SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by 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 Rule 14a-11(c) or Rule 14a-12
INTELIDATA TECHNOLOGIES CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
( ) Fee paid previously with preliminary materials:
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously.
(1) Amount Previously Paid:
(2) Form, Schedule, or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
April 24, 2000
Dear Stockholder:
We cordially invite you to attend the Annual Meeting of Stockholders of
InteliData Technologies Corporation to be held on Wednesday, May 24, 2000 at
9:00 a.m. in the Main Conference Room, lobby level, located at 11600 Sunrise
Valley Drive, Reston, VA 20191. Enclosed are a proxy statement and a form of
proxy.
At this meeting we will ask the Stockholders: (i) to elect two Class I
Directors; (ii) to approve an amendment to the Company's 1996 Incentive Plan
reserving an additional 1,000,000 shares of the Company's Common Stock for
issuance thereunder and increasing the maximum aggregate number of shares that
may be issued as Stock Awards to 500,000 shares; and (iii) to ratify the
selection of Deloitte & Touche LLP as the Company's independent auditors for the
year ending December 31, 2000.
We value your participation by voting your shares on matters that come
before the meeting. Please follow the instructions on the enclosed proxy to
ensure representation of your shares at the meeting.
Sincerely,
William F. Gorog
Chairman of the Board
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 2000
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of InteliData Technologies Corporation
(the "Company") will be held on Wednesday, May 24, 2000 in the Main Conference
Room, lobby level, 11600 Sunrise Valley Drive, Reston, Virginia 20191 at 9:00
a.m. local time, for the following purposes:
1. To elect two Class I members of the Board of Directors (Proposal 1);
2. To approve an amendment to the Company's 1996 Incentive Plan reserving an
additional 1,000,000 shares of the Company's Common Stock for issuance
thereunder and increasing the maximum aggregate number of shares that may
be issued as Stock Awards to 500,000 shares (Proposal 2);
3. To ratify the selection of Deloitte & Touche LLP as independent auditors
for the Company for the year ending December 31, 2000 (Proposal 3); and
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Only holders of record of the Company's Common Stock at the close of
business on April 12, 2000, the record date fixed by the Company's Board of
Directors, are entitled to notice of and to vote at the Annual Meeting. By Order
of the Board of Directors,
Albert N. Wergley
Vice President and Secretary
Reston, Virginia
April 24, 2000
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE. YOU MAY, IF YOU
WISH, REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED.
<PAGE>
INTELIDATA TECHNOLOGIES CORPORATION
11600 Sunrise Valley Drive, Suite 100
Reston, Virginia 20191
PROXY STATEMENT
For the Annual Meeting of Stockholders
to be held May 24, 2000
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished to stockholders in connection with the
solicitation by the Board of Directors of InteliData Technologies Corporation
("InteliData" or the "Company") of proxies in the accompanying form for use at
the Annual Meeting of Stockholders of the Company to be held at the Main
Conference Room, lobby level, 11600 Sunrise Valley Drive, Reston, Virginia
20191, at 9:00 a.m. on Wednesday, May 24, 2000, and at any adjournment thereof.
If a proxy in the accompanying form is duly executed and returned, the shares
represented thereby will be voted at the Annual Meeting and, where a choice is
specified, will be voted in accordance with the specification made. Any
stockholder who gives a proxy may revoke it at any time before it is exercised
by giving a later proxy, by attending the meeting and voting in person, or by
giving notice of revocation to the Company's Secretary.
The Annual Meeting has been called for the following purposes: (1) to elect
two Class I members of the Board of Directors; (2) to approve an amendment to
the Company's 1996 Incentive Plan reserving an additional 1,000,000 shares of
the Company's Common Stock for issuance thereunder and increasing the maximum
aggregate number of shares that may be issued as Stock Awards to 500,000 shares;
(3) to ratify the selection of Deloitte & Touche LLP as the Company's
independent auditors to audit the financial statements of the Company for fiscal
year 2000; and (4) to transact such other business as may properly come before
the meeting or any adjournment thereof. Only holders of record of the Company's
Common Stock at the close of business on April 12, 2000, the record date fixed
by the Company's Board of Directors, are entitled to notice of and to vote at
the Annual Meeting. This proxy statement and the attached form of proxy are
first being sent or given to stockholders on or about April 24, 2000.
If the enclosed form of proxy is properly executed and returned to the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked therein.
Executed but unmarked proxies will be voted FOR the election of the Company's
two nominees to the Board of Directors, FOR the approval of the amendment to the
Company's 1996 Incentive Plan, and FOR the ratification of Deloitte & Touche LLP
as the Company's auditors.
The Company's capital stock consists of a single class of Common Stock, par
value $0.001 per share, of which 38,307,182 shares were outstanding and entitled
to vote at the close of business on April 12, 2000.
<PAGE>
The presence, in person or by proxy, of at least a majority of the total
number of outstanding shares of Common Stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum at the Annual Meeting, but if a
quorum should not be present, the meeting may be adjourned from time to time
until a quorum is obtained. Stockholders' votes will be tabulated by persons
appointed by the Board of Directors to act as inspectors of election for the
Annual Meeting. The affirmative vote of a majority of the shares present or
represented and entitled to vote at the Meeting is required to approve each
proposal, other than the election of directors which requires a plurality of the
shares voted affirmatively or negatively at the Annual Meeting. With respect to
the tabulation of votes on any matter, abstentions have the effect of a vote
against a proposal, while broker non-votes have no effect on the vote.
A copy of the annual report to stockholders for the fiscal year ended
December 31, 1999 accompanies this Proxy Statement, but does not constitute a
part hereof. The Company is required to file an annual report on Form 10-K for
its 1999 fiscal year with the Securities and Exchange Commission ("SEC").
Stockholders may obtain, free of charge, a copy of the Form 10-K by writing:
InteliData Technologies Corporation, 11600 Sunrise Valley Drive, Suite 100,
Reston, Virginia 20191, Attention: Investor Relations.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of April 12, 2000, regarding
beneficial ownership of the Company's Common Stock by (i) each person who is
known to the Company to own beneficially more than five percent of the Company's
Common Stock, (ii) each director of the Company, (iii) each executive officer
named in the Summary Compensation Table (the "Named Executive Officers") set
forth in this Proxy Statement, and (iv) all current directors and executive
officers of the Company as a group. The information on beneficial ownership in
the table and the footnotes thereto is based upon the Company's records and the
most recent Schedule 13D or 13G filed by each such person or entity and
information supplied to the Company by such person or entity. Unless otherwise
indicated, each person has sole voting power and sole investment power with
respect to the shares shown. Under the proxy rules of the SEC, a person who
directly or indirectly has or shares voting power or investment power with
respect to a security is considered a beneficial owner of the security. Voting
power is the power to vote or to direct the voting of securities, and investment
power is the power to dispose of or to direct the disposition of securities.
Securities as to which voting power or investment power may be acquired within
60 days are also considered as beneficially owned under the proxy rules of the
SEC.
<PAGE>
OWNERSHIP OF COMMON STOCK
Beneficial Ownership
--------------------
Number of
Name of Stockholder Shares Percent
------------------- ----------- ---------
John H. Timmis
28 Hawley Road
North Salem, NY 10560 2,007,000 <F1> 5.2
William F. Gorog 907,907 <F2> 2.4
Alfred S. Dominick, Jr. 860,267 <F3> 2.2
John J. McDonnell, Jr. 60,500 <F4> *
Albert N. Wergley 53,931 <F5> *
L. William Seidman 29,500 <F6> *
Thomas W. Oxendine 29,375 <F7> *
Patrick F. Graham 24,500 <F8> *
Norman J. Tice 18,300 <F9> *
Directors and Executive Officers
as a Group (8 persons) 1,984,280 <F10> 5.1
[FN]
- ---------------
(1) As reported in the Schedule 13G/A filed with the SEC with information as of
February 16, 1999.
(2) Includes 316,666 shares of Common Stock issuable upon the exercise of
options and 35,000 shares held by Mr. Gorog's wife. Does not include 10,000
shares held by a foundation trust for which Mr. Gorog is trustee. Mr. Gorog
disclaims beneficial ownership of such shares held by his wife and by the
trust.
(3) Includes 566,667 shares of Common Stock issuable upon the exercise of
options and 1,000 shares held by Mr. Dominick's son. Mr. Dominick disclaims
beneficial ownership of shares held by his son.
(4) Includes 10,500 shares of Common Stock issuable upon the exercise of
options.
(5) Includes 29,931 shares of Common Stock issuable upon the exercise of
options.
(6) Includes 16,500 shares of Common Stock issuable upon the exercise of
options.
(7) Includes 9,375 shares of Common Stock issuable upon the exercise of
options.
(8) Includes 24,000 shares of Common Stock issuable upon the exercise of
options.
(9) Includes 4,500 shares of Common Stock issuable upon the exercise of
options.
(10) Includes 978,139 shares of Common Stock issuable upon the exercise of
options.
* Less than 1%.
</FN>
<PAGE>
ELECTION OF DIRECTORS
(Proposal 1)
The Company's Amended and Restated Certificate of Incorporation provides
that the Board of Directors be divided into three classes as nearly equal in
number as possible. The term of Class I directors expires in 2000, the term of
Class II directors expires in 2001, and the term of Class III directors expires
in 2002. The Class I Directors elected at the Annual Meeting will hold office
for a three-year term expiring in 2003, or until their successors are elected
and qualified. The other directors will continue in office for the remainder of
their terms as indicated below. The Board of Directors has recommended two
nominees for a new three-year term in Class I. No arrangement or understanding
exists with respect to the manner in which the Board, at its discretion, may
fill any remaining vacancy being created or any other vacancies that may occur
during the year. Unless authority so to vote is withheld, proxies received
pursuant to this solicitation will be voted for the election of the two nominees
named below. If any of the nominees should for any reason not be available for
election, proxies will be voted for the election of the remaining nominees and
such substitute nominees as may be designated by the Board of Directors. The
election of each nominee requires the affirmative vote of the holders of a
plurality of the shares of Common Stock cast in the election of directors.
NOMINEES FOR ELECTION AS DIRECTORS FOR TERMS EXPIRING IN 2003
William F. Gorog, age 74, has served as Chairman and director of the
Company since November 1996. Mr. Gorog had served as Chairman of US Order,
Inc.<F1> May 1990 to November 1996. From October 1987 until founding US Order in
May 1990, he served as chairman of the board of Arbor International, an
investment management firm. From 1982 to 1987, he served as president and chief
executive officer of the Magazine Publishers of America, an association
representing the principal consumer publications in the United States. During
the Ford Administration, Mr. Gorog served as deputy assistant to the President
for Economic Affairs and Executive Director of the Council on International
Economic Policy. Prior to that time, he founded and served as chief executive
officer of DataCorp., which developed the Lexis and Nexis information systems
for legal and media research and which was subsequently sold to the Mead
Corporation. From May 1993 until April 1997, Mr. Gorog was Chairman of the Board
of WorldCorp, Inc. On February 12, 1999, WorldCorp, Inc. filed a Voluntary
Petition and a proposed plan of reorganization under Chapter 11 of the United
States Bankruptcy Code with the United States Bankruptcy Court for the District
of Delaware.
L. William Seidman, age 78, has served as a director of the Company since
1997. He is the publisher of Bank Director magazine and chief commentator on
CNBC-TV. He served on the board of US Order from 1995 until the Merger. Mr.
Seidman served from 1985 to 1991 as the chairman of the Federal Deposit
Insurance Corporation ("FDIC") and from 1989 to 1991 also served as the first
Chairman of the Resolution Trust Corporation. Before joining the FDIC, Mr.
[FN]
(1) In November 1996, US Order, Inc.("US Order") and Colonial Data Technologies
Corp. ("Colonial Data") merged into InteliData (the "Merger") pursuant to an
Agreement and Plan of Merger (the "Merger Agreement"). In the Merger, each
common stockholder of US Order or of Colonial Data received one share of the
Company's common stock for each share of US Order or Colonial Data common stock
held. The Company also assumed certain of US Order's and Colonial Data's
employee benefit and stock incentive plans. Where information is provided as of
a date or period prior to November 7, 1996, such information is provided with
respect to US Order or Colonial Data, as appropriate.
</FN>
<PAGE>
Seidman served as Dean of the College of Business at Arizona State University.
From 1977 to 1982 he was vice-chairman and chief financial officer of Phelps
Dodge Corporation. Mr. Seidman has also served as managing partner of Seidman &
Seidman, Certified Public Accountants (now BDO Seidman), and as Assistant to the
President for Economic Affairs during the Ford Administration. Mr. Seidman
presently serves as a director of Fiserv, Inc., a data processing company,
Clark/Bardes Holdings, Inc., a services company providing insurance-financed
benefits programs, and quepasa.com, inc., an internet online service provider.
DIRECTORS CONTINUING IN OFFICE IN THE CLASS OF 2001
John J. McDonnell, Jr., age 62, has served as a director of the Company
since 1997. Since February 2000, he has served as President, Chief Executive
Officer and Chairman of PaylinX Corporation, a provider of electronic commerce
payment solutions. From 1990 to 1999, he was President, Chief Executive Officer,
and a director of Transaction Network Services, Inc., a provider of data
communications services for transaction oriented applications. From 1987 to
1989, Mr. McDonnell served as president and chief executive officer of Digital
Radio Networks, Inc., a local access bypass carrier for point-of-sale
transactions. Mr. McDonnell has previously served as group vice president for
the information technologies and telecommunications group of the Electronic
Industries Association; vice president, international operations and vice
president, sales, for Tymnet, Inc. with responsibility for both private network
sales and public network services; and director of technology and
telecommunications for the National Commission on Electronic Funds Transfer. Mr.
McDonnell was one of the founding members of the Electronics Funds Transfer
Association and serves on its board. Mr. McDonnell is also chairman of the board
of directors of Credit Management Solutions, Inc., a software development
company.
Norman J. Tice, age 64, is Chairman Emeritus of the Board of Directors of
MasterCard International, Inc. Global, a brand and payment systems company,
since June, 1996, prior to which he served as Chairman from 1994 to 1996 and a
member of the Board since 1984. He is also Chairman of the Board of Blue Cross
and Blue Shield of Missouri, a health insurer, since 1990, with a break in
service from 1994 to 1996. He serves on the Board of Directors of RightCHOICE
Managed Care, Inc., a managed care company. Mr. Tice has over 40 years
experience in banking as an executive with Boatmen's Bank of St. Louis, City
Bank of St. Louis, Charter Bank, N.A. of St. Louis, and Boatmen's Bancshares,
Inc. From 1985 until his retirement in 1996, Mr. Tice's positions included
service as chairman and chief executive officer of Boatmen's Credit Card Bank,
chairman and chief executive officer of Boatmen's Community Development
Corporation, and executive vice president of Boatmen's Bank of St. Louis.
DIRECTORS CONTINUING IN OFFICE IN THE CLASS OF 2002
Alfred S. Dominick, Jr., age 54, has served as the President and Chief
Executive Officer of the Company since August 1998. Prior to joining InteliData,
Mr. Dominick had served as president of the Retail Products Delivery Group at
M&I Data Services. Prior to joining M&I Data Services in July 1995, he was
Executive Vice President of Retail Banking and a member of the Executive
Committee for Boatmen's Bancshares Corporation for three years. From 1990 to
1992, Mr. Dominick was an Executive Vice President with Bank One Texas. Prior to
joining Bank One Texas, Mr. Dominick was a Senior Vice President with Fleet
National Bank. Mr. Dominick currently serves as a director of FB BanCorp.
<PAGE>
Patrick F. Graham, age 60, has served as a director of the Company since
1996 and was a director of US Order from 1993 until the Merger. Since July 1999,
he has been the Director of the Global Strategy Practice of A.T. Kearney, Inc.,
a management consulting firm. From 1997 until June 1999, he served as chief
executive officer of WorldCorp, Inc. On February 12, 1999, WorldCorp, Inc. filed
a Voluntary Petition and a proposed plan of reorganization under Chapter 11 of
the United States Bankruptcy Code with the United States Bankruptcy Court for
the District of Delaware. He was previously a director of Bain & Company, Inc.,
a management consulting firm co-founded by Mr. Graham in 1973. In addition to
his primary responsibilities with Bain clients, he served as Bain's vice
chairman and chief financial officer. Prior to founding Bain, Mr. Graham was a
group vice president with the Boston Consulting Group.
BOARD OF DIRECTORS AND COMMITTEES
The Company's Board of Directors held three regular meetings and two
telephonic meetings during fiscal year 1999. Each incumbent director attended at
least 75 percent of the meetings held during fiscal year 1999 by the Board and
each committee of the Board of which he was a member. The Company's Board of
Directors has a Compensation Committee and an Audit Committee.
The Compensation Committee (consisting of Messrs. Graham and McDonnell)
reviews and recommends to the Board appropriate action with respect to the
compensation of and benefits granted to officers and other key employees of the
Company and administers the Company's 1996 Incentive Plan. The Compensation
Committee held three meetings during fiscal year 1999.
The Audit Committee (consisting of Messrs. McDonnell and Tice) nominates
the Company's independent auditors, reviews related party transactions for
conflicts of interest, reviews with the Company's independent auditors matters
relating to the scope and plan of the audit, the adequacy of internal controls,
and the preparation of the Company's financial statements, reports and makes
recommendations to the Board with respect thereto. The Audit Committee did not
hold any separate meetings during fiscal year 1999 as the audit issues and
meeting with outside auditors were addressed in the context of regular Board
meetings.
The Company does not have a nominating committee.
COMPENSATION OF DIRECTORS
Directors of the Company who are not also executive officers of the Company
or of an affiliate of the Company ("Non-Affiliate Directors") receive a
quarterly payment of $3,000 and $500 for each Board meeting attended, excluding
telephonic meetings. They are also reimbursed for usual and ordinary expenses of
meeting attendance. Under the Non-Employee Directors' Stock Option Plan (the
"Directors' Plan") each Non-Affiliate Director is offered options to purchase
6,000 shares of Common Stock following the Company's Annual Meeting of
Stockholders. The exercise price for any option grants under the Directors' Plan
will be the average closing price of the Common Stock during the 30 trading days
immediately preceding the
<PAGE>
date of grant. Options granted under the Directors' Plan vest in 12 equal
monthly installments during the Non-Affiliate Director's continued service on
the Board. The option price may be paid in cash, by surrendering shares of
Common Stock or by a combination of cash and Common Stock. All options expire
ten years after their grant. Up to 200,000 shares of Common Stock may be issued
under the Directors' Plan, subject to certain adjustments.
AMENDMENT TO THE 1996 INCENTIVE PLAN RESERVING AN ADDITIONAL 1,000,000
SHARES OF THE COMPANY'S COMMON STOCK AND INCREASING THE NUMBER OF
SHARES THAT MAY BE ISSUED AS STOCK AWARDS TO 500,000 SHARES
(Proposal 2)
The stockholders are being asked to approve an amendment to the Company's
1996 Incentive Plan (the "1996 Plan") reserving an additional 1,000,000 shares
of the Company's Common Stock for issuance thereunder and increasing the number
of shares that may be issued as Stock Awards to 500,000 shares. The Board of
Directors believes that this amendment to the 1996 Plan is important to the
continued functioning of the 1996 Plan, which has proved an effective means of
recruiting, motivating and retaining the most qualified employees. In the past
several years, the labor markets in which the Company operates have become
increasingly more competitive, and recruiting and retaining the highly skilled
employees the Company needs has become increasingly difficult. The Company has
recently increased its hiring activity significantly, particularly in the area
of technical and engineering personnel. As a result, the Board believes that the
proposed increase in the number of shares of Common Stock issuable under the
1996 Plan and the increase in the number of shares that may be issued as Stock
Awards are necessary to recruit new employees and to increase existing
employees' current equity stakes in the Company. For a description of the 1996
Plan, see "Description of the 1996 Plan" below.
As of the Record Date, and without giving effect to this Proposal 2,
2,400,000 shares have been reserved for issuance under the 1996 Plan, of which
240,039 have been issued pursuant to option exercises or Stock Awards, 1,902,365
are subject to outstanding options, and 257,596 are available for grant.
Proposal 2 was adopted by the Board of Directors on April 6, 2000 subject to
stockholder approval.
As of the Record Date, there were 1,430,993 shares of Common Stock subject
to outstanding but unexercised options under the Company's other stock option
plans.
BRIEF SUMMARY OF THE AMENDMENT TO THE 1996 PLAN
The 1996 Plan currently authorizes the issuance of up to 2,400,000 shares
of Common Stock of the Company. On April 6, 2000, the Board of Directors
approved an amendment to the 1996 Plan increasing the number of shares reserved
for issuance under the plan by 1,000,000 to 3,400,000 and increasing the maximum
aggregate number of shares that may be issued under the Plan as Stock Awards by
250,000 to 500,000. Due to prior grants of stock options and stock awards, as of
the Record Date, only 257,596 shares remained available for issuance under the
1996 Plan.
<PAGE>
PURPOSE OF THE 1996 PLAN
The Board of Directors strongly recommends that the stockholders approve
the amendment to the 1996 Plan. The Board believes that grants of stock options,
incentive awards and stock awards are extremely important to the Company's
overall compensation package. The 1996 Plan allows the Company to recruit and
retain the most qualified employees by enabling employees to participate in the
future success of the Company and to align their interests with those of the
Company and its stockholders.
DESCRIPTION OF THE 1996 PLAN
The 1996 Plan currently authorizes the issuance of up to 2,400,000 shares
of Common Stock and, as amended, will authorize the issuance of up to 3,400,000
shares. The 1996 Plan currently authorizes the issuance of up to 250,000 shares
of Common Stock as Stock Awards and, as amended, will authorize the issuance of
up to 500,000 shares as Stock Awards. The 1996 Plan is administered by the
Compensation Committee of the Board of Directors or any delegate thereof (the
"Administrator"). Executive officers (including the Named Executive Officers)
and all other employees of the Company are eligible to participate in the 1996
Plan. As of April 12, 2000, the Company had 116 full-time employees and one
part-time employee. The Board of Directors cannot make any grants of stock
options, SARs, stock awards or incentive awards under the 1996 Plan after
November 7, 2006.
The Board of Directors may amend the 1996 Plan as it deems advisable;
provided, however, that no amendment may become effective until stockholder
approval is obtained if (i) the amendment increases the aggregate number of
shares issuable under the 1996 Plan, (ii) the amendment changes the class of
individuals eligible to participate, or (iii) the amendment materially increases
the benefits provided under the 1996 Plan.
Stock Options. Options to purchase shares of Common Stock granted under the
1996 Plan may be incentive stock options that qualify for favorable income tax
treatment or nonstatutory stock options. The purchase price of Common Stock
covered by an option may not be less than 85% of the fair market value of the
Common Stock on the date of the option grant, except that in the case of an
incentive stock option the purchase price may not be less than 100% (or, in the
case of an incentive stock option granted to a 10% stockholder, 110%). The value
of incentive stock options, based on the exercise price, that can be exercisable
for the first time in any calendar year under the 1996 Plan or any other similar
plan maintained by the Company is limited to $100,000.
Options may be exercised only at such times as may be specified by the
Administrator in the optionee's stock option agreement. Generally, an incentive
stock option shall not be exercisable after ten years (or, in the case of an
incentive stock option granted to a 10% stockholder, five years) from the date
on which the incentive stock option was granted.
Generally, options are not transferable, except upon the death of the
option holder. An option agreement may provide, however, that options that are
not incentive stock options are transferable to certain family members of the
optionee.
<PAGE>
Payment of the exercise price of an option must be in cash or a cash
equivalent acceptable to the Administrator, unless the option agreement allows
the optionee to pay by means of surrendering shares of Common Stock. If Common
Stock is used to pay all or a part of the exercise price, the sum of the cash or
cash equivalent and the fair market value of the surrendered Common Stock must
not be less than the exercise price of the shares for which the option is being
exercised. Subject to the option agreement, it is also possible for an optionee
to pay the exercise price in installments.
Optionees do not have rights as stockholders until they exercise their
options.
Stock Appreciation Rights. The Administrator may award SARs to any eligible
employee and shall specify the number of shares of Common Stock covered by such
SARs. Subject to the Administrator's discretion, a SAR may be granted with a
stock option and be exercisable only upon exercise of the related stock option
(as such, a "Corresponding SAR"), or a SAR may be granted and exercised
independent of any stock option. In any calendar year, no employee may be
granted SARs covering more than 250,000 shares, except that any stock options
granted with Corresponding SARs shall be treated as a single award. Furthermore,
no employee may be granted Corresponding SARs (under all Company incentive stock
option plans) that are related to incentive stock options first exercisable in
any calendar year for Common Stock having an aggregate fair market value
exceeding $100,000.
SARs may be exercised only at such times as may be specified by the
Administrator; provided, however, that no SAR shall be exercisable after ten
years (or, in the case of a Corresponding SAR that is related to an incentive
stock option granted to a 10% stockholder, five years) from the date on which
the corresponding option was granted. Furthermore, a Corresponding SAR that is
related to an incentive stock option may be exercised only to the extent that
the related option is exercisable and only when the fair market value of the
Common Stock for which the stock option is exercisable exceeds the exercise
price of the related option.
Generally, the same restrictions on transfer that apply to stock options
also apply to SARs. A holder of a SAR has no rights as a stockholder of the
Company.
Stock Awards. The Administrator may designate certain employees as
recipients of awards of Common Stock and specify the number of shares of Common
Stock covered by such awards; provided, however, that no employee may receive
stock awards in any calendar year covering more than 60,000 shares. The
Administrator may include provisions in a stock award agreement making the
vesting and transferability of the stock award contingent upon the attainment of
certain performance objectives. The Administrator may define such performance
objectives to include objectives based on the Company's, an affiliate's or an
operating unit's return on equity, earnings per share, total earnings, earnings
growth, return on capital, return on assets or fair market value.
<PAGE>
Prior to forfeiture and while the shares of Common Stock granted pursuant
to a stock award may be forfeited or are transferable, a stock award bestows the
rights of a stockholder on the holder thereof provided that (i) the grantee does
not transfer or otherwise dispose of the shares of the Common Stock granted
pursuant to the stock award, (ii) the Company retains custody of the stock
certificates and (iii) the grantee of the stock award delivers a stock power to
the Company.
Incentive Awards. The Administrator may designate certain employees to
receive incentive awards; provided, however, no employee may receive an
incentive award that exceeds the lesser of (i) 75% of the employee's base salary
or (ii) $350,000. The Administrator makes each incentive award contingent upon
the attainment of certain performance objectives of the Company over a period of
at least one year and may condition an incentive award on an employee's
attainment of certain individual goals. Such terms and conditions shall
prescribe that the incentive award shall be earned only to the extent that the
Company, an affiliate or an operating unit, during a performance period of at
least one year, achieves objectives based on the Company's return on equity,
earnings per share, total earnings, earnings growth, return on capital, return
on assets or fair market value. Generally, incentive awards are not transferable
other than upon death. An incentive award agreement may provide, however, that
an incentive award is transferable to certain family members. The receipt of an
incentive award does not bestow the rights of a stockholder on the grantee.
Adjustments. The Compensation Committee shall adjust (i) the maximum number
of shares of Common Stock as to which stock options, SARs and stock awards may
be granted, (ii) the terms of outstanding stock options, SARs and stock awards,
and (iii) the individual limitations on the number of shares of Common Stock for
which stock options, SARs and stock awards may be granted, in the event that (a)
there is a stock dividend, stock split or similar pro rata change in the number
of outstanding shares of Common Stock, (b) the Company engages in a transaction
governed by Section 424 of the Internal Revenue Code, or (c) the Compensation
Committee believes an adjustment is necessary as the result of a certain event.
FEDERAL INCOME TAX CONSEQUENCES.
Generally federal income tax liability is not incurred when an employee
is granted a nonstatutory stock option or an incentive stock option or when the
employee is granted a stock award comprised of restricted stock. An employee
will be subject to federal income tax on the award of restricted stock when the
restrictions imposed lapse or the stock becomes transferable, unless the
employee makes a Section 83(b) election to have the grant taxed as compensation
income at fair market value on the date of grant, with the result that any
future appreciation (or depreciation) in the value of the stock subject to the
grant will be treated as capital gain (or loss) at the time the stock is sold.
An employee who is eligible to receive a stock award contingent upon attainment
of certain stock performance goals will not incur federal income tax until such
stock award is received.
Upon exercise of a nonstatutory stock option or a SAR, an employee
generally will recognize compensation income, which is subject to income tax
withholding by the Company, equal to the difference between the fair market
value of the Common Stock on the date of the
<PAGE>
exercise and the purchase price. An employee who has received shares of
restricted stock pursuant to a stock award, and has not made a Section 83(b)
election, will include in his gross income as compensation income an amount
equal to the fair market value of the shares of restricted stock at the time the
restrictions lapse or the stock becomes transferable. An employee who receives
shares of Common Stock pursuant to a stock award that is contingent upon the
attainment of certain performance goals will include in his gross income as
compensation income an amount equal to the fair market value of the shares of
Common Stock on the date of transfer to the employee. The compensation income
recognized by the employee will be subject to income tax withholding by the
Company.
When an employee exercises an incentive stock option, he generally will not
recognize income subject to tax, unless the employee is subject to the
alternative minimum tax.
If permitted by the applicable stock option agreement, an employee may
deliver shares of Common Stock instead of cash to acquire shares under an
incentive stock option or nonstatutory stock option, without having to recognize
taxable gain (except in some cases with respect to "statutory option stock") on
any appreciation in value of the shares delivered. However, if an employee
delivers shares of "statutory option stock" in satisfaction of all, or any part,
of the exercise price under an incentive stock option, and if the applicable
holding periods for the "statutory option stock" have not been met, he will be
considered to have made a taxable disposition of the "statutory option stock."
"Statutory option stock" is stock acquired upon the exercise of incentive stock
options.
Assuming that the recipient's compensation is otherwise reasonable and that
the statutory limitations on compensation deductions by publicly held companies
(as discussed below) imposed by Section 162(m) of the Internal Revenue Code do
not apply, the Company usually will be entitled to a business expense deduction
at the time and in the amount that the recipient of a stock option, SAR, stock
award or incentive award recognizes ordinary compensation income in connection
therewith. As stated above, this usually occurs upon exercise of nonstatutory
options and SARs and upon the lapsing of restrictions or the attainment of
performance goals related to certain stock awards. Section 162(m) imposes a $1
million limitation on the amount of the annual compensation deduction allowable
to a publicly-held company in respect of each of its chief executive officer and
its four most highly paid executive officers other than the chief executive
officer. An exception is provided for certain performance-based compensation if
statutory provisions pertaining to stockholder approval (and related disclosure)
and plan administration are satisfied. The provisions of the 1996 Plan, will
satisfy these statutory provisions with respect to nonstatutory stock options
and SARs so that compensation income recognized upon the exercise of a
nonstatutory option or a stock appreciation right will be performance-based.
No deduction to the company is allowed in connection with an incentive
stock option, unless the employee disposes of Common Stock received upon
exercise before the expiration of the holding period for incentive stock option
stock, subject to the limitations of Section 162(m).
This summary of federal income tax consequences of nonstatutory stock
options, incentive stock options, SARs, restricted stock and incentive stock
does not purport to be complete. There may also be state and local income taxes
applicable to these items.
<PAGE>
NEW PLAN BENEFITS
The 1,257,596 shares of Common Stock that, after giving effect to the
amendment, will be available for issuance under the 1996 Plan will be used for
future awards. All such future awards are subject to the discretion of the
Administrator and, therefore, are not determinable at this time.
COMMON STOCK PRICE
On April 12, 2000, the closing market price of the Company's Common
Stock on the Nasdaq National Market was $12.94.
VOTE REQUIRED
Directors who are employees of the Company may benefit from adoption of
this amendment, and to that extent may have a conflict of interest in
recommending the amendment. Because approval of this proposal requires the
affirmative vote of the majority of shares of Common Stock present in person or
represented by proxy at the Annual Meeting and entitled to vote on the proposal,
abstentions will have the same effect as a vote against the proposal, and broker
non-votes will have no effect on the outcome of the proposal.
The Board of Directors recommends a vote "FOR" Proposal 2
RATIFICATION OF AUDITORS
(Proposal 3)
Action is to be taken at the Annual Meeting with respect to the
ratification of independent auditors, who were selected by the Board of
Directors, to audit the financial statements of the Company for fiscal year
2000. Unless otherwise directed therein, proxies received pursuant to this
solicitation will be voted for the ratification of Deloitte & Touche LLP, who
served as the Company's auditors for fiscal year 1999. Although the ratification
of independent auditors is not required to be submitted to a vote of the
stockholders, the Board of Directors believes that such ratification is a matter
on which the stockholders should express their opinion. Deloitte & Touche LLP
has advised the Company that no member of its firm has any direct or indirect
material financial interest in the Company. Representatives of Deloitte & Touche
LLP are expected to be present at the Annual Meeting, will have the opportunity
to make a statement if they so desire, and will be available to respond to
appropriate questions from the stockholders.
The Board of Directors recommends a vote "FOR" Proposal 3
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual, long-term
and all other compensation for services rendered in all capacities to the
Company, its subsidiaries and predecessors for the years ended December 31,
1999, 1998 and 1997 of (a) the Company's Chief Executive Officer, and (b) each
of the three most highly compensated executive officers (other than the chief
executive officer) of the Company (the "Named Executive Officers") whose
aggregate cash compensation exceeded $100,000 for the fiscal year ended December
31, 1999.
<TABLE>
Long-Term Compensation
---------------------------------------
Awards
---------------------------------------
Anual Compensation Restricted Securities
------------------------------------------ Stock Underlying All Other
Year Salary($) Bonus($)(F1) Other ($) Awards($) Options(#) Compensation ($)(F2)
---- --------- ----------- --------- ----------- ---------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alfred S. Dominick, Jr. 1999 300,000 100,000 243,800(F4) -- 1,200,000 59,456
President and Chief 1998 109,617 -- -- -- -- 7,295
Executive Officer (F3)
William F. Gorog 1999 250,000 -- -- -- 400,000 2,500
Chairman 1998 256,001 -- -- -- 100,000(F5) 2,550
1997 250,000 -- -- 100,000 2,375
Thomas W. Oxendine 1999 155,773 65,000 -- 38,450(F7) 22,500 5,414
Vice President, Engineering 1998 73,155 -- -- -- 57,500 33,233
and Implementation (F6)
Albert N. Wergley 1999 176,927 50,000 -- 31,950(F8) 64,500 2,148
Vice President, General 1998 147,407 25,000 -- -- 120,500(F9) 1,548
Counsel and Secretary 1997 131,537 25,000 -- -- 94,502(F9) 2,375
<FN>
-----------------------
<F1> Bonus awards are reported for the year earned but may have been
paid in the subsequent year.
<F2> For 1999, includes (i) travel and temporary housing expenses for
Mr. Dominick ($51,935); (ii) relocation expenses for Mr.
Oxendine ($2,914); (iii) the dollar value of insurance premiums
paid by the Company for the benefit of Mr. Dominick ($7,521);
and (iv) the amount of Company matching contributions made on
behalf of the named individuals under the Company's 401(k) Plan
as follows: Messrs. Dominick, Gorog and Oxendine ($2,500) and
Mr. Wergley ($2,148).
For 1998, includes: (i) the dollar value of insurance premiums
paid by the Company for the benefit of Mr. Dominick ($7,295);
(ii) temporary housing and relocation expenses for Mr. Oxendine
($32,145); and (iii) the amount of Company matching
contributions made on behalf of the named individuals under the
Company's 401(K) Plan as follows: Messrs. Gorog ($2,550)
Oxendine ($1,088), and Wergley ($1,548).
For 1997, includes: the amount of Company matching contributions
made on behalf of the named individuals under the Company's
401(K) Plan as follows: Messrs. Gorog, and Wergley ($2,375 each).
<F3> Mr. Dominick joined the Company in August 1998.
<F4> Pursuant to the April 5, 1999 Employment Agreement between Mr.
Dominick and the Company, Mr. Dominick purchased 200,000 shares
of the Company's stock with a market value of $244,000, for an
aggregate consideration of $200.
<PAGE>
<F5> The 100,000 options granted in 1998 consist of a repricing of the
100,000 options previously granted in 1997.
<F6> Mr. Oxendine joined the Company in June 1998.
<F7> Consists of the fair market value of restricted stock awards on
the date of the award of 10,000 shares on February 5, 1999 and
10,000 shares on September 13, 1999. The awards vest, subject to
Mr. Oxendine's continued employment with the Company, on August
5, 2000 and December 31, 2000, respectively. At December 31,
1999, these shares had a fair market value of $83,200.
<F8> Consists of the fair market value of restricted stock awards on
the date of the award of 6,000 shares on February 5, 1999 and
10,000 shares on September 13, 1999. The awards vest, subject to
Mr. Wergley's continued employment with the Company, on August 5,
2000 and December 31, 2000 respectively. At December 31, 1999,
these shares had a fair market value of $66,560.
<F9> Includes 44,502 options previously granted that were repriced in
1997 which were also included in the 116,000 options that were
repriced in 1998.
</FN>
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to stock option
grants under the Company's 1996 Incentive Plan or the Company's 1998 Chief
Executive Officer's Plan.
<TABLE>
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of Stock
Securities Options/SARs Price Appreciation for Option
Underlying Granted to Exercise or Term <F1>
Options/SARs Employees in Base Price Expiration ------------------------------
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---- ------------ ------------- ----------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Alfred S. Dominick, Jr. 1,200,000 50.9 % 1.22 8/17/08 807,144 1,988,035
William F. Gorog 400,000 17.0 % 1.22 4/5/07 232,998 558,071
Thomas W. Oxendine 7,500 0.3 % 1.28 4/1/07 4,584 10,978
15,000 0.6 % 3.00 11/22/07 21,485 51,461
Albert N. Wergley 4,500 0.2 % 1.28 4/1/07 2,750 6,587
50,000 2.1 % 2.00 6/14/07 47,746 114,359
10,000 0.4 % 3.00 11/22/07 14,324 34,308
- --------------------------
<FN>
<F1> The actual value, if any, an employee may realize will depend on
the excess of the stock price over the exercise price on the date
the stock option is exercised. Potential Realized Value is net of
the option exercise price. The dollar amounts under these columns
are the result of calculations at the 5% and 10% rates set by the
rules of the SEC and therefore are not intended to forecast
future appreciation, if any, of the Company's stock price.
</FN>
</TABLE>
OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END VALUE TABLE
The following table sets forth information regarding the exercise of stock
options and the unexercised stock options as of December 31, 1999 granted to the
Chief Executive Officer and the Named Executive Officers under the Company's
1996 Incentive Plan or any stock plan of the Company.
<PAGE>
<TABLE>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs Options/SARs
at December 31, 1999(#) at December 31, 1999($)<F2>
------------------------------ ----------------------------
Shares Acquired Value
Name on Exercise (#) Realized($)<F1> Exercisable Unexercisable Exercisable Unexercisable
- ---- ---------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alfred S. Dominick, Jr. - 0 - - 0 - 166,667 1,033,333 490,001 3,037,999
William F. Gorog 100,000 52,000 199,999 300,001 602,664 889,336
Thomas W. Oxendine - 0 - - 0 - 16,250 63,750 51,238 169,238
Albert N. Wergley 36,331 108,878 28,804 119,865 90,954 307,446
<FN>
- ---------------------
<F1> Value based on last reported sale price of the Company's common
stock on the exercise date minus the exercise price.
<F2> Value based on last reported sale price of the Company's common
stock on December 31, 1999 (the last trading day of the year) on
the Nasdaq National Market minus the exercise price. The last
reported sale price at December 31, 1999 was $4.16 per share.
</FN>
</TABLE>
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Company's Compensation Committee (the "Committee") is comprised of
outside directors whose role is to oversee the development and administration of
the compensation and benefit programs for the Company's executive officers. The
Committee also administers the Company's 1996 Incentive Plan that permits stock
option grants to employees, the Company's 1998 Chief Executive Officer's Plan,
and the Company's Incentive Compensation Plan that provides for bonuses to
employees in management positions based on the achievement of individual
performance Company goals. In the case of Mr. Dominick, the Company's President
and Chief Executive Officer and Messrs. Oxendine and Wergley, the salary levels
are set pursuant to employment agreements entered into between the Company and
the executive. The employment agreements, which are described below, will
continue to prescribe the base salaries and certain other benefits for these
executives until these agreements are terminated or expire.
The Committee made no awards in 1999 to the Named Executive Officers under
the Company's Incentive Compensation Plan. However, the Committee did approve
bonus awards to Messrs. Dominick, Oxendine and Wergley during 1999 of $100,000,
$65,000 and $50,000, respectively. These awards were part of a Company-wide
bonus plan approved by the Committee to reward executive management and
employees for significant contributions to the Company's performance in 1999,
including improvement in the Company's financial condition, accomplishment of
key strategic initiatives, and the increase in the Company's market
capitalization.
The Compensation Committee
--------------------------
Patrick F. Graham
John J. McDonnell, Jr.
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Patrick F. Graham
and John J. McDonnell, Jr.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Alfred S. Dominick, Jr.
The Company has entered into an employment agreement with Alfred S.
Dominick, Jr. as of April 5, 1999, providing that Mr. Dominick will serve as
President and Chief Executive Officer of the Company until April 5, 2002, unless
further extended or sooner terminated as set forth in the agreement.
Furthermore, the Company will annually nominate and take such action as may be
appropriate or necessary to seek stockholder election of Mr. Dominick to the
Company's Board of Directors. Mr. Dominick has agreed to resign from the Board
in connection with, and effective upon, termination of his employment with the
Company.
Mr. Dominick is entitled to (i) a base salary of $300,000 per year, (ii) an
annual bonus of up to 25% of his base salary for the period commencing August
17, 1998 through December 31, 1998, and (iii) an annual bonus of up to 75% of
his base salary for the period commencing January 1, 1999 through the remaining
term of the employment agreement. In addition, Mr. Dominick is entitled to
participate in all medical, dental, life, disability, 401(k), employee stock
purchase and such other fringe benefit plans or arrangements generally made
available by the Company to all salaried employees. As an inducement to his
becoming an employee of the Company, Mr. Dominick was granted options to
purchase 1,200,000 shares of Common Stock pursuant to the Company's 1998 CEO
Incentive Plan. The option shall become exercisable as to 66,667 option shares
on August 17, 1999, 66,667 option shares on August 17, 2000, and 66,666 option
shares on August 17, 2001; the option as to an additional 500,000 option shares
shall become exercisable on August 17, 2005, provided that the option shall
become exercisable earlier in increments of 100,000 option shares based on the
achievement of designated trading prices of the Common Stock; and the option as
to an additional 500,000 option shares shall become exercisable on April 15,
2008; provided that the option shall become exercisable earlier upon the Common
Stock trading above $25.00 per share for sixty consecutive trading days during
the term of the option. Mr. Dominick has agreed to hold 100,000 shares of Common
Stock for the remaining term of his employment agreement. Upon entering into the
employment agreement, Mr. Dominick purchased 200,000 shares of Common Stock for
an aggregate purchase price of $200.00.
The Company may terminate the agreement for "Cause" (as defined) or if Mr.
Dominick incurs a disability that continues for a period of 180 consecutive
days. Mr. Dominick may terminate the agreement upon prior written notice to the
Company or for "Good Reason" (as defined). If the Company terminates Mr.
Dominick for other than "Cause," or if Mr. Dominick terminates the agreement for
"Good Reason," then Mr. Dominick is entitled to: (i) an amount equal to twelve
months of his base salary then in effect; (ii) any amounts vested or payable
under any deferred salary, bonus compensation or other plan; (iii) an amount
equal to the highest incentive bonus paid to him during the three years
immediately preceding his termination, prorated
<PAGE>
through his month of termination; and (iv) a continuation, at the Company's
expense, of life, disability, accident and health insurance benefits for twelve
months following termination. Notwithstanding the above, if, within one year of
a Change of Control (as defined), Mr. Dominick's employment is terminated by the
Company for other than Cause or by Mr. Dominick for Good Reason, then Mr.
Dominick is entitled to: (i) an amount equal to the greater of the undiscounted
amount of twelve months base salary or the undiscounted remainder of his base
salary for the unexpired term of the employment agreement; (ii) any amounts
vested or payable under any deferred salary, bonus compensation or other plan;
(iii) an amount equal to the highest incentive bonus paid to him during the
three years immediately preceding his termination, prorated through his month of
termination; and (iv) a continuation, at the Company's expense, of life,
disability, accident and health insurance benefits for the greater of twelve
months from termination or a period equal to the unexpired term of the
employment agreement. Mr. Dominick's employment agreement terminates
automatically upon his death in which case the Company would have no further
obligation to Mr. Dominick or his estate other than the disposition of life
insurance, accrued and unpaid base salary, accrued vacation and bonuses and
other incentive compensation earned but not paid for periods prior to the date
of death.
The employment agreement also provides that during the term of the
agreement and for one year following his termination (other than in the event of
termination by InteliData other than for Cause or by Mr. Dominick for Good
Reason), Mr. Dominick will not compete, directly or indirectly, with the
Company. Furthermore, pursuant to a non-solicitation provision in the employment
agreement, Mr. Dominick may not solicit certain current or former employees of
the Company during the term of the agreement or for a period of two years
thereafter.
OTHER NAMED EXECUTIVE OFFICERS
The Company has an employment agreement with Albert N. Wergley, dated as of
December 17, 1997, providing that he will serve as General Counsel of the
Company until December 31, 2000, unless further extended or sooner terminated as
set forth in the agreement. The Company also has an employment agreement with
Thomas W. Oxendine, dated as of November 3, 1998 providing that he will serve as
Vice President Engineering and Implementation Services until December 31, 2000,
unless further extended or sooner terminated as set forth in the agreement.
The Executive is entitled to a base salary per year and annual bonuses. In
addition, he is entitled to participate in all bonus and incentive compensation
plans or arrangements made available by the Company to its officers and
directors and is entitled to receive such benefits as provided to all salaried
employees as well as those established by the Compensation Committee for the
Company's executives. The Executive's employment agreement terminates
automatically upon the Executive's death in which case the Company would
<PAGE>
have no further obligation to the Executive or his estate other than the
disposition of life insurance and related benefits and accrued and unpaid base
salary, bonus, unreimbursed expenses and incentive compensation for periods
prior to the date of death (the "Standard Termination Payments"). The Company
may terminate the agreement for "cause" (as defined) or if the Executive incurs
a disability that continues for a period of 180 consecutive days. The Executive
may terminate the agreement for "good reason" (as defined). The Executive may
also terminate the agreement in which case the Company would have no further
obligation to the Executive except for the Standard Termination Payments. If the
Company terminates the Executive for other than "cause" or upon death or total
disability, or if the Executive terminates the agreement because the Company
fails to comply with the agreement or following a "Change in Control" whereby
the Executive's duties are substantially diminished or the Executive is
relocated, then the Executive is entitled to: (i) the Standard Termination
Payment; (ii) any bonus earned but not yet paid under any "Stay Put" or any
other bonus program; (iii) 100% of his annual base salary; and (iv) any and all
options granted shall be vested for twelve months and exercisable for the longer
of twelve months after the termination date or period for exercise as provided
in the Executive's option agreement. In addition, in the case of Mr. Wergley, if
the Company terminates the Executive following a "Change of Control" for other
than "cause," total disability or upon death, or if the Executive terminates the
agreement due to a substantial change in duties or relocation following a
"Change in Control," the Executive shall have the following additional rights:
(i) the Company shall pay an additional 50% of the Executive's annual base
salary, (ii) all granted but unvested options shall become immediately vested
and nonforfeitable and remain exercisable for their respective remaining terms,
and (iii) the Executive shall have the right to cause the Company to purchase
all or a portion of the options at their fair value on the date of termination.
In the case of a termination by Mr. Wergley other than for "good reason", he is
entitled to a payment of three months salary and medical benefits.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and beneficial owners of more than 10% of the
Company's Common Stock to file with the SEC initial reports of ownership and
reports of changes in ownership of equity securities of the Company. Officers,
directors and beneficial owners of more than 10% of the Company's Common Stock
are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. To the Company's knowledge based solely upon a review of
copies of such reports furnished to the Company and representations that no
other reports were required, during the fiscal year ending December 31, 1999,
all Section 16(a) filing requirements applicable to its officers, directors and
beneficial owners of more than 10% of the Company's common stock were complied
with.
PERFORMANCE GRAPH
The following graph compares the cumulative total returns from November 8,
1996 (when the Company's Common Stock commenced public trading) through December
31, 1999 for the Company, the Nasdaq Market Index and the Media General Group
Index for Computer Software and Services companies. Data is also provided for
the peer group of electronic commerce and telecommunications companies that the
Company has presented in prior years' performance graphs (which includes
Checkfree Holding Corp., Cidco, Inc, Comdial Corp and S1 Corporation). Because
the Company no longer provides telecommunication or interactive services
products and services, the Company will in the future compare its performance to
that of the Computer Software and Services industry group. In the 1999
performance graph, data for both the old and new peer groups is presented.
<PAGE>
Period Ending 11/8/96 12/31/96 12/31/97 12/31/98 12/31/99
------- -------- -------- -------- --------
InteliData Technologies 100.00 75.32 19.16 13.64 43.18
Corporation
Peer Group 100.00 92.68 129.85 112.61 486.80
Media General Software and 100.00 102.36 102.36 184.31 316.30
Services Group
Nasdaq Market Index 100.00 105.97 105.97 182.83 322.47
<PAGE>
CERTAIN TRANSACTIONS
On December 21, 1999, the Company provided a loan of $82,838 to Alfred S.
Dominick, Jr., President and Chief Executive Officer of the Company, pursuant to
a Secured Promissory Note, for the payment of taxes due on a stock purchase from
the Company as described in the Summary Compensation Table. The loan is due on
December 21, 2000 and bears interest at a rate of 5.74%. As security for the
loan, Mr. Dominick has pledged 200,000 shares of the Company's Common Stock
owned by him.
OTHER MATTERS
No business other than that set forth above is expected to come before the
Annual Meeting or any adjournment thereof. Should other business properly come
before the meeting or any adjournment thereof, the proxy holders will vote upon
the same according to their discretion and best judgment.
To permit the meeting of stockholders to be conducted in an orderly manner,
the Company's Bylaws provide that stockholders seeking to bring business before
an annual meeting of stockholders, or to nominate candidates for election as
directors at an annual or a special meeting of stockholders, must provide timely
notice thereof in writing. To be timely, a stockholder's notice must be
delivered to, or mailed and received at, the principal executive office of the
Company, not less than 60 days prior to the scheduled annual meeting, regardless
of any postponements, deferrals or adjournments of the meeting. The Bylaws also
specify certain requirements pertaining to the form and substance of a
stockholder's notice.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies for the Annual Meeting will be paid by
the Company. In addition to solicitation of proxies by mail, the officers,
directors, and regular employees of the Company may solicit proxies on behalf of
the Board of Directors in person or by telephone, facsimile, telex or telegraph.
No additional compensation will be received by any officer, director or employee
of the Company in connection with any such proxy solicitation. Brokerage houses,
nominees, fiduciaries, and other custodians will be requested by the Company to
forward proxy soliciting material to beneficial owners of shares held of record
by them and, upon request, the Company may reimburse them for reasonable
out-of-pocket expenses incurred in doing so.
STOCKHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Exchange Act, stockholders may present
proper proposals for inclusion in the Company's proxy statement and for
consideration at the 2000 Annual Meeting of Stockholders by submitting their
proposals to the Company in a timely manner. In order to be considered for the
2001 Annual Meeting of Stockholders, stockholder
<PAGE>
proposals must be received at the Company's headquarters, attention of the
Secretary, 11600 Sunrise Valley Drive, Suite 100, Reston, Virginia 20191 no
later than December 26, 2000 and have complied with the requirements of Rule
14a-8 of the Securities Exchange Act of 1934, as amended.
By Order of the Board of Directors,
Albert N. Wergley
Secretary
<PAGE>
INTELIDATA TECHNOLOGIES CORPORATION
Proxy Solicited on Behalf of the Board of Directors
for the Annual Meeting of Stockholders, May 24, 2000
The undersigned hereby appoints William F. Gorog and Albert N. Wergley, as
proxies, each with the power to appoint his substitute and hereby authorizes
such person acting individually, to represent and to vote, as specified on the
reverse side hereof, all of the shares of common stock of InteliData
Technologies Corporation which the undersigned may be entitled to vote at the
Annual Meeting of Stockholders to be held on May 24, 2000 and at any
postponement or adjournment thereof; and in the discretion of the proxies, their
substitutes or delegates, to vote such shares and to represent the undersigned
in respect of other matters properly brought before the meeting.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS SPECIFIED BY THE
SIGNING STOCKHOLDER ON THE REVERSE SIDE HEREOF. UNLESS THE AUTHORITY TO VOTE FOR
ELECTION OF ANY NOMINEE FOR DIRECTOR IS WITHHELD IN ACCORDANCE WITH THE
INSTRUCTIONS ON THE REVERSE SIDE HEREOF, THIS PROXY WILL BE VOTED "FOR" THE
ELECTION OF EACH NOMINEE FOR DIRECTOR, "FOR" PROPOSAL 2, AND "FOR" PROPOSAL 3.
(To Be Signed on Reverse Side.)
- --------------------------------------------------------------------------------
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
INTELIDATA TECHNOLOGIES CORPORATION
May 24, 2000
1. To elect one two (2) directors to the Board of Directors
___ FOR all nominees ___ WITHHOLD authority for all nominee(s)
Nominees: William F. Gorog
L. William Seidman
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write the person's name below).
---------------------------------------------
2. Amendment to the 1996 Incentive Plan reserving an additional 1,000,000
shares of the Company's Common Stock for issuance thereunder and increasing
the maximum number of shares that may be issued as Stock Awards to 500,000
shares.
___ FOR ___ AGAINST ___ ABSTAIN
3. Ratification of Deloitte & Touche LLP as Independent Accountants.
___ FOR ___ AGAINST ___ ABSTAIN
Signature Date SIGNATURE, IF SHARE HELD JOINTLY Date
--------- ------ --------- ----
Instruction: Please sign exactly as your name appears hereon. When shares
are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized
person.
