SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No.__)
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 Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-12
GraphOn Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box)
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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|_| 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.
6. Amount Previously Paid:
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7. Form, Schedule or Registration Statement No.:
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8. Filing Party:
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9. Date Filed:
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GRAPHON CORPORATION
3130 Winkle Avenue
Santa Cruz, California 95065
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On March 29, 2005
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders of
GraphOn Corporation, a Delaware corporation ("GraphOn"). The meeting will be
held on Tuesday, March 29, 2005 at 10:00 a.m., local time, at The Scottsdale
Marriott, 1670 N. Perimeter Drive, Scottsdale, Arizona 85260 for the purpose of
considering and approving an amendment to GraphOn's Certificate of Incorporation
to increase the authorized number of shares of common stock from 45,000,000 to
195,000,000 shares, as well as conducting any other business that may properly
come before the meeting or any adjournment thereof.
This item of business is more fully described in the Proxy Statement
accompanying this Notice.
The record date for the Special Meeting is February 22, 2005. Only
stockholders of record at the close of business on that date may vote at the
meeting or any adjournment thereof.
By Order of the Board of Directors
/s/ WILLIAM SWAIN
William Swain, Secretary
Santa Cruz, California
February 24, 2005
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You are cordially invited to attend the meeting in person. Whether or not you
expect to attend the meeting, please complete, date, sign and return the
enclosed proxy as promptly as possible in order to ensure your representation at
the meeting. A return envelope (which is postage prepaid if mailed in the United
States) is enclosed for your convenience. Even if you have voted by proxy, you
may still vote in person if you attend the meeting. Please note, however, that
if your shares are held of record by a broker, bank or other nominee and you
wish to vote at the meeting, you must obtain a proxy issued in your name from
that record holder.
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GRAPHON CORPORATION
3130 Winkle Avenue
Santa Cruz, California 95065
PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
March 29, 2005
QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Why am I receiving these materials?
We sent you this proxy statement and the enclosed proxy card because the
Board of Directors of GraphOn Corporation ("GraphOn") is soliciting your proxy
to vote at the Special Meeting of Stockholders. You are invited to attend the
special meeting to vote on the proposal described in this proxy statement.
However, you do not need to attend the meeting to vote your shares. Instead, you
may simply complete, sign and return the enclosed proxy card.
We intend to mail this proxy statement and accompanying proxy card on or
about February 24, 2005 to all stockholders of record entitled to vote at the
special meeting.
Who can vote at the special meeting?
Only stockholders of record at the close of business on February 22, 2005
will be entitled to vote at the special meeting. On this record date, there were
31,330,299 shares of common stock and 148,148 shares of Series A preferred
stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If on February 22, 2005, your shares were registered directly in your name
with our transfer agent, American Stock Transfer and Trust Company, then you are
a stockholder of record. As a stockholder of record, you may vote in person at
the meeting or vote by proxy. Whether or not you plan to attend the meeting, we
urge you to fill out and return the enclosed proxy card to ensure your vote is
counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If on February 22, 2005, your shares were not registered in your name, but
rather in an account at a brokerage firm, bank, dealer or other similar
organization, then you are the beneficial owner of shares held in "street name"
and these proxy materials are being forwarded to you by that organization. The
organization holding your account is considered to be the stockholder of record
for purposes of voting at the special meeting. As a beneficial owner, you have
the right to direct your broker or other agent on how to vote the shares in your
account. You are also invited to attend the special meeting. However, since you
are not the stockholder of record, you may not vote your shares in person at the
meeting unless you request and obtain a valid proxy from your broker or other
agent.
What am I voting on?
There is only one matter scheduled for a vote: the approval of a proposed
amendment to our Certificate of Incorporation to increase the authorized number
of shares of common stock from 45,000,000 to 195,000,000 shares.
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How do I vote?
For each matter to be voted on, you may vote "For," "Against" or "Abstain"
from voting. The procedures for voting are fairly simple:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote in person at the special
meeting or vote by proxy using the enclosed proxy card. Whether or not you plan
to attend the meeting, we urge you to vote by proxy to ensure your vote is
counted. You may still attend the meeting and vote in person if you have already
voted by proxy.
>> To vote in person, come to the special meeting and we will give you a ballot
when you arrive.
>> To vote using the proxy card, simply complete, sign and date the enclosed
proxy card and return it promptly in the envelope provided. If you return
your signed proxy card to us before the annual meeting, we will vote your
shares as you direct.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares registered in the name of your
broker, bank or other agent, you should have received a proxy card and voting
instructions with these proxy materials from that organization rather than from
us. Simply complete and mail the proxy card to ensure that your vote is counted.
Alternatively, you may vote by telephone or over the Internet as instructed by
your broker or bank, if these options are offered by your broker or bank. To
vote in person at the special meeting, you must obtain a valid proxy from your
broker, bank or other agent. Follow the instructions from your broker or bank
included with these proxy materials or contact your broker or bank to request a
proxy form.
How many votes do I have?
You have one vote for each share of common stock you own as of February
22, 2005 and one thousand votes for each share of Series A preferred stock you
own as of February 22, 2005. For any other matter, you have one hundred votes
for each share of Series A preferred stock you own as of February 22, 2005.
What if I return a proxy card but do not make a specific choice?
If you return a signed and dated proxy card without marking any voting
selection, your shares will be voted "For" the amendment of our Certificate of
Incorporation. If any other matter is properly presented at the meeting, your
proxy (one of the individuals named on your proxy card) will vote your shares
using his or her best judgment.
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In addition to
these mailed proxy materials, our directors and employees may also solicit
proxies in person, by telephone or by other means of communication. Directors
and employees will not be paid any additional compensation for soliciting
proxies. We may also reimburse brokerage firms, banks and other agents for the
cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one proxy card?
If you receive more than one proxy card, your shares are registered in
more than one name or are registered in different accounts. Please complete,
sign and return each proxy card to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at the
meeting. If you are the record holder of your shares, you may revoke your proxy
in any one of three ways:
>> You may submit another properly completed proxy card with a later date.
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>> You may send a written notice that you are revoking your proxy to GraphOn's
Secretary at 3130 Winkle Avenue, Santa Cruz, California, 95065.
>> You may attend the special meeting and vote in person. Simply attending the
meeting will not, by itself, revoke your proxy.
If your shares are held by your broker or bank as a nominee or agent, you should
follow the instructions provided by your broker or bank.
When are stockholder proposals due for next year's annual meeting?
To be considered for inclusion in next year's proxy materials, your
proposal must be submitted in writing to William Swain, our Secretary, at our
address, by July 27, 2005. If you wish to submit a proposal that is not to be
included in next year's proxy materials or nominate a director, you must do so
by notifying our Secretary not fewer than 120 days prior to next year's annual
meeting. You are also advised to review our Bylaws, which contain additional
requirements about advance notice of stockholder proposals and director
nominations.
How are votes counted?
Votes will be counted by the inspector of election appointed for the
meeting, who will separately count "For," "Against" and "Abstain" votes and
broker non-votes. Abstentions and broker non-votes will be counted towards the
vote total for the proposal and will have the same effect as "Against" votes.
If your shares are held by your broker as your nominee (that is, in
"street name"), you will need to obtain a proxy form from the institution that
holds your shares and follow the instructions included on that form regarding
how to instruct your broker to vote your shares. If you do not give instructions
to your broker, your broker cannot vote your shares at the special meeting in
the absence of your voting instructions.
How many votes are needed to approve the proposal?
To be approved, the proposal to amend our Certificate of Incorporation to
increase the authorized number of shares of common stock from 45,000,000 to
195,000,000 shares, must receive a "For" vote from the majority of the voting
power of the outstanding shares either in person or by proxy. If you do not
vote, or "Abstain" from voting, it will have the same effect as an "Against"
vote. Broker non-votes will have the same effect as "Against" votes. In
connection with the private placement, Robert Dilworth, our Chairman and Chief
Executive Officer, William Swain, our Chief Financial Officer, and each member
of our board of directors has agreed to vote all shares of our capital stock
that he holds and that are eligible to be voted at the special meeting in favor
of the approval of the amendment to our Certificate of Incorporation set forth
in Proposal 1. As of February 2, 2005, the signatories to this voting agreement
held an aggregate of 327,780 shares of our common stock.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum
will be present if a majority of the voting power of the outstanding shares are
represented by stockholders present at the meeting in person or by proxy. On the
record date, there were 31,330,299 shares of common stock and 148,148 shares
of Series A preferred stock outstanding and entitled to vote.
Your shares will be counted towards a quorum only if you submit a valid
proxy (or one is submitted on your behalf by your broker, bank or other nominee)
or if you vote in person at the meeting. Abstentions and broker non-votes will
be counted towards the quorum requirement. If there is no quorum, a majority of
the votes present at the meeting may adjourn the meeting to another date.
How can I find out the results of the voting at the special meeting?
Preliminary voting results will be announced at the special meeting. Final
voting results will be published in our quarterly report on Form 10-Q for the
first quarter of 2005.
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PROPOSAL 1
APPROVAL OF INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors is requesting stockholder approval of an amendment
to our Restated Certificate of Incorporation to increase our authorized number
of shares of common stock from 45,000,000 shares to 195,000,000 shares.
The additional common stock to be authorized by adoption of the amendment
would have rights identical our currently outstanding common stock. Adoption of
the proposed amendment would not affect the rights of the holders of our
currently outstanding common stock, except for effects incidental to increasing
the number of shares of our common stock outstanding, such as dilution of the
earnings per share and voting rights of current holders of common stock. If the
amendment is adopted, it will become effective upon the acceptance for filing of
a Certificate of Amendment of our Restated Certificate of Incorporation by the
Secretary of State of the State of Delaware.
In February 2005, we issued and sold to certain individuals and entities,
in a private placement, 148,148 shares of Series A preferred stock at a price
per share of $27.00, warrants to acquire 14,815 shares of Series A preferred
stock at an exercise price of $27.00 per share, exercisable for five years, and
warrants to acquire 81,477 shares of Series B preferred stock at an exercise
price of $40.00 per share, exercisable for five years. Upon the effectiveness of
the Certificate of Amendment submitted at the Special Meeting for stockholder
approval, each share of Series A preferred stock will automatically convert into
100 shares of our common stock and each warrant will automatically convert into
a warrant to purchase that number of shares of common stock equal to the number
of shares of preferred stock subject to the warrant multiplied by 100. As a
result, of the 150,000,000 additional shares of common stock proposed to be
authorized, upon the effectiveness of the Certificate of Amendment,
approximately 14,814,800 will be issued to the holders of outstanding shares of
Series A preferred stock upon the automatic conversion of such shares. In
addition, upon the effectiveness of the Certificate of Amendment, all
outstanding warrants to purchase shares of Series A preferred stock and Series B
preferred stock will be converted into warrants to purchase shares of common
stock. Approximately 9,629,000 of the newly authorized shares will be reserved
for issuance upon the exercise of such common stock warrants.
If the Certificate of Amendment is not effective before July 1, 2005, the
holders of Series A preferred stock and Series B preferred stock will be
entitled to a 10% annual cumulative dividend that begins to accrue on such date.
In addition, one of our agreements with the private placement investors provides
that if we fail to use our best efforts to cause the Special Meeting of
Stockholders to take place within 90 days after the closing of the private
placement, we shall pay to the investors in the private placement a cash penalty
equal to 25% of the aggregate amount invested by each investor in the private
placement. If the meeting occurs as currently scheduled, no such penalty would
be payable.
In connection with the private placement, Messrs. Dilworth and Swain, as
well as each member of our board of directors, have agreed to vote all shares of
our capital stock that they hold and that are eligible to be voted at the
special meeting in favor of the approval of the amendment to our Certificate of
Incorporation set forth in this Proposal 1. As of February 2, 2005, the
signatories to this voting agreement held an aggregate of 327,780 shares of our
common stock.
In addition to the 31,330,299 shares of common stock outstanding on
February 22, 2005, the Board has reserved 6,042,900 shares for issuance upon
exercise of options, including options granted or to be granted under GraphOn's
stock option and stock purchase plans, and up to approximately 13,305,689
shares of common stock that may be issued upon exercise of warrants to purchase
our common stock.
Although at present our board of directors has no other plans to issue the
newly authorized shares of common stock, it desires to have the shares available
to provide additional flexibility to use its capital stock for business and
financial purposes in the future. The additional shares may be used for various
purposes without further stockholder approval. These purposes may include:
raising capital; providing equity incentives to employees, officers or
directors; establishing strategic relationships with other companies; expanding
our business or product lines through the acquisition of other businesses or
products; and other purposes.
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The additional shares of common stock that would become available for
issuance if the proposal is adopted could also be used by us to oppose a hostile
takeover attempt or to delay or prevent changes in control or management. For
example, without further stockholder approval, our board of directors could
adopt a "poison pill" that would, under certain circumstances related to an
acquisition of shares not approved by our board of directors, give certain
holders the right to acquire additional shares of common stock at a low price,
or our board of directors could strategically sell shares of common stock in a
private transaction to purchasers who would oppose a takeover or favor our
current board of directors. Although this proposal to increase the authorized
common stock has been prompted by business and financial considerations and not
by the threat of any hostile takeover attempt (nor is our board of directors
currently aware of any such attempts directed at us), nevertheless, stockholders
should be aware that approval of this proposal could facilitate future efforts
by us to deter or prevent changes in control, including transactions in which
our stockholders might otherwise receive a premium for their shares over then
current market prices.
The affirmative vote of the holders of a majority of the voting power of
the outstanding shares of common stock and preferred stock, voting together as a
single class, will be required to approve this amendment to our Restated
Certificate of Incorporation. As a result, abstentions and broker non-votes will
have the same effect as negative votes. With respect to the vote on this
Proposal 1, holders of Series A preferred stock will have one thousand votes for
each share of Series A preferred stock owned on the record date.
OUR BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 1.
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PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as of February 3, 2005,
with respect to the beneficial ownership of shares of our common stock or
preferred stock held by: (i) each director; (ii) each person known by us to
beneficially own 5% or more of our common stock or preferred stock; (iii) each
executive officer named in the Summary Compensation Table contained in the proxy
statement for GraphOn's 2004 Annual Meeting of Stockholders; and (iv) all
directors and executive officers as a group. Unless otherwise indicated, the
address for each stockholder is c/o GraphOn Corporation, 3130 Winkle Avenue,
Santa Cruz, California 95065.
Beneficial Ownership
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Common Stock
Common Stock Preferred Stock Post-Conversion(2)
------------------------ ------------------------ ---------------------
Shares Shares
Name and Address of Beneficially Percent of Beneficially Percent of
Beneficial Owner Owned (1) Class (%) Owned (1) Class (%) Percent of Class (%)
- ------------------------ ------------ ---------- ------------ ---------- --------------------
Orin Hirschman (3)...... 4,565,217 13.90 45,552 27.89 18.54
6006 Berkeley Avenue
Baltimore, MD 21209
Robert Dilworth (4)..... 693,820 2.17 - - 1.48
August P. Klein (5)..... 445,760 1.41 - - *
Michael Volker (6)...... 366,200 1.16 - - *
Gordon Watson (7)....... 280,000 * - - *
Ralph Wesinger (8)...... 4,830,207 15.41 - - 10.47
Crystal Bay Capital,LLC (9) 1,847,262 5.90 - - 4.00
60 Prospect Street
Woodside, CA 94062
IDT Capital, Inc. (10).. - - 55,555 33.33 11.57
520 Broad Street
Newark, NJ 07102
Ganot Corporation (11). - - 8,334 5.52 1.80
4000 Hollywood Blvd. #530
N Hollywood, FL 33021
Mazel D&K (12).......... - - 11,110 7.31 2.39
3666 Shannon Rd
Cleveland Hts., OH 44118
Hershel P. Berkowitz(13) 978,261 3.09 10,000 6.60 4.23
441 Yeshiva Lane, Apt. 1A
Baltimore, MD 21208
Jack M. Dodick (14)..... - - 8,845 5.85 1.90
535 Park Avenue
New York, NY 10021
Paul Packer (15)........ 1,043,478 3.29 27,778 17.65 8.06
60 Broad Street, 38th Floor
New York, NY 10004
Globis Capital Partners (15) 717,391 2.27 16,666 10.84 5.08
60 Broad Street, 38th Floor
New York, NY 10004
Anfel Trading Limited (16) - - 19,443 12.57 4.16
P.O. Box 3236
Ramat-Gan 52131, Israel
Griffin Securities Inc. (17) 93,750 * 22,222 14.29 5.14
17 State Street
New York, NY 10004
Cam Co (18)............. - - 13,888 9.09 2.98
466 Arbuckle Avenue
Cedarhurst, NY 11516
All current executive 2,382,780 7.14 - - 4.94
officers and directors
as a group (5 persons)(19)
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<FN>
* Denotes less than 1%.
</FN>
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(1) As used in this table, beneficial ownership means the sole or shared power
to vote, or direct the voting of, a security, or the sole or shared power
to invest or dispose, or direct the investment or disposition, of a
security. Except as otherwise indicated, based on information provided by
the named individuals, all persons named herein have sole voting power and
investment power with respect to their respective shares of our common
stock, except to the extent that authority is shared by spouses under
applicable law, and record and beneficial ownership with respect to their
respective shares of our common stock. With respect to each stockholder,
any shares issuable upon exercise of all options and warrants held by such
stockholder that are currently exercisable or will become exercisable
within 60 days of February 3, 2005 are deemed outstanding for computing
the percentage of the person holding such options, but are not deemed
outstanding for computing the percentage of any other person. Percentage
ownership of our common stock is based on 31,332,247 shares of common
stock outstanding as of February 3, 2005. Percentage ownership of our
preferred stock is based on 148,148 shares of our Series A preferred stock
outstanding as of February 3, 2005. Upon the effectiveness of the
Certificate of Amendment that is the subject of Proposal 1, each share of
our Series A preferred stock will be converted into 100 shares of our
common stock and each warrant that is exercisable for shares of our Series
A or Series B preferred stock will be converted into a warrant exercisable
for that number of shares of our common stock equal to the number of
shares of Series A or Series B preferred stock subject to the warrant
multiplied by 100. The effects of the conversion of our preferred stock
into common stock are reflected in the "Common Stock Post-Conversion"
column of this table, but are not reflected in the "Common Stock" columns
of this table.
(2) Assumes the conversion of each share of our Series A preferred stock into
100 shares of our common stock and the conversion of each warrant that is
exercisable for shares of our Series A or Series B preferred stock into a
warrant exercisable for that number of shares of our common stock equal to
the number of shares of Series A or Series B preferred stock subject to
the warrant multiplied by 100. Percentage is based on 46,147,047 shares of
common stock outstanding post-conversion.
(3) Based on information contained in a Schedule 13D/A filed by Orin Hirschman
on February 17, 2005. Includes 1,521,739 shares of common stock issuable
upon the exercise of outstanding warrants. Also includes 30,368 shares of
Series A preferred stock held by AIGH Investment Partners, LLC ("AIGH")
and 15,184 shares of Series B preferred stock upon the exercise of a
warrant held by AIGH. Mr. Hirschman is the managing member of AIGH and has
sole voting and dispositive power with respect to the shares held by AIGH.
(4) Includes 640,000 shares of common stock issuable upon the exercise of
outstanding options.
(5) Includes 295,000 shares of common stock issuable upon the exercise of
outstanding options.
(6) Includes 260,000 shares of common stock issuable upon the exercise of
outstanding options.
(7) Includes 280,000 shares of common stock issuable upon the exercise of
outstanding options.
(8) Based on information contained in a Schedule 13G filed by Mr. Wesinger
on February 10, 2005. Includes 1,569,816 shares held in escrow pursuant
to the terms of an escrow agreement (the "NES Escrow Agreement") entered
into in connection with the acquisition by GraphOn of Network
Engineering Systems, Inc. ("NES"). For the duration of the escrow, Mr.
Wesinger has the right to vote, but not to dispose of, such shares.
Does not included 1,000,000 of common stock issuable upon the exercise
of an option, which is not exercisable within 60 days of February 3,
2005.
(9) Includes 185,625 shares held in escrow pursuant to the terms of the NES
Escrow Agreement. Nicholas Sprinkel is the managing member of Crystal Bay
Capital, LLC ("CBC") and has sole voting and dispositive power with
respect to the shares held by CBC. For the duration of the escrow, Mr.
Sprinkel has the right to vote, but not to dispose of, such shares.
(10) Based in part on information contained in a Schedule 13D filed by IDT
Capital, Inc. on February 15, 2005. Includes 18,518 shares of Series B
preferred stock issuable upon the exercise of a warrant. Howard Jonas
exercises sole voting and dispositive power with respect to the listed
shares.
(11) Includes 2,778 shares of Series B preferred stock issuable upon the
exercise of a warrant. Sisel Klurman exercises sole voting and dispositive
power with respect to the listed shares.
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(12) Includes 3,703 shares of Series B preferred stock issuable upon the
exercise of a warrant. Reuven Dessler and Jack Koval exercise shared
voting and dispositive power with respect to the listed shares.
(13) Based in part on information contained in a Schedule 13G/A filed by Mr.
Berkowitz on February 17, 2005.Includes 326,087 shares of common stock
issuable upon the exercise of a warrant and 3,333 shares of Series B
preferred stock issuable upon the exercise of a warrant.
(14) Includes 2,948 shares of Series B preferred stock issuable upon the
exercise of a warrant.
(15) Mr. Packer is the Managing Member of Globis Capital Partners ("Globis")
and is the Managing Member of the general partner of the manager of Globis
Overseas Fund, Ltd. ("Globis Overseas"). Mr. Packer exercises sole voting
and dispositive power with respect to the shares beneficially owned by
Globis and Globis Overseas. Mr. Packer's beneficial ownership figures
include 5,555 shares of Series B preferred stock issuable upon the
exercise of a warrant held by Globis, 1,852 shares of Series B preferred
stock issuable upon the exercise of a warrant held by Globis Overseas,
11,111 shares of Series A preferred stock held by Globis and 3,704 shares
of Series A preferred stock held by Globis Overseas.
(16) Includes 12,962 shares of Series B preferred stock issuable upon the
exercise of a warrant. Tzvi Levy exercises sole voting and dispositive
power with respect to the listed shares.
(17) Includes 187,500 shares of common stock issuable upon the exercise of
warrants, 14,815 shares of Series A preferred stock issuable upon the
exercise of warrants and 7,407 shares of Series B preferred stock issuable
upon the exercise of warrants. Mr. Adrian Stecyk, the Chief Executive
Officer of Griffin Securities, exercises voting and investment power over
the shares held by this entity. Mr. Stecyk disclaims beneficial ownership
of the shares, except to the extent of his pecuniary interest therein.
(18) Includes 4,629 shares of Series B preferred stock issuable upon the
exercise of a warrant. Charles Alpert exercises sole voting and
dispositive power with respect to the listed shares.
(19) Includes 2,055,000 shares of common stock issuable upon the exercise of
outstanding options.
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HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries (e.g.,
brokers) to satisfy the delivery requirements for proxy statements and annual
reports with respect to two or more stockholders sharing the same address by
delivering a single proxy statement addressed to those stockholders. This
process, which is commonly referred to as "householding," potentially means
extra convenience for stockholders and cost savings for companies.
This year, a number of brokers with account holders who are GraphOn
stockholders will be "householding" our proxy materials. A single proxy
statement will be delivered to multiple stockholders sharing an address unless
contrary instructions have been received from the affected stockholders. Once
you have received notice from your broker that they will be "householding"
communications to your address, "householding" will continue until you are
notified otherwise or until you revoke your consent. If, at any time, you no
longer wish to participate in "householding" and would prefer to receive a
separate proxy statement and annual report, please notify your broker, direct
your written request to William Swain, our Secretary, at our address or contact
William Swain at (800) 472-7466. Stockholders who currently receive multiple
copies of the proxy statement at their address and would like to request
"householding" of their communications should contact their broker.
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OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/S/ WILLIAM SWAIN
William Swain, Secretary
February 24, 2005
PROXY
GRAPHON CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCHOLDERS
TO BE HELD ON MARCH 29, 2005
The undersigned hereby appoints Robert Dilworth and William Swain, and
each of them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all shares of stock of GraphOn Corporation that the
undersigned may be entitled to vote at the Special Meeting of Stockholders of
GraphOn Corporation to be held at 3130 Winkle Avenue, Santa Cruz, California on
Tuesday, March 29, 2005 at 9:00 a.m. local time, and at any and all
postponements, continuations and adjournments thereof, with all powers that the
undersigned would possess if personally present, upon and in respect of the
following matters and in accordance with the following instructions, with
discretionary authority as to any and all other matters that may properly come
before the meeting.
[X] Please mark votes as in this example.
MANAGEMENT RECOMMENDS A VOTE "FOR" PROPOSAL 1.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR PROPOSAL
1, AS MORE SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC
INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
FOR AGAINST ABSTAIN
1. To approve an amendment to GraphOn's Certificate [ ] [ ] [ ]
of Incorporation to increase the authorized number
of shares of common stock from 45,000,000
to 195,000,000 shares.
Please vote, date and promptly return
this proxy in the enclosed return
envelope which is postage prepaid if
mailed in the United States.
Please sign exactly as your name appears
hereon. If stock is registered in the
names of two or more persons, each should
sign. Executors, administrators,
trustees, guardians and attorneys-in-fact
should add their titles. If signer is a
corporation, please give full corporate
name and have a duly authorized officer
sign, stating that if signer is a
partnership, please sign in partnership
name by authorized person.
Signature: Date:
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Signature: Date:
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