Company's Common Stock par value $.001 per share
represented by a properly executed Proxy in the accompanying form will, unless
contrary instructions are specified in the Proxy, be voted FOR the proposal to
effect a reverse split of the Company's Common Stock of 1:3.5. Each share of
common stock is entitled to one vote. Voting is on a noncumulative basis.
Any proxy may be revoked at any time before it is voted. A shareholder
may revoke a proxy by submitting a proxy bearing a later date or by notifying
the Secretary of the Company either in writing prior to the Special Meeting or
in person at the Special Meeting. Revocation is effective only upon receipt of
such notice by the Secretary of the Company. Approval of the reverse stock split
requires the affirmative vote of a majority of the votes cast at the Special
Meeting by the holders of shares of Common Stock entitled to vote. Abstentions
will be considered as votes represented at the Special Meeting solely for quorum
purposes.
The Company will bear the cost of the solicitation of proxies by the
Board of Directors. The Board of Directors may use the services of its executive
officers and certain directors to solicit proxies from shareholders in person
and by mail, telegram and telephone. Arrangements may also be made with brokers,
fiduciaries, custodians, and nominees to send proxies, proxy statements and
other material to the beneficial owners of the Company's common stock held of
record by such persons, and the Company may reimburse them for reasonable
out-of-pocket expenses incurred by them in so doing.
The Company's Annual Report to shareholders was previously delivered to
shareholders of record for the Annual Meeting and does not accompany this proxy
statement.
The principal executive offices of the Company are located at 300
Atrium Drive, Somerset, New Jersey 08873; the Company's telephone number is
(732) 748-1700.
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VOTING SECURITIES AND SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The securities entitled to vote at the Special Meeting are the
Company's common stock, $.001 par value. Each share of common stock entitles its
holder to one vote on each matter submitted to shareholders. The close of
business on April 18, 2000 has been fixed as the Record Date for the
determination of shareholders entitled to notice of and to vote at the meeting
and any adjournment thereof. As of April 18, 2000, 27,932,513 shares of common
stock were issued and outstanding. Voting of the shares of common stock is on a
noncumulative basis.
The following table sets forth certain information as of April __, 2000
with respect to each director, each of the named executive officers as defined
in Item 402(a)(3), and directors and executive officers of the Company as a
group, and to the persons known by the Company to be the beneficial owner of
more than five percent of any class of the Company's voting securities.
Number of Shares Percent of Company's
Name of Shareholder Presently Owned(1) Outstanding Stock
Karl W. Dieckmann(2) 320,743 1.15%
c/o TeamStaff, Inc.
300 Atrium Drive
Somerset, NJ 08873
John H. Ewing(3) 153,125 *
76 Claremont Road
Barnardsville, NJ 07924
William J. Marino(4) 98,617 *
c/o Blue Cross/Blue Shield
of New Jersey
3 Penn Plaza East
Newark, NJ 07105
Donald W. Kappauf(5)
c/o TeamStaff, Inc. 734,248 2.60%
300 Atrium Drive
Somerset, NJ 08873
Rocco J. Marano (6) 40,398 *
c/o TeamStaff, Inc.
300 Atrium Drive
Somerset, NJ 08873
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Donald T. Kelly(7) 88,850 *
c/o TeamStaff, Inc.
300 Atrium Drive
Somerset, NJ 08873
Charles R. Dees, Jr. Ph.d(8) 11,586 0
c/o TeamStaff, Inc.
300 Atrium Drive
Somerset, NJ 08873
Martin J. Delaney(9)
c/o TeamStaff, Inc. 118,073 *
300 Atrium Drive
Somerset, NJ 08873
Kirk Scoggins (10) 3,286,931 11.76%
c/o TeamStaff, Inc.
300 Atrium Drive
Somerset, NJ 08873
Warren M. Cason (11) 2,220,654 7.95%
400 N. Ashley Drive, Suite 2300
Tampa, FL 33602
Warren M. Cason Jr. (12) 1,843,889 6.60%
Trustee of the Dorothy C. Cason
1997 Three Year Grantor Retained
Annuity Trust c/o Warren M. Cason
400 N. Ashley Drive, Suite 2300
Tampa, FL 33602
All officers and directors as a group 4,852,571 _____%
(8)persons (2,3,4,5,6,7,8,9,14)
* Less than 1 percent.
(1) Ownership consists of sole voting and investment power except as
otherwise noted.
(2) Includes options to purchase 20,000 shares of the Company's common
stock, and excludes unvested options to purchase 5,000 shares of common
stock.
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(3) Includes options to purchase 25,000 shares of the Company's common
stock, and excludes unvested options to purchase 5,000 shares of common
stock.
(4) Includes options to purchase 40,000 shares of the Company's common
stock, and warrants to purchase 2,500 shares of common stock, and
excludes unvested options to purchase 5,000 shares of common stock.
(5) Includes options to purchase 347,500 shares of the Company's common
stock, and excludes unvested options to purchase 200,000 shares of
common stock.
(6) Includes options to purchase 5,000 shares and excludes options to
purchase 5,000 shares of Common Stock.
(7) Includes options to purchase 80,000 shares of the Company's common
stock, and excludes unvested options to purchase 100,000 shares of
common stock.
(8) Includes options to purchase 6,250 shares of common stock, and excludes
unvested options to purchase 5,000 shares of common stock.
(9) Includes options to purchase 6,250 shares of common stock, and excludes
unvested options to purchase 5,000 shares of common stock.
(10) Mr. Scoggins received these shares as a former owner of the TeamStaff
Companies which were acquired by the Company on January 25, 1999. Mr.
Scoggins also joined the Company's Board of Directors on January 25,
1999. Of the 3,286,921 shares currently owned by Mr. Scoggins, 223,442
shares have been placed in escrow to indemnify the Company for certain
representations regarding TeamStaff Companies made by the former owners
of the TeamStaff Companies. Excludes unvested options to purchase
100,000 shares. Mr. Scoggins is the husband of Melissa Scoggins, the
trustee under the Kirk Allen Scoggins 1997 Three Year Trust which owns
721,522 shares of Common Stock which shares are also excluded.
(11) Mr. Cason received these shares as a former owner of the TeamStaff
Companies which were acquired by the Company on January 25, 1999. Of
the 2,220,654 shares currently owned by Mr. Cason, 150,957 shares have
been placed in escrow to indemnify the Company for certain
representations regarding TeamStaff Companies made by the former owners
of the TeamStaff Companies. Mr. Cason is the father-in-law of Kirk
Scoggins. Also excludes 160,338 shares of Common Stock owned by Dorothy
Cason, the spouse of Warren Cason.
(12) This Trust received these shares as a former owner of the TeamStaff
Companies which were acquired by the Company on January 25, 1999. Of
the 1,843,889 shares currently owned by this Trust, 125,355 shares have
been placed in escrow to indemnify the Company for certain
representations regarding TeamStaff Companies made by the former owners
of the TeamStaff Companies.
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PROPOSAL 1
REVERSE SPLIT
The Board of Directors has unanimously determined that it is in the
best interests of the Company to effect a reverse split of the Company's Common
Stock. Accordingly, the Board of Directors has unanimously approved, and
recommends Shareholder approval of, a resolution granting authority to the Board
of Directors to amend the Company's Articles of Incorporation to declare and
implement a reverse split of the Company's common stock on a 1:3.5 basis.
Shareholders are urged to carefully read the materials that follow as they
involve matters of particular importance. The full text of the proposed
amendment to the Articles of Incorporation is set forth in the form of Amended
and Restated Articles of Incorporation contained in Appendix A to this Proxy
Statement.
BACKGROUND OF THE PROPOSED AMENDMENT
The Board of Directors has unanimously approved a proposal to amend
the Articles of Incorporation to effect a reverse stock split of the Company's
Common Stock, $.001 par value per share, of 1:3.5, whereby every three and
one-half shares of Common Stock currently outstanding will be exchanged for one
new share of Common Stock. By way of example, a shareholder holding 35,000
shares of Common Stock prior to the reverse split will be deemed to be the owner
of 10,000 shares after the reverse split. All fractional shares resulting from
the reverse stock split will be settled in cash, based upon the last sale price
of the Common Stock on the day prior to the effective date of the reverse stock
split.
The Board of Directors originally approved the reverse split, along
with the other proposals, on January 20, 2000, for submission to the
Shareholders at the Annual Meeting held on April 13, 2000. The March 8, 2000
proxy statement for the Annual Meeting cited two principal reasons for the
reverse split: increasing the stock price to make the Company's common stock a
more attractive investment and qualifying for the Nasdaq National Market System.
At the time of the March 8, 2000 proxy statement, management of the Company
believed that, with the completion of certain contemplated restructurings, the
Company would meet all of the initial listing criteria of the Nasdaq National
Market System, provided the reverse split caused the Common Stock to trade above
$5.00, as required for initial listing. At the Annual Meeting, the Shareholders
overwhelmingly approved the adoption of a resolution authorizing the Board of
Directors to effect a reverse split of the Common Stock in the range of 1:3 to
1:3.5 by the affirmative vote of 23,937,603 shares, representing approximately
93% of the shares voting on the proposal.
After the March 8, 2000 proxy statement was mailed, the Company became
aware of an opportunity to purchase the professional employer organization
business of Outsource International, Inc. operating under the name tradename
Synadyne The Company was advised that Outsource had immediate cash needs and
accordingly the Company believed it could negotiate a favorable
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purchase price provided it was able to close the transaction on an expedited
basis and pay the purchase price in cash. Under the terms of the letter of
intent for the transaction, Outsource required that the transaction be closed on
or about March 31, 2000, subsequently extended to April 10, 2000. On April 10,
2000, three days prior to the Shareholders meeting and after most of the
Company's Shareholders had returned their proxies, the Company announced the
completion of the acquisition of the assets of Synadyne. The purchase price of
$3,500,000 was paid in cash which was funded by an increase in the Company's
lending facilities.
The Company believes the acquisition of the Synadyne assets will
significantly enhance the Company's financial performance in the future;
however, the acquisition resulted in an increase in intangible assets which
currently prevents the Company from complying with the net tangible assets
listing requirements of the Nasdaq National Market System. Among other criteria,
companies such as TeamStaff applying for listing on the National Market System
which have a market capitalization of less than $75,000,000 (or revenues and
total assets of less than $75,00,0000) are required to have net tangible assets
of at least $6,000,000. Even taking into consideration certain planned
restructurings, the Company's net tangible assets may not equal or exceed
$6,000,000. Although the Board of Directors still believes the reverse split is
in the best interests of the Company and strongly urges its adoption, the Board
has decided to resubmit the proposal to the Shareholders so that Shareholders
will be able to make an informed decision based on current information. The
Board has determined that the 1:3.5 ratio is appropriate for the split and
therefore has not requested authority for a range for the split.
The primary reason for proposing the reverse stock split has not
changed. Management believes that the current low price of our common stock
dissuades large numbers of potential investors, such as institutional investors
and other investment companies and professional investors, from investing in our
Common Stock. This belief is based on frequent common responses from investor
groups addressed by the Company stating that their own investment criteria
precluded an investment in a low priced stock. Therefore, management believes
that by increasing the current price of the Company's Common Stock, the
investment community will more favorably consider an investment in the Company.
The relatively low stock price also impacts the ability of the Company
to make acquisitions of other businesses. Thus the Company loses one of the
primary tools of a public entity --- the ability to use stock to expand the
business through acquisitions.
The par value of the Common Stock will remain at $.001 after the
reverse stock split. There are presently 40,000,000 shares of Common Stock,
$.001 par value per share, authorized by the Company's Articles of
Incorporation. The amendment provides that the number of authorized shares of
Common Stock will remain at 40,000,000 shares after the reverse split is
effected, and these shares will be available for issuance without any further
shareholder approval. As of the Record Date, there were 27,932,513 , shares of
Common Stock issued and outstanding and 1,698,079 shares of Common Stock
reserved for issuance upon the conversion or exercise of various securities of
the Company. If the one for three and one half reverse stock split is effected,
the number of shares of
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Common Stock issued and outstanding will be 7,980,718 and the number of shares
of Common Stock reserved for issuance will be 485,165. The Company believes that
shareholders will not have any greater difficulty disposing of stock in the
event a reverse stock split is effected.
In the event that the Company completes the reverse stock split, the
number of shares that an investor owns would be reduced, but theoretically the
economic interest in the Company represented by the shares held by an investor
would have the same value as prior to the split. While there can be no
assurances that the price of the Common Stock on a post-split basis will
increase to the mathematical equivalent of the reverse stock split, the Board of
Directors believes that it is the Company's only alternative currently available
to raise the bid price of the Common Stock to a level which will be acceptable
to increase investor interest in the Company.
If the amendment to effect the reverse stock split is adopted by the
shareholders, the Amended and Restated Articles of Incorporation in the form
annexed as Appendix A will be filed with the Secretary of State of the State of
New Jersey immediately following approval of the reverse split by the
shareholders and the board of directors.
AMENDMENT PROPOSED BY THE BOARD OF DIRECTORS
The following description of the amendment is qualified in its entirety
by reference to the form of the Amended and Restated Articles of Incorporation
annexed hereto as Appendix A.
The Company's Articles of Incorporation currently authorizes the
issuance of 40,000,000 shares of Common Stock, par value $.001 per share. As of
the Record Date, the Company had 27,932,513 issued and outstanding shares of
Common Stock. As of such date, there was also reserved for issuance upon the
conversion or exercise of various securities of the Company 1,698,079 shares of
Common Stock, leaving a total of 10,369,408 authorized, unissued and unreserved
shares of Common Stock available for future issuances. If the reverse stock
split is effected, the number of shares of Common Stock issued and outstanding
will be 7,980,718 and the number of shares of Common Stock reserved for issuance
will be 485,166, leaving a total of 31,543,116 authorized, unissued and
unreserved shares of Common Stock available for future issuances.
If the reverse stock split is approved by Shareholders, each three and
one-half shares outstanding would be exchanged for one new share of Common Stock
in accordance with the reverse stock split, as of the date on which the
amendment to the Company' s Articles of Incorporation is filed with the
Secretary of State of the State of New Jersey (the "Effective Date"). The par
value of the new Common Stock will remain at $.001 per share. By way of example,
if a shareholder owns 35,000 shares prior to the reverse stock split and the
reverse stock split is authorized by the Shareholders and approved by the Board
of Directors, then the shareholder would own 10,000 shares.
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No fractional shares of new Common Stock will be issued for any
fractional new share interest. Rather, each Shareholder who would otherwise
receive a fractional new share of Common Stock as a result of the Reverse Stock
Split will receive an amount of cash equal to the last sale price of a share of
Common Stock as reported by the Nasdaq Stock Market on the date immediately
preceding the Effective Date multiplied by the number of shares of Common Stock
held by such holder that would otherwise have been exchanged for such fractional
interest. Because the price of the Common Stock fluctuates, the amount to be
paid for fractional shares cannot be determined until the Effective Date and may
be greater or less than the price on the date that any Shareholder executes his
proxy.
If this reverse stock split is approved, the Company will notify
Shareholders of the filing of the Amended and Restated Articles of Incorporation
with the New Jersey Secretary of State and will furnish to Shareholders of
record as of the close of business on the Effective Date with a Letter of
Transmittal for use in exchanging certificates. The Shareholders of the Company,
promptly after the Amended and Restated Articles of Incorporation becomes
effective, will be requested to mail their certificates representing their
shares of Common Stock of the Company to the Exchange Agent named in the Letter
of Transmittal and a new stock certificate giving effect to the reverse stock
split will be issued and proceeds of the settlement of fractional interests
delivered promptly.
After giving effect to the settlement of fractional shares of Common
Stock, there will be no material differences between those securities
outstanding prior to the Effective Date of the reverse stock split and those to
be outstanding after the Effective Date. A reverse stock split will, however,
result in adjustments to the exercise price, conversion rates and number of
shares issuable upon the exercise or conversion of certain outstanding options
and warrants.
As a result of the reverse stock split, cash proceeds received from the
settlement of fractional shares may result in a Shareholder realizing taxable
gain or loss to the extent of the difference between such proceeds and the cost
or other basis applicable to the fractional shares. No officer, director,
associate or affiliate of the Company is expected to derive any material benefit
from approval of a reverse stock split other than the benefits which would be
enjoyed by any other person holding the same number of shares.
The Board of Directors believes that it is in the best interest of the
Company to grant the Board of Directors authority to declare and implement a
one-for-three and one-half reverse stock split.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of
Common Stock, appearing in person or by proxy, voting as a single class, is
required for the approval of this Proposal 1.
THE BOARD OF DIRECTORS DEEMS THE REVERSE STOCK SPLIT TO BE IN THE BEST
INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND
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RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's
2001 Annual Meeting of Shareholders must be received by the Company on or before
November 8, 2000 to be eligible for inclusion in the Company's proxy statement
and form of proxy to be used in connection with the 2001 Annual Meeting of
Shareholders.
OTHER BUSINESS
As of the date of this Proxy Statement, the only business which the
Board of Directors intends to present, and knows that others will present, at
the Special Meeting is that herein above set forth. If any other matter or
matters are properly brought before the Special Meeting, or any adjournments
thereof, it is the intention of the persons named in the accompanying form of
proxy to vote the proxy on such matters in accordance with their judgment.
By Order of the Board of Directors
Donald T. Kelly,
April __, 2000 Secretary
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND
RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF
IT IS MAILED IN THE UNITED STATES OF AMERICA.
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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
TEAMSTAFF, INC.
The undersigned corporation, in order to amend and restate its Amended
and Restated Certificate of Incorporation, hereby certifies as follows:
FIRST: The name of the corporation is:
TEAMSTAFF, INC.
SECOND: The Corporation was originally incorporated in New Jersey on
November 25, 1969 under the name "Digital Solutions, Inc."
THIRD: Article THIRD of The Amended and Restated Certificate of
Incorporation is hereby amended to effect the following:
(a) All the shares of Common Stock, par value $.001 per
share, issued and outstanding as of the date of the filing of this
Certificate of Amendment of the Certificate of Incorporation are hereby
subject to a reverse stock split, whereby every 3.5 shares of issued
and outstanding shares of Common Stock (and it being intended that the
number of shares of Common Stock issuable upon exercise or conversion
of all issued and outstanding Preferred Stock, options, warrants and
convertible securities of every kind and all options under the
Company's Employee Stock Option Plan) shall equal 1 share of Common
Stock following the filing of this Certificate of Amendment.
FOURTH: The text of the Amended and Restated Certificate of
Incorporation, as amended hereby, is restated in its entirety as follows:
FIRST: The name of the corporation is:
TEAMSTAFF INC.
SECOND: The purpose or purposes for which the corporation is
organized are:
To do any lawful act or thing for which corporations may be organized
pursuant to the provisions of Title 14A, Corporations, General, of the New
Jersey Statutes.
THIRD: Capital Stock
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(A) Authorized Capital Stock. The total number of shares of all classes
of stock which this Corporation shall have authority to issue is FORTY-FIVE
MILLION (45,000,000) shares, consisting of FORTY MILLION (40,000,000) shares of
common stock, $.001 par value per share (hereinafter, the "Common Stock:), and
FIVE MILLION (5,000,000) shares of Preferred Stock, $.10 par value per share
(hereinafter, the "Preferred Stock").
(B) Reverse Stock Split. All the shares of Common Stock, par value
$.001 per share, issued and outstanding as of the date of the filing of this
Certificate of Amendment of the Certificate of Incorporation are hereby subject
to a reverse stock split, whereby every 3.5 shares of issued and outstanding
shares of Common Stock (and it being intended that the number of shares of
Common Stock issuable upon exercise or conversion of all issued and outstanding
Preferred Stock, options, warrants and convertible securities of every kind and
all options under the Company's Employee Stock Option Plan) shall equal 1 share
of Common Stock following the filing of this Certificate of Amendment.
(C) Preferred Stock.
(i) Shares of Preferred Stock may be issued from time to time in
one or more series as may from time to time be determined by the Board of
Directors. Each series shall be distinctly designated. The relative rights,
preferences and limitations of shares of undesignated Preferred Stock shall be
as provided in sub-paragraph B (ii) of this Article THIRD.
(ii) Undesignated Preferred Stock. Shares of Preferred Stock may
be issued from time to time in one or more series as may from time to time be
determined by the Board of Directors. Each series shall be distinctly
designated. All shares of any one series of the Preferred Stock shall be alike
in every particular event except that there may be different dates from which
dividends thereon, if any, shall be cumulative, if made cumulative. The powers,
preferences and relative, participating, optional and other rights of each
series, and the qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time outstanding. Subject
to the provisions of this Article THIRD, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of each particular
series of Preferred Stock, the designation, powers, preferences and relative,
participating, optional and other rights, and the qualifications, limitations
and restrictions thereof, if any, of such series, including, but without
limiting the generality of the foregoing, the following:
(1) the distinctive designation of and the number of
shares of Preferred Stock which shall constitute the series, which number may be
increased (except as otherwise fixed by the Board of Directors) or decreased
(but not below the number of shares thereof then outstanding) from time to time
by action of the Board of Directors;
(2) the rate and times at which, and the terms and
conditions upon which, dividends, if any, on shares of the series shall be paid,
the extent of preferences or relation, if any, of such dividends to the
dividends payable on any other class or classes of stock of this
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corporation, or on any series of Preferred Stock or of any other class or
classes of stock of this corporation, and whether such dividends shall be
cumulative or non-cumulative;
(3) the right, if any, of the holders of shares of the
series to convert the same into, or exchange the same for, shares of any other
class or classes of stock of this corporation, or of any series of Preferred
Stock of this corporation, and the terms and conditions of such conversion or
exchange;
(4) whether shares of the series shall be subject to
redemption, and the redemption price or prices including, without limitation, a
redemption price or prices payable in shares of the Common Stock and the time or
times at which, and the terms and conditions upon which, shares of the series
may be redeemed;
(5) the rights, if any, of the holders of shares of the
series upon voluntary or involuntary liquidation, merger, consolidation,
distribution or sale of assets, dissolution or winding up of this corporation;
(6) the terms of the sinking fund or redemption or
purchase account, if any, to be provided for shares of the series; and
(7) the voting powers, if any, of the holders of shares
of the series which may, without limiting the generality of the foregoing,
include (i) the right to more or less than one vote per share on any or all
matters voted upon by the stockholders and (ii) the right to vote, as a series
by itself or together with other series of Preferred Stock or together with all
series of Preferred Stock as a class, upon such matters, under such
circumstances and upon such conditions as the Board of Directors may fix,
including, without limitation, the right, voting as a series by itself or
together with other series of Preferred Stock or together with all series of
Preferred Stock as a class, to elect one or more directors of this corporation,
or to elect a majority of the members of the Board, under such circumstances and
upon such conditions as the Board may determine.
(D) Common Stock.
(1) After the requirements with respect to preferential
dividends on Preferred Stock (fixed in accordance with provisions of this
Article THIRD), if any, shall have been met and after this corporation shall
have complied with all the requirements, if any, with respect to the setting
aside of sums as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of paragraph (C) of this Article THIRD) and
subject further to any other conditions which may be fixed in accordance with
the provisions of paragraph (C) of this Article THIRD, then but not otherwise,
the holders of Common Stock shall be entitled to receive such dividends, if any,
as may be declared from time to time by the Board of Directors.
(2) After distribution in full of the preferential amount
(fixed in accordance with the provisions of paragraph (C) of this Article
THIRD), if any, to be distributed to
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the holders of Preferred Stock in the event of voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or winding-up of this
corporation, the holders of the Common Stock shall be entitled to receive all
the remaining assets of this corporation, tangible and intangible, of whatever
kind available for distribution to stockholders, ratably in proportion to the
number of shares of the Common Stock held by each.
(3) Except as otherwise be required by law, this
Certificate of Incorporation or the provisions of the resolution or resolutions
as may be adopted by the Board of Directors pursuant to this Article THIRD, each
holder of Common Stock shall have one vote in respect of each share of Common
Stock held by such holder on each matter voted upon by the stockholders.
FOURTH: Other Provisions Relating to Preferred and Common Stock.
(1) The relative powers, preferences and rights of each
series of Preferred Stock in relation to the powers, preferences and rights of
each other series of Preferred Stock shall, in each case, be as fixed from time
to time by the Board of Directors in the resolution or resolutions adopted
pursuant to authority granted in this Article THIRD, and the consent, by class
or series vote or otherwise, of the holders of the Preferred Stock of such of
the series of the Preferred Stock as are from time to time outstanding shall not
be required for the issuance by the Board of Directors of any other series of
Preferred Stock whether the powers, preferences and rights of such other series
shall be fixed by the Board of Directors as senior to, or on a parity with, the
powers, preferences and rights of such outstanding series, or any of them,
provided, however, that the Board of Directors may provide in such resolution or
resolutions adopted with respect to any series of Preferred Stock that the
consent of the holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other shares of Preferred Stock.
(2) Subject to the provisions of subparagraph (1) of this
paragraph, shares of any series of Preferred Stock may be issued from time to
time as the Board of Directors shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(3) Shares of the Common Stock may be issued from time to
time as the Board of Directors shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(4) No holder of any of the shares of any class or series
of stock or of options, warrants or other rights to purchase shares of any class
or series of stock or of other securities of the corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any class or
series or any additional shares of any class or series to be issued by reason of
any increase of the authorized capital stock of the corporation of any class or
series, or bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of the corporation of any class or
series, or carrying any right to purchase stock of any class
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or series.
FIFTH: The address of the Corporation's registered office is
820 Bear Tavern Road, West Trenton, New Jersey 08628, and the name of its
current registered agent at such address is Corporation Trust Company.
SIXTH: The following provisions are inserted for the
management of the business and for the conduct of the affairs of the
Corporation, and for further definition, limitation and regulation of the powers
of the Corporation and of its directors and stockholders.
(1) The number of directors of the Corporation shall be such as
from time to time shall be fixed by, or in the manner provided in the
by-laws but shall not be less than three. The directors shall be divided
into three classes, designated Class 1, Class 2 and Class 3. Each class
shall consist, as nearly as may be possible, of one-third of the total
number of directors constituting the entire Board of Directors, but in no
event shall any class include less than one director. At each succeeding
annual meeting of shareholders beginning at the 2000 annual meeting,
successors to the class of directors whose term expires at the annual
meeting shall be elected for a three-year term. A director shall hold
office until the annual meeting for the year in which his term expires and
until his successor shall be elected and shall qualify. If the number of
directors is changed, any increase or decrease shall be apportioned among
the classes so as to maintain the number of directors in each class as
nearly equal as possible.
(2) Newly created directorship resulting from any increase in the
authorized number of directors constituting the entire Board of Directors
or vacancies on the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or any other cause shall
be filled only by the affirmative vote of a majority of the remaining
directors then in office, even if less than a quorum, or by the sole
remaining director. Directors elected to fill vacancies shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred and until such director's successor shall be elected and
shall qualify. The directors of any class of directors of the Corporation
may be removed by the shareholders only for cause by the affirmative vote
of the holders of at least 66 2/3% of the combined voting power of all
outstanding voting stock. For the purpose of this Article SIXTH, "cause"
shall mean the willful failure of a director to perform in any substantial
respect such director's duties to the Corporation, willful malfeasance by a
director in the performance of his duties to the Corporation which is
materially and demonstrably injurious to the Corporation, the commission by
a director of an act of fraud in the performance of his duties, the
conviction of a director for a felony punishable by confinement for a
period of excess of one year, or the ineligibility of a director for
continuation in office under any applicable rules, regulations or orders of
any federal or state regulatory authority.
(3) Notwithstanding the foregoing, whenever the holders of any
one or more classes or series of preferred stock or preference shares
issued by the Corporation shall have
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the right to vote separately by class or series to elect directors at an
annual or special meeting of shareholders, the election, term of office,
filling of vacancies and other features of such directorships shall be
governed by the terms of this Certificate of Incorporation applicable
thereto, and such directors so elected shall not be divided into classes
pursuant to this Article SIXTH unless expressly provided by such terms.
(4) Where the term "Board of Directors" is used in this
Certificate of Incorporation, such term shall mean the Board of Directors
of the Corporation; provided, however, that to the extent any committee of
directors of the Corporation is lawfully entitled to exercise the powers of
the Board of Directors, such committee may exercise any right or authority
of the Board of Directors under this Certificate of Incorporation.
(5) Notwithstanding any other provisions of this Certificate of
Incorporation or the By-Laws of this Corporation (and notwithstanding the
fact that a lesser percentage or separate class vote may be specified by
law, this Certificate of Incorporation, the By-Laws of the Corporation or
otherwise), the affirmative vote of the holders of at least 66 2/3% of the
combined voting power of all outstanding voting stock shall be required to
adopt any provisions inconsistent with, or to amend or repeal, Paragraph 2,
3, 4 or 5 of this Article SIXTH.
SEVENTH: To the fullest extent permitted by the New Jersey
Business Corporations Act as the same exists or may hereafter be amended, no
director or officer of this Corporation shall be personally liable to the
Corporation or its shareholders for damages for breach of any duty owed to the
Corporation or its shareholders except that no director or officer shall be
relieved from liability for an breach of duty based upon any act or omission (a)
in breach of such person's duty of loyalty to the Corporation or its
shareholders, (b) not in good faith or involving a knowing violation of law or
(c) resulting in receipt by such person of any improper personal benefit.
EIGHTH: The name and address of the incorporator is as follows:
NAME ADDRESS
Sheldon Kass 1633 McKinley Avenue
North Brunswick, New Jersey
FIFTH: The amendments effected herein and the Restated Certificate of
Incorporation was duly adopted by the affirmative vote of a majority of votes
cast by the holders of shares entitled to vote thereon, pursuant to the Business
Corporation Law of the State of New Jersey.
IN WITNESS WHEREOF, we hereunto sign our names and affirm that the
statements made herein are true under penalties of perjury this __th day of
April, 2000.
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Donald W. Kappauf, President
ATTEST:
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Donald T. Kelly, Secretary
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TEAMSTAFF, INC.
(FORMERLY DIGITAL SOLUTIONS, INC.)
Special Meeting of Shareholders - May 18, 2000
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Karl W. Dieckmann and Donald W. Kappauf, and
each of them, proxies, with full power of substitution, to vote all shares of
common stock of TeamStaff, Inc owned by the undersigned at the Special Meeting
of Shareholders of TeamStaff, Inc. to be held on May 18, 2000 and at any
adjournments thereof, hereby revoking any proxy heretofore given. The
undersigned instructs such proxies to vote:
I. Proposal to Amend and Restate the Certificate of Incorporation of the
Corporation to effect a reverse split of its Common Stock on a 1:3.5 basis.
\ \ For \ \ Against \ \ Abstain
and to vote upon any other business as may properly become before the meeting or
any adjournment thereof, all as described in the proxy statement dated April 18,
2000, receipt of which is hereby acknowledged.
Either of the proxies or their respective substitutes who shall be present and
acting shall have and may exercise all the powers hereby granted. The shares
represented by this proxy will be voted FOR the Reverse Stock Split unless
contrary instructions are given. Said proxies will use their discretion with
respect to any other matters which properly come before the meeting.
Date
--------------------------------------------------
Signed
------------------------------------------------
(Please date and sign exactly as accounts. Each
joint owner should sign. Executors, administrators,
trustees, etc. should also so indicate when
signing.)
The proxy is solicited on behalf of the Board of
Directors. Please sign and return in the enclosed
envelope.
