<PAGE>
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 (S)240.14a-11(c) or (S)240.14a-12
RWD TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Ronald E. Holtz, Vice President, Chief Financial Officer, Corporate Secretary
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
Notes:
<PAGE>
[RWD Technologies, Inc.(R) logo appears here]
10480 Little Patuxent Parkway, Suite 1200
Columbia, Maryland 21044-3530
(410) 730-4377
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 30, 1999
----------------
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders (the
"Annual Meeting") of RWD Technologies, Inc. ("RWD" or the "Company"), will be
held on April 30, 1999, at 2 o'clock p.m., local time, at the Company's
corporate headquarters, 10480 Little Patuxent Parkway, Columbia, Maryland
21044-3530, for the following purposes:
I. To elect three (3) Class II directors of the Company to hold office until
the 2002 Annual Meeting of Stockholders and until their successors are
elected and qualified;
II. To approve the Company's Amended and Restated Employee Stock Purchase
Plan;
III. To ratify the selection of Arthur Andersen, LLP, as independent auditors
of RWD for the fiscal year ending December 31, 1999; and
IV. To transact such other business as may properly come before the Annual
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 26, 1999, as
the record date for the meeting, and only those stockholders of record of the
Company at that time will be entitled to notice of and to vote at the Annual
Meeting or any adjournments or postponements thereof. Accompanying this notice
is a Proxy Card and Proxy Statement and a copy of RWD's Annual Report for the
year ended December 31, 1998. Whether or not you expect to be present at the
Annual Meeting, please complete, sign, and date the Proxy Card and return it
in the enclosed envelope provided for that purpose prior to the date of the
Annual Meeting. The Proxy may be revoked at any time prior to the time that it
is voted at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Ronald E. Holtz
Secretary
Columbia, Maryland
April 2, 1999
<PAGE>
RWD Technologies, Inc.
10480 Little Patuxent Parkway, Suite 1200
Columbia, Maryland 21044-3530
(410) 730-4377
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 30, 1999
----------------
INTRODUCTION
This Proxy Statement, the Notice of Annual Meeting of Stockholders, and the
accompanying proxy are furnished to stockholders of RWD Technologies, Inc.
("RWD" or "Company") in connection with the solicitation of proxies by RWD's
Board of Directors to be used at the Annual Meeting of Stockholders to be held
on April 30, 1999 (the "Annual Meeting"). The purposes of the Annual Meeting
are to: 1) elect three (3) Class II directors of the Company to hold office
until the 2002 Annual Meeting of Stockholders and until their successors are
elected and qualified; 2) approve the Company's Amended and Restated Employee
Stock Purchase Plan (the "Amended and Restated ESPP"); 3) ratify the selection
of Arthur Andersen, LLP, as independent auditors of the Company for the fiscal
year ending December 31, 1999; and 4) transact such other business as may
properly come before the Annual Meeting or any adjournment or adjournments
thereof. This Proxy Statement, Notice of Annual Meeting of Stockholders, and
the accompanying proxy are first being sent to stockholders on or about April
2, 1999.
The record date for determining the stockholders entitled to notice of and
to vote at the Annual Meeting was the close of business on March 26, 1999 (the
"Record Date"). On the Record Date, there were issued and outstanding
15,018,719 shares of Common Stock, par value $0.10 per share (the "Common
Stock").
Quorum and Voting Rights
The presence, in person or represented by proxy, of the holders of a
majority of the issued and outstanding shares of RWD Common Stock as of the
Record Date is necessary to constitute a quorum at the Annual Meeting. Each
share of RWD Common Stock is entitled to one (1) vote. Directors will be
elected by a plurality of the votes cast; meaning each share may be voted for
as many individuals as there are directors to be elected and those individuals
receiving the three (3) highest number of votes "For" election to the Board of
Directors shall be considered duly elected. Cumulative voting is not
permitted. Approval of the Amended and Restated ESPP requires the affirmative
vote of a majority of the votes of shares present or represented by proxy and
entitled to vote with respect to the Amended and Restated ESPP. All other
matters, including the ratification of the appointment of Arthur Anderson,
LLP, will require approval by a majority of the votes cast by the holders of
the shares of RWD Common Stock voting in person or by proxy at the Annual
Meeting. An automated system administered by RWD's transfer agent will be used
to tabulate the votes.
Abstentions and broker non-votes will be included in determining the
presence of a quorum at the Annual Meeting. In electing directors and in
respect of all other proposals except the approval of the Amended and Restated
ESPP, abstentions and broker non-votes will not be considered votes cast and
therefore will have no effect on the outcome. Since the approval of the
Amended and Restated ESPP requires the affirmative vote of a majority of the
votes of shares entitled to vote with respect to the proposal, abstentions
will be counted (and will therefore be equivalent to a vote against) and
broker non-votes will not be counted.
The cost of soliciting proxies and preparing the proxy materials will be
borne by RWD. In addition, RWD will require securities brokers, custodians,
nominees, and fiduciaries to forward solicitation materials to the beneficial
owners of stock held of record and will reimburse them for their reasonable
out-of-pocket expenses in
<PAGE>
forwarding such solicitation materials. Proxies may be solicited personally or
by telephone or telegram by directors, officers, and employees of RWD or its
subsidiaries without additional compensation to them.
Voting By Proxy
The Board of Directors has selected John H. Beakes and Ronald E. Holtz, and
each of them, to act as proxies with full power of substitution. Any
stockholder executing a proxy has the power to revoke the proxy at any time
before it is voted. This right of revocation is not limited or subject to
compliance with any formal procedure. Any stockholder may attend the Annual
Meeting and vote in person, whether or not he or she has previously given a
proxy.
With respect to the proposal regarding election of Class II directors,
stockholders may (a) vote in favor of all nominees, (b) withhold their votes
as to all nominees, or (c) withhold their votes as to any specific nominee by
so indicating in the appropriate space on the enclosed proxy card. With
respect to the proposals to approve the Amended and Restated ESPP and the
ratification of the appointment of Arthur Andersen, LLP, as RWD's independent
auditors for the fiscal year ending December 31, 1999, stockholders may (a)
vote "For", (b) vote "Against" or (c) "Abstain" from voting as to each such
matter. All properly executed proxy cards delivered by stockholders and not
revoked will be voted at the Annual Meeting in accordance with the directions
given. If no specific instructions are given with regard to the matters to be
voted upon, the shares represented by a properly executed proxy card will be
voted "FOR" the election of all nominated directors, the approval of the
Amended and Restated ESPP, and the ratification of the appointment of Arthur
Andersen, LLP, as independent auditors. Management knows of no other matters
that may come before the Annual Meeting for consideration by the stockholders.
However, if any other matter properly comes before the Annual Meeting, the
persons named in the enclosed proxy card as proxies will vote upon such
matters in accordance with their judgment.
Stockholders who do not expect to attend the Annual Meeting in person are
urged to execute and return the enclosed proxy card promptly. Any stockholder
delivering a proxy has the power to revoke it at any time before it is voted
by giving written notice of revocation to the Secretary of the Company, by
executing and delivering to the Secretary a proxy card bearing a later date,
or by voting in person at the Annual Meeting. Any stockholder also may be
represented by another person at the Annual Meeting by executing a form of
proxy designating such person to act on the stockholder's behalf at the Annual
Meeting.
I. ELECTION OF CLASS II DIRECTORS
The Board of Directors is composed of eleven (11) persons separated into
three (3) classes, with each class serving a 3-year term. Three (3) directors
serve in Class I and are subject to re-election for a 3-year term beginning at
the 2001 Annual Meeting. Four (4) directors currently serve in Class II, one
of whom has not been renominated and the other three of whom are subject to
re-election for a 3-year term beginning at the 1999 Annual Meeting. Four (4)
directors serve in Class III and are subject to re-election for a 3-year term
beginning at the 2000 Annual Meeting.
Three (3) Class II directors are to be elected at the Annual Meeting to
serve until the 2002 Annual Meeting of Stockholders and until their successors
are duly elected and qualified. The Board of Directors has nominated the three
(3) persons named below to serve as Class II directors for the term indicated.
Each of the nominees is currently a member of the Board. Each of the nominees
has consented to serve on the Board of Directors through the 2002 Annual
Meeting of Stockholders and until his successor is duly elected and qualified.
If any of the nominees should be unable to serve for any reason (which
management has no reason to anticipate at this time), the Board of Directors
may designate a substitute nominee or nominees (in which case the persons
named as proxies in the enclosed proxy card will vote all valid proxy cards
for the election of such substitute nominee or nominees), allow the vacancy or
vacancies to remain open until a suitable candidate or candidates are located,
or, by resolution amending the By-laws of the Company, provide for a lesser
member of directors.
The Board of Directors recommends that stockholders vote FOR the election of
its nominees for Class II Director.
2
<PAGE>
Information Concerning Nominees for Director
The following table presents information about the persons nominated (who are
also current directors) by the RWD Board for election at the Annual Meeting as
Class II directors, to serve until the 2002 Annual Meeting of Stockholders, and
until their successors are duly qualified and elected.
<TABLE>
<CAPTION>
Term
Expires Principal occupation, directorships with
(if re- Director public
Name and Age elected) Since companies, and other information
------------ -------- -------- ----------------------------------------
<S> <C> <C> <C>
John H. Beakes (56)..... 2002 January John H. Beakes co-founded the Company with
Annual 1988 Dr. Robert W. Deutsch and has been Chief
Meeting Operating Officer and a director since
January 1988 and President since July 1995.
From 1974 to 1988, Mr. Beakes was employed
by General Physics, most recently as
Executive Vice President and Chief Operating
Officer. Prior to 1974, Mr. Beakes served in
the Nuclear Submarine Service of the United
States Navy, most recently as Chief Engineer
of the USS George Bancroft. Mr. Beakes
received his B.S. in Engineering from the
U.S. Naval Academy and his M.S. in
Environmental Engineering from The Johns
Hopkins University, and is a registered
Professional Engineer.
Bruce D. Alexander 2002 August Bruce D. Alexander was elected to the Board
(55)................... Annual 1997 of Directors following completion of the
Meeting Company's 1997 initial public offering. Mr.
Alexander is currently Adjunct Professor at
the Yale School of Management and Vice
President of the University. Mr. Alexander
spent 26 years at The Rouse Company, most
recently as Senior Vice President, where he
was responsible for development of that
company's commercial and mixed use projects
throughout the United States. Mr. Alexander
received his B.A. degree from Yale
University and his J.D. from Duke University
School of Law. Mr. Alexander is also a
director of LaSalle Partners U.S. Real
Estate Fund.
Deborah T. Ung (36)..... 2002 January Deborah T. Ung joined the Company in 1989
Annual 1999 and serves as Senior Vice President of the
Meeting Enterprise Resource Planning Services Group
and has been a director since January 1999.
Prior to joining the Company, Ms. Ung was
employed by General Physics in a variety of
project management capacities from 1985 to
1988. Ms. Ung received her B.S. in
Environmental Health from Purdue University.
</TABLE>
3
<PAGE>
Information Concerning Continuing Directors
<TABLE>
<CAPTION>
Principal occupation, directorships with
Term Director public
Name and Age Expires Since companies, and other information
------------ -------- -------- ----------------------------------------
<S> <C> <C> <C>
Jeffrey W. Wendel (44).. 2000 April Jeffrey W. Wendel joined the Company in 1994
Annual 1996 and serves as Senior Vice President of the
Meeting Information Technology Group and a director
of the Company. Prior to joining the
Company, Mr. Wendel was the Director of
Process Simulation for S3 Technologies,
Inc., where he managed software projects for
the petrochemical, natural gas, and nuclear
power industries from 1990 to 1994. From
1989 to 1990, Mr. Wendel was Director of
Simulation Technology for the Company. Mr.
Wendel received his B.S. in Systems
Engineering from the U.S. Naval Academy and
his M.B.A. in Management from Loyola
College.
Dr. David J. Deutsch 2000 July Dr. David J. Deutsch has been a director
(45)................... Annual 1993 since July 1993. He is a Lecturer in
Meeting Mathematics at Boston University's
Department of Mathematics. Previously, he
was a Senior Research Consultant at Boston
University's Information Technology
Department, where he was engaged in
scientific software design and algorithm
development on parallel architecture
machines. He received his B.S. in
Mathematics from the University of Maryland
and his M.S. and Ph.D. in Applied
Mathematics from Boston University. Dr.
David J. Deutsch is the son of Dr. Robert W.
Deutsch.
Jerry P. Malec (56)..... 2000 June Jerry P. Malec was elected to the Board of
Annual 1997 Directors following completion of the
Meeting Company's 1997 initial public offering. Mr.
Malec is President and Chief Executive
Officer of Revenue Technologies, a provider
of "Enterprise Class" application products
structured to enhance the revenue and
profitability of Fortune 500 companies
through the implementation of Revenue Chain
Management practices. From 1994 to 1997, Mr.
Malec was President and Chief Executive
Officer of Checkmate Electronics, Inc., a
developer and manufacturer of check and
fraud prevention and verification systems.
For five years prior to that, Mr. Malec was
employed by Apple Computer, Inc., as Vice
President and General Manager of its
Enterprise Markets division. Mr. Malec
received his B.S. degree in Economics from
Wayne State University.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Principal occupation, directorships with
Term Director public
Name and Age Expires Since companies, and other information
------------ -------- -------- ----------------------------------------
<S> <C> <C> <C>
Robert T. O'Connell (60).... 2000 June Robert T. O'Connell joined the Company in
Annual 1997 August 1997 and serves as Senior Vice
Meeting President of Strategic Business Planning and
a director. From 1995 to 1997, Mr. O'Connell
served as Senior Vice President and Chief
Staff Officer of EMC Corporation, a leading
provider of intelligent enterprise storage
and retrieval technology. Between 1965 and
1994, Mr. O'Connell held several positions
in General Motors Corporation, including
Chairman and Chief Executive Officer of
General Motors Acceptance Corporation
Financial Services and Chief Financial
Officer of General Motors Corporation. Mr.
O'Connell received his B.S. degree in
Economics from Yale University and his
M.B.A. in Finance from the Harvard Graduate
School of Business Administration.
Dr. Robert W. Deutsch (75).. 2001 January Dr. Robert W. Deutsch founded the Company in
Annual 1988 January 1988 and has been Chairman of the
Meeting Board and Chief Executive Officer since that
time. Dr. Deutsch founded General Physics
Corporation in 1966 and was its Chairman,
President, and Chief Executive Officer until
1987. From 1963 to 1971, Dr. Deutsch was
Chairman and Professor of Nuclear Science
and Engineering at The Catholic University
of America. Dr. Deutsch has a B.S. in
Physics from the Massachusetts Institute of
Technology, and a Ph.D. in Physics from the
University of California, is a member of the
National Academy of Engineering, and is a
registered Professional Engineer.
Ronald E. Holtz (41)........ 2001 December Ronald E. Holtz joined the Company in
Annual 1996 January 1996 and serves as Vice President,
Meeting Chief Financial Officer, Secretary,
Treasurer, and a director. Prior to joining
the Company, Mr. Holtz was a Manager in
Ernst & Young LLP's Financial Advisory
Services group from 1992 to 1995. From 1990
to 1992, Mr. Holtz was employed by the
Michael D. Dingman Center for
Entrepreneurship at the University of
Maryland in a variety of project management
capacities. Prior to 1990, Mr. Holtz was
Construction Manager for The Artery
Organization, Inc., a commercial real estate
development company. Mr. Holtz received his
B.A. in Mathematics from the University of
Wisconsin and his M.B.A. in Finance from the
University of Maryland. Mr. Holtz is a
certified public accountant.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Principal occupation, directorships with
Term Director public
Name and Age Expires Since companies, and other information
------------ -------- -------- ----------------------------------------
<S> <C> <C> <C>
Kenneth J. Rebeck (47).. 2001 April Kenneth J. Rebeck joined the Company in 1988
Annual 1991 and has been Senior Vice President of the
Meeting Technology Transfer Group since 1995 and a
director since 1991. From 1978 until 1988,
Mr. Rebeck was employed by General Physics
Corporation in a variety of professional and
management capacities, including Project
Director for a major NASA Pressure Vessel
Recertification Program and Chief Engineer
and Director, High Technology Activities.
Mr. Rebeck received his B.S. in Nuclear
Engineering from the State University of New
York at Buffalo, and his M.S. in Nuclear
Science and Engineering from Carnegie-Mellon
University, and he has Professional
Engineering licenses in Maryland, Michigan,
and Pennsylvania.
</TABLE>
Information Regarding the RWD Board, Committees, and Remuneration
During 1998, there were five meetings of the Board of Directors of RWD. Each
director attended at least 75 percent of the aggregate number of meetings of
the Board and Board committees of which he was a member.
The Audit Committee meets with RWD's independent accountants to review
whether satisfactory accounting procedures are being followed by RWD and
whether its internal accounting controls are adequate, to monitor nonaudit
services performed by the independent accountants, and to review fees charged
by the independent accountants. The Audit Committee also recommends to the RWD
Board the selection of independent accountants. During 1998, non-employee
directors, Dr. David J. Deutsch, Jerry P. Malec, and Bruce D. Alexander, were
the members of the Audit Committee. Two meetings of the Audit Committee were
held during 1998, and all members were in attendance.
The Compensation Committee establishes the compensation for executive
officers of RWD and generally reviews benefits and compensation for all
officers and employees. It also administers RWD's stock plans. During 1998,
non-employee directors, Jerry P. Malec and Bruce D. Alexander, were the
members of the Compensation Committee. Five meetings of the Compensation
Committee were held during 1998, and all members were in attendance. The
report of the Compensation Committee, required by the rules of the U.S.
Securities and Exchange Commission (the "SEC"), is included in this Proxy
Statement.
Directors who are not employees of RWD receive (a) an annual retainer, which
is paid at the beginning of the year in shares of Common Stock having a fair
market value of $10,000 on the date of issuance; (b) $1,000 in cash for each
Board of Directors and Board Committee meeting attended; and (c) cash
reimbursement for expenses incurred in connection with their service as
directors.
In addition, upon their first election to the Board of Directors, each
director who is not an employee of the Company is granted an option to
purchase 12,000 shares of Common Stock under the Company's stock option plan.
These options vest ratably over a three-year period beginning one year after
the date of grant and have an exercise price equal to the fair market value of
the Common Stock on the date of grant. Each such non-employee director is also
eligible to receive additional options at the end of each calendar year. In
1998, there were no options to purchase shares of RWD Common Stock granted to
non-employee directors.
Compensation Committee Interlocks and Insider Participation in Compensation
- ---------------------------------------------------------------------------
Decisions
- ---------
None of the directors serving on the Compensation Committee is an employee
of RWD, and neither the Chief Executive Officer nor any of the Named Executive
Officers (as defined below) has served on the Compensation Committee. No
director or executive officer of RWD is a director or executive officer of any
other corporation that has a director or executive officer who is also a
director or board committee member of RWD.
6
<PAGE>
Compensation of Executive Officers
- ----------------------------------
Compensation of Executive Officers. The following table sets forth certain
information with respect to the annual and long-term compensation for the last
three fiscal years of the Chief Executive Officer and the four other highest
paid executive officers (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
---------------------------------- ----------------
Number of Shares
Name and Principal Underlying All Other
Position Year Salary Bonus Other(1) Options Compensation(4)
- ------------------------ ---- -------- -------- ----------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Dr. Robert W. Deutsch... 1998 $150,000 $450,000 $ -- -- $ 7,500
Chairman of the Board, 1997 150,000 400,000 11,606,745(2) -- 8,154
Chief
Executive Officer 1996 150,000 250,000 489,476(3) -- 10,181
John H. Beakes.......... 1998 275,000 150,000 -- -- 13,280
President and Chief 1997 220,000 100,000 504,660(2) -- 13,563
Operating
Officer 1996 220,000 75,000 21,284(3) -- 16,552
Kenneth J. Rebeck....... 1998 180,000 60,000 -- 20,000 10,066
Senior Vice President 1997 150,000 35,000 -- 15,000 9,611
1996 150,000 45,000 -- 15,000 9,493
Deborah T. Ung.......... 1998 125,000 75,000 -- 25,000 6,865
Senior Vice President 1997 100,000 35,000 -- 15,000 5,425
1996 100,000 25,000 -- 13,500 5,408
Jeffrey W. Wendel....... 1998 195,000 60,000 -- 20,000 9,148
Senior Vice President 1997 150,000 50,000 102(2) 20,000 8,662
1996 100,000 30,000 -- 30,000 5,558
</TABLE>
- --------
(1) The Company also provides certain perquisites and other personal
benefits. The aggregate dollar cost to the Company of such perquisites
and other benefits in each of the years represented did not exceed the
lesser of $50,000 or 10 percent of the amount reflected in the Salary and
Bonus columns for any of the Named Executive Officers.
(2) Distributions to S corporation shareholders of earnings of the Company for
periods prior to conversion from S corporation to C corporation status not
previously distributed.
(3) Represents S corporation dividends to enable the recipients to pay income
tax on the Company's earnings.
(4) Includes income deemed received for life insurance premiums as well as
contributions to the Company's 401(k) Plan paid by the Company on behalf
of each of the Named Executive Officers.
7
<PAGE>
Option Grants in the Last Fiscal Year. The following table sets forth
information regarding options to purchase shares of the Common Stock granted
to the Named Executive Officers during the last fiscal year.
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------
Number of Percent of Potential Realized
Secutities Total Value at Assumed
Underlying Options Exercise Annual Rates of Stock
Options Granted Price Per Price Appreciation
Name Granted to Employees Share(1) Expiration Date for Option Term(2)
- ------------------------ ---------- ------------ --------- --------------- ---------------------
5% 10%
---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dr. Robert W. Deutsch... -- -- -- -- -- --
John H. Beakes.......... -- -- -- -- -- --
Kenneth J. Rebeck....... 20,000 1.9% $17.375 12/18/2008 $ 218,541 $ 553,826
Deborah T. Ung.......... 25,000 2.4 17.375 12/18/2008 273,176 692,282
Jeffrey W. Wendel....... 20,000 1.9 17.375 12/18/2008 218,541 553,826
</TABLE>
- --------
(1) The exercise price equaled the fair market value of the Common Stock as
determined by the Board of Directors on the date of grant. The exercise
price is payable in cash or by delivery of shares of Common Stock having a
fair value equal to the exercise price of options exercised.
(2) The assumed annual rates of appreciation of 5 percent and 10 percent would
result in the price of the Common Stock increasing to $28.30 and $45.07,
respectively, from the exercise price of $17.375 per share during the 10-
year term of the options. The vesting of unvested options may be
accelerated at any time by the Company. The 5 percent and 10 percent
assumed annual rates of stock price appreciation used to calculate
potential gains to optionees are mandated by the rules of the Securities
and Exchange Commission. The potential realizable value does not represent
the Company's prediction of its stock price performance. There can be no
assurance that the stock price will actually appreciate over the 10-year
option term at the assumed 5 percent and 10 percent levels or at any other
level.
Option Exercises in Last Fiscal Year and Fiscal Year-End Holdings. The
following table sets forth information concerning the number and exercise
price of the options to purchase Common Stock exercised by the Named Executive
Officers during the last fiscal year and the number and value of unexercised
options to purchase Common Stock held at the end of the fiscal year by the
Named Executive Officers. Value is considered to be, in the case of exercised
options, the difference between exercise price and market price on the date of
exercise, and, in the case of unexercised options and exercisable options, the
difference between exercise price and market price on December 31, 1998.
<TABLE>
<CAPTION>
Value of
Number of Unexercised In-
Securities the-Money
Underlying Options at Year-
Shares Acquired Options atYear- End Exercisable/
Name Upon Exercise Value Realized End(1) Unexercisable(1)
- ------------------------ --------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
Dr. Robert W. Deutsch... -- -- -- --
John H. Beakes.......... 10,000 $198,333 94,400(E) $1,974,567(E)
24,600(U) 512,975(U)
Kenneth J. Rebeck....... 35,000 741,042 67,000(E) 1,381,208(E)
83,000(U) 1,047,125(U)
Deborah T. Ung.......... 23,000 483,479 25,000(E) 506,358(E)
67,000(U) 638,850(U)
Jeffrey W. Wendel....... 1,000 16,063 6,800(E) 110,250(E)
69,400(U) 608,875(U)
</TABLE>
- --------
(1) (E) = Exercisable; (U) = Unexercisable.
8
<PAGE>
Compensation Committee Report on Executive Compensation
- -------------------------------------------------------
Compensation Committee Overview. The Committee was established following the
Company's initial public offering in June 1997. The function of the
Compensation Committee is to advise the Board of Directors regarding overall
compensation policies and recommend specific compensation for the Company's
two (2) most senior executives. The Compensation Committee is responsible for
providing guidance to the Board regarding broad compensation issues, including
salaries, bonuses, option grants, benefits, and other remuneration for
officers and employees of the Company. The Compensation Committee's
responsibilities also include administering the Company's stock option plans,
employee stock purchase plans, and 401(k) plan. The Compensation Committee is
composed of Messrs. Bruce D. Alexander and Jerry P. Malec (Chair), who are
independent directors, having never been officers or employees of the Company.
At its meetings in 1998, the Committee discussed the full range of
compensation issues facing the Company, the various recommendations of
management, the general marketplace for talented managers, and compensation
market conditions. In 1998, the Committee again consulted a leading
compensation consulting firm to advise the Committee on the Company's
executive compensation programs, including the salary, bonus, and equity
compensation of the Company's officers. The consultants' advice provides
benchmarks for comparison of executive compensation to that of other companies
whose business is similar in nature to the Company's or who may compete with
the Company for executive talent. The compensation consultants advise the
Committee based on data that includes publicly available proxy materials,
industry survey data, and the consultants' experience in assisting public and
private companies in establishing management compensation plans.
Compensation Philosophy. The Company applies a consistent philosophy to
compensation for all employees, including senior management. This philosophy
is based upon the premise that the success of the Company results from the
efforts of each employee and that a cooperative, team-oriented environment is
an essential part of the Company's culture and success. The Company believes
strongly in the importance of rewarding employees for the common success of
the organization. Consequently, the Company places particular emphasis on (a)
broad employee equity participation through the use of stock options with
long-term vesting, and (b) annual cash bonuses linked to overall Company
profitability as integral parts of its compensation structure. The
Compensation Committee continues to believe that this approach and philosophy
are appropriate.
Executive Compensation. The principal elements of the Company's executive
compensation program consist of both annual compensation (primarily base
salary and annual incentive cash bonuses) and long-term incentive compensation
in the form of stock options with extended vesting periods. Base salary,
annual cash bonuses, and option grants are determined on the basis of the
overall financial performance of the Company and the performance of the
individual officer. In addition, the Committee and Board utilized the survey
data provided by the compensation consultants in establishing compensation
levels for officers of the Company.
Chief Executive Officer and Chief Operating Officer Compensation. Dr. Robert
W. Deutsch is founder and Mr. John H. Beakes is co-founder of RWD. Dr. Deutsch
serves as Chairman and Chief Executive Officer of the Company. Mr. Beakes has
served as Chief Operating Officer since the Company was founded and has served
as President since 1995.
In determining the appropriate base salary levels for the Company's CEO and
COO, the Compensation Committee reviewed the performance of each officer and
of the Company and utilized the analysis of executive compensation provided by
the compensation consultants. Based on this review, the Compensation Committee
approved base salaries of $150,000 for the Company's CEO and $350,000 for the
Company's COO, effective January 1999. The CEO's salary reflects a higher
proportion of compensation at risk through a discretionary annual cash bonus.
In addition to base salaries, officers of the Company are eligible to
receive annual cash bonuses at the discretion of the Compensation Committee.
Cash bonuses for officers are determined at year end on the basis of the
overall financial performance of the Company and the performance of the
individual officer. In addition to these objectives, the CEO's bonus is also
linked to the annual increase in the Company's profitability. Based on these
factors and utilizing the analysis of executive compensation provided by the
compensation consultants, the Compensation Committee approved year-end bonuses
of $450,000 for the Company's CEO and $150,000 for the Company's COO for 1998.
9
<PAGE>
Long-Term Incentive Compensation. During 1998, the Company granted stock
options for 1,038,750 shares to 687 directors, officers, and employees of the
Company. Each of the founders owns a significant percentage of the Company's
Common Stock, and, therefore, each of them participates proportionately in any
increase in stockholder value. The Compensation Committee believes that the
founders' existing equity ownership and, in the case of Mr. Beakes, previously
granted stock options sufficiently link their interests to the financial
success of the Company. Therefore, during 1999, neither of the founders was
granted options under the Company's stock option plan.
Jerry P. Malec
Bruce D. Alexander
10
<PAGE>
Stock Performance Table
- -----------------------
RWD is required by the SEC to provide a five-year comparison of the
cumulative total stockholder return on RWD Common Stock compared with that of
a broad equity market index and either a published industry index or a RWD-
constructed peer group index.
The following chart compares the cumulative total stockholder return on RWD
Common Stock during the period beginning June 19, 1997, (the date of RWD's
initial public offering) and ending December 31, 1998, with the cumulative
total return on the Nasdaq Composite (U.S.) and Nasdaq Computer and Data
Processing indices. The comparison assumes $100 was invested on June 19, 1997,
in RWD Common Stock and in each of the foregoing indices. It also assumes
reinvestment of any dividends.
RWD does not make, nor does it endorse, any predictions as to future stock
performance.
[GRAPH APPEARS HERE]
11
<PAGE>
RWD Management
The following table sets forth information regarding the executive officers,
directors, and other significant employees of RWD:
<TABLE>
<CAPTION>
Executive Officers and
Directors: Age Position
- ---------------------- --- --------
<S> <C> <C>
Dr. Robert W. Deutsch......... 75 Chairman of the Board of Directors, Chief
Executive Officer
John H. Beakes................ 56 President, Chief Operating Officer,
Director
Robert T. O'Connell........... 60 Senior Vice President, Strategic Business
Planning, Director
Kenneth J. Rebeck............. 47 Senior Vice President--Technology Transfer
Group, Chief Engineer, Director
Deborah T. Ung................ 36 Senior Vice President--Enterprise Resources
Planning Services Group, Director
Jeffrey W. Wendel............. 44 Senior Vice President--Information
Technology, Group, Director
Ronald E. Holtz............... 41 Vice President, Chief Financial Officer,
Director
Bruce D. Alexander............ 55 Director
Dr. David J. Deutsch.......... 45 Director
Jerry P. Malec................ 56 Director
Key Employees:
- --------------
Johnny T. Baker............... 40 Vice President --Business Development
Daniel A. Cantwell............ 46 Vice President--Manufacturing Training &
Performance Support
Richard M. Contel............. 50 Vice President--Enterprise Resource
Planning Services
Robert Danna.................. 47 Vice President--Enterprise Resource
Planning Services
Robert B. Gosline, Jr. ....... 56 Vice President, Chief Information Officer
John E. Lapolla............... 45 Senior Vice President--Manufacturing
Performance Support Group
Wade A. Martin................ 40 Vice President--Performance Technology
Services
Vincent Marucci, Jr. ......... 41 Vice President--Information Technology
Dana M. Sohr.................. 39 Vice President--Enterprise Resource
Planning Services
</TABLE>
Information relating to RWD's key employees is set forth below. See
"Information Concerning Nominees" and "Information Concerning Continuing
Directors" above for information relating to the executive officers and
directors of RWD.
Johnny T. Baker joined the Company in 1993 and serves as Vice President of
Business Development. Prior to joining RWD, Mr. Baker was employed by Apple
Computer from 1988 to 1993, where his most recent assignment was serving as
the Special Assistant to the Vice President for Apple's Large Business and
Government Division. Mr. Baker received his B.A. in Management/Information
Systems from Texas Tech University.
Daniel A. Cantwell joined the Company in 1991 and serves as Vice President
of the Manufacturing Training & Performance Support Division. Prior to joining
the Company, Mr. Cantwell was employed by Chrysler from 1984 to 1991 as a
Senior Technical Training Specialist. Mr. Cantwell received his B.A.S. in
Robotics and Flexible Automation from Sienna Heights College.
12
<PAGE>
Richard M. Contel joined the Company in 1991 and serves as Vice President of
the ERP Implementation Services Division. This division provides a full range
of support services for companies implementing ERP software. During his career
with RWD, Mr. Contel has been a director in the ERP, Electronic Document
Management, and Information Technology service areas. Before joining RWD, he
worked for the B.F. Goodrich Company for 16 years, where he had broad
management responsibilities in production and maintenance involving operations
management, organizational development, productivity improvement, waste
reduction, and systems development. Mr. Contel has a bachelor's degree in
mechanical engineering from Lafayette College.
Robert Danna joined the Company in 1997 and serves as a Vice President in
the Enterprise Resource Planning Services Group. Mr. Danna has more than 25
years experience in engineering and technical training. From 1980 to 1997, he
served in a variety of management positions, including Senior Vice President
of the management and technical services division of Resource Management
International, Inc., Executive Vice President and member of the board of
directors of General Physics Corporation, and Executive Vice President and
member of the board of directors of GPS Technologies, Inc. He served on active
duty in the United States Navy from 1975 through 1980, and was in the Naval
Reserves from 1980 through 1987. Mr. Danna was also a lecturer in the physics
department of Hunter College of the City University of New York from 1973
through 1975. He holds bachelor and masters degrees in physics from Hunter
College of the City University of New York and a masters degree in civil
engineering from the University of Central Florida. Mr. Danna is a registered
professional engineer in Maryland and California. He has published or
presented more than 25 papers on a variety of technical and management topics.
Robert B. Gosline, Jr. joined the Company in 1988 and serves as Vice
President and Chief Information Officer, where he directs activities in
strategic information system planning and implementation. Prior to joining the
Company, Mr. Gosline was employed by General Physics from 1975 to 1988, and
prior thereto served as a nuclear submarine officer in the U.S. Navy. Mr.
Gosline received his M.S. in Computer Science from The Johns Hopkins
University and his B.S. from the U.S. Naval Academy.
John E. Lapolla joined the Company in 1988, has been Senior Vice President
of Manufacturing Performance Support since 1995. From 1970 until 1988, Mr.
Lapolla was employed by General Motors Corporation, most recently as
Divisional New Technology Training Coordinator responsible for technical
training for 35 manufacturing plants. Mr. Lapolla received his B.S. in
Industrial Engineering from the General Motors Institute and is a senior
member of the Society of Manufacturing Engineers.
Wade A. Martin joined the Company in 1990 and serves as Vice President of
the Performance Technology Services Division. Prior to joining the Company,
Mr. Martin was employed by General Physics from 1983 to 1990 as Supervisor of
Maintenance Engineering. From 1977 to 1983, Mr. Martin served on the USS
Eisenhower, a nuclear aircraft carrier. Mr. Martin received his A.S. in
Engineering Technology from the State University of New York at Albany and is
a graduate of the U.S. Navy Nuclear Power Program.
Vincent Marucci, Jr. joined the Company in 1992 and serves as Vice President
of the Information Technology Division. Prior to joining the Company, Mr.
Marucci served as an active duty U.S. Army officer. His assignments included
information systems design and development for one of the Army's Artificial
Intelligence Centers and as an instructor in mathematics and computer science
at the U.S. Military Academy. Mr. Marucci received an M.S. in Computer Science
and an M.S. in Operations Research from Stanford University and his B.S. from
the U.S. Military Academy.
Dana M. Sohr joined the Company in 1993 and serves as a Vice President in
the Enterprise Resource Planning Services Division. Mr. Sohr has 16 years of
experience supporting the implementation of large information systems, and for
the past eight years has concentrated his activities on SAP software
implementations. He has been responsible for delivering high-quality training
and support solutions to customers such as Dow Chemical, Goodyear, Polaroid,
and Tenneco Automotive. He currently has primary responsibility for managing
RWD's relationship with SAP America. Mr. Sohr received his B.A. degree from
the University of Maryland.
Dr. David J. Deutsch is Dr. Robert W. Deutsch's son. There are no other
family relationships among any of the key employees, executive officers, or
directors of the Company. The executive officers and key employees of RWD are
elected by the RWD Board on an annual basis and serve at the discretion of the
RWD Board.
13
<PAGE>
Stock Ownership of Certain Beneficial Owners
The following table sets forth information as of December 31, 1998, with
respect to those persons, in addition to Dr. Robert Deutsch, known to the
Company to be the beneficial owners of more than 5 percent of the issued and
outstanding Common Stock of the Company.
<TABLE>
<CAPTION>
Number of Shares
Name and Address of the Beneficial Owner Beneficially Owned Percent of Class
- ---------------------------------------- ------------------ ----------------
<S> <C> <C>
William Blair & Company, L.L.C.(1)......... 770,525(2) 5.4%
222 West Adams Street
Chicago, Illinois 60606
</TABLE>
- --------
(1) The information set forth above was provided to the Company in the
beneficial owner's Schedule 13G dated March 17, 1999, Reporting as a
Broker-Dealer and an Investment Advisor in accordance with Rule 13d-1(b).
(2) Sole voting power in respect of 431,700 shares and investment power in
respect of all shares.
Stock Ownership of Directors and Management
The following table sets forth information as of March 9, 1999, with respect
to the beneficial ownership of the Common Stock (including shares issuable
upon the exercise of outstanding options that are exercisable as of that date
or within 60 days thereafter) by (a) each of the directors (and nominees) of
the Company; (b) the Chief Executive Officer and each of the other Named
Executive Officers; and (c) all directors and executive officers as a group.
Unless otherwise indicated, each named person exercises sole voting and
investment power.
<TABLE>
<CAPTION>
Shares Beneficially
Owned
-------------------
Name(1) Number Percent
- ------- ----------- -------
<S> <C> <C>
Robert W. Deutsch(2)........................................ 9,270,000 61.6
John H. Beakes(3)........................................... 541,445 3.6
Robert T. O'Connell(5)...................................... 45,000 *
Kenneth J. Rebeck(5)........................................ 91,623 *
Deborah T. Ung(5)........................................... 38,500 *
Jeffrey W. Wendel(5)........................................ 23,075 *
Ronald E. Holtz (5)......................................... 7,859 *
Bruce D. Alexander(5)....................................... 7,044 *
David J. Deutsch(4)......................................... 620,814 4.1
Jerry P. Malec(5)........................................... 6,414 *
All directors and officers as a group (10 persons).......... 10,651,774 69.3
</TABLE>
- --------
* Less than 1 percent.
(1) The address of each stockholder listed in the table is c/o RWD
Technologies, Inc., 10480 Little Patuxent Parkway, Suite 1200, Columbia,
Maryland 21044-3530, Attention: Chief Financial Officer.
(2) Includes 450,000 shares owned by Mrs. Florence Deutsch, Dr. Robert
Deutsch's wife, as to which Dr. Robert Deutsch disclaims beneficial
ownership.
(3) Includes 111,200 shares issuable upon exercise of currently exercisable
options. Also includes 25,000 shares owned by Mrs. Rosemary Beakes, Mr.
Beakes' wife, 6,400 shares owned by an adult child of Mr. Beakes, and
156,777 shares held in grantor retained annuity trusts, as to all of which
Mr. Beakes disclaims beneficial ownership.
(4) Includes an aggregate of 450,000 shares held in trusts for the children of
Mrs. Jane Brown (Dr. Robert W. Deutsch's daughter) and Dr. David Deutsch,
for which Mrs. Jane Brown and Dr. David Deutsch serve as co-trustees. Also
includes 4,000 shares issuable upon exercise of currently exercisable
options.
(5) Includes 30,000, 91,000, 38,500, 18,600, 6,100, 4,000, and 4,000 shares
issuable upon exercise of currently exercisable options held by each of
Messrs. O'Connell, Rebeck, Ms. Ung, Messrs. Wendel, Holtz, Alexander, and
Malec, respectively.
14
<PAGE>
Employment Agreements
Prior to the Company's June 1997 initial public offering, the Company
entered into Employment Agreements with Dr. Robert W. Deutsch and each of
Messrs. Beakes, Lapolla, Rebeck, and Wendel. The Company entered into a
similar agreement with Ms. Ung in early 1999 based on her promotion to Senior
Vice President. Each of the Employment Agreements has an initial term of 3
years and is automatically renewed thereafter for successive 1-year terms
until terminated by either the Company or the employee. The Employment
Agreements provide for initial annual salaries, subject to annual adjustment
at the discretion of the Company's Compensation Committee, and provide for
annual cash bonuses in amounts determined by the Company's Compensation
Committee. The Employment Agreements contain confidentiality provisions and
one-year covenants-not-to-compete following termination or expiration of
employment (as defined in the Employment Agreements). In the event of a
"change in control" of the Company (as defined in the Employment Agreements)
followed by the termination of employment by the employee for "good reason"
(as defined in the Employment Agreements), the affected employee would be
entitled to three times his or her average annual compensation during the last
three complete years prior to such change in control.
Certain Relationships and Related Transactions
No material related party transactions occurred during 1998.
Compliance with Section 16(a) of the Securities Exchange Act of 1934, as
amended
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who beneficially
own 10 percent or more of the Company's Common Stock (the "Reporting Persons")
to file reports regarding their RWD Common Stock ownership and changes in
ownership with the SEC. Based solely on a review of the copies of such forms
furnished to RWD and written representations from the Reporting Persons, the
Company believes that during 1998, the Reporting Persons complied with all
Section 16(a) reporting requirements applicable to them, except with respect
to the March 1998 Form 4 report for Mr. Jeffrey W. Wendel which was filed
late.
II. APPROVAL OF THE COMPANY'S AMENDED & RESTATED EMPLOYEE STOCK PURCHASE PLAN
The Board proposes that the stockholders of the Company approve the adoption
of the Amended and Restated ESPP. The following is a fair and complete summary
of the Amended and Restated ESPP as proposed; it is qualified in its entirety
by reference to the full text of the Amended and Restated ESPP, which appears
as Exhibit A to this Proxy Statement.
The Company currently maintains the 1997 Employee Stock Purchase Plan (the
"1997 ESPP"), which the stockholders approved at the 1997 Annual Meeting of
Stockholders. A total of 175,000 shares of RWD Common Stock were reserved for
issuance under the 1997 ESPP, of which 37,881 have been issued as of March 9,
1999. On February 17, 1999, the Board of Directors approved a complete
amendment and restatement of the 1997 ESPP in the form of the Amended and
Restated ESPP in order to modify certain administrative provisions. The Board
also increased the number of shares of RWD Common Stock available for issuance
to participants under the plan by 300,000 shares, based on the Company's
expectation that the substantial majority of the shares remaining under the
1997 ESPP would be issued to participants prior to the 2000 Annual
Shareholders' meeting. The Amended and Restated ESPP, as so amended and
restated, will be effective May 1, 1999, subject to approval by the
stockholders. The shares issuable under the Amended and Restated ESPP, in the
Board's discretion, may be authorized but unissued shares, shares purchased on
the open market, or shares from any other proper source. The 1997 ESPP had
provided that all shares issuable under the plan would be from authorized but
unissued shares.
15
<PAGE>
The plan provides employees with an opportunity to purchase RWD Common Stock
at a discount through payroll deductions and thereby increase their interest
in the Company's growth and success. All regular full-time employees of the
Company and its subsidiaries, including officers (with the limited exception
of those having, directly or indirectly, 5 percent or more of the total
combined voting power or value of the stock of the Company), and all other
employees whose customary employment is for more than 20 hours per week and at
least five months per year are eligible to participate in the Amended and
Restated ESPP. Non-employee directors are not eligible. The Amended and
Restated ESPP is administered under the direction of the Compensation
Committee of the Board. The Compensation Committee has discretion, without
seeking stockholder approval, to permit employees working 20 or fewer hours
per week or fewer than five months per year to participate or to exclude
additional categories of employees within statutory limits. In addition, the
Compensation Committee has discretion to include, exclude or terminate
participation of employees of any subsidiary at any time if it deems it
advisable to do so. The Company estimates that approximately 1,050 employees
will be eligible to participate in the Amended and Restated ESPP as of May 1,
1999.
Each offering under the Amended and Restated ESPP is for a six-month period
commencing on the first business day on or after May 1st or November 1st of
each calendar year (the "Offering Period"), unless the Compensation Committee
determines otherwise. A special Offering Period of three months' duration
commences on the first business day on or after each February 1st and August
1st for those individuals who first become eligible under the plan after
November 1st or May 1st, respectively. The 1997 ESPP had provided for special
Offering Periods that commenced on the first day of each calendar quarter for
newly eligible employees. Eligible employees must enroll on or before the
first day of an Offering Period and are re-enrolled automatically for
subsequent Offering Periods unless they withdraw their participation or
otherwise become ineligible.
Participating employees may contribute from 1 percent to 10 percent, or such
other limit as the Compensation Committee may determine from time to time, of
base salary and overtime pay through payroll deductions. Participating
employees are permitted to decrease their contribution percentage at any time
or discontinue contributions once during any Offering Period, but are not
permitted to increase their contribution percentage until the start of a
subsequent Offering Period. Participants may withdraw at any time and receive
a refund of their contributions. On the last business day of each Offering
Period (the "Exercise Date"), the employee's accumulated contributions are
applied to the purchase of shares of RWD Common Stock at a purchase price per
share equal to 85 percent of the stock's closing price on the first day of the
Offering Period or on the Exercise Date, whichever is lower. As of March 9,
1999, the closing price for a share of RWD Common Stock, as quoted on The
Nasdaq Stock Market, was $14.375. The maximum aggregate purchases which an
employee may make in a single calendar year is $25,000 worth of stock, based
on the fair market value of RWD Common Stock determined as of the first day of
the applicable Offering Periods in which the employee participates.
Because participation in the Amended and Restated ESPP and the level of
payroll deductions made by participants during each Offering Period, up to the
specified limit, is in the discretion of eligible employees, and because the
purchase price for shares under the Amended and Restated ESPP cannot be
determined until the close of each Offering Period, the amount of Common Stock
that will be received, and the amount of discount that will be realized, by
any participant or groups of participants if the Amended and Restated ESPP is
approved is not determinable. For the fiscal year ended December 31, 1998, the
benefits or amounts received by or allocated to each of the following
participants or groups of participants under the 1997 ESPP were as follows:
16
<PAGE>
Shares Purchased during 1998 under the 1997 ESPP:
- ------------------------------------------------
<TABLE>
<CAPTION>
Dollar
Value ($) Number of
of Discount Shares Purchased
----------- ----------------
<S> <C> <C>
Total all eligible persons......................... $105,652 37,881
Named Executive Officers:
Dr. Robert W. Deutsch............................ 0 0
John H. Beakes................................... 0 0
Kenneth J. Rebeck................................ 1,738 623
Deborah T. Ung................................... 0 0
Jeffrey W. Wendel................................ 1,883 675
Subtotal Named Executive Officers............... 3,621 1,298
All Executive Officers............................. 4,064 1,457
Non-Executive Director Group(1).................... 0 0
Non-Executive Officer Employee Group(2)............ 102,032 36,583
</TABLE>
- --------
(1) Includes only non-employee directors. Non-employee directors are not
eligible to participate in the plan.
(2) All eligible employees including officers who are not Named Executive
Officers.
The Amended and Restated ESPP is of indefinite duration, subject to
termination by the Board of Directors at any time. The 1997 ESPP provided for
automatic termination on the fifth anniversary of the plan's adoption by the
Board or, if earlier, at such time as all shares of RWD Common Stock reserved
for issuance under the plan have been issued.
The Amended and Restated ESPP is intended to qualify as an "employee stock
purchase plan" under Section 423 of the Internal Revenue Code of 1986, as
amended. As such, neither the grant of rights to purchase shares under each
Offering Period, nor the purchase of shares on each Exercise Date under the
Amended and Restated ESPP, will result in taxable income to the employee or a
deduction to the Company. If the employee sells any shares acquired under the
Amended and Restated ESPP (or transfers them by gift) within two years after
the commencement date of the Offering Period under which the shares are
purchased or within one year after the shares are purchased, there will be a
disqualifying disposition and the employee will realize ordinary income. The
Company will have a corresponding tax deduction at the time of the sale or
transfer in a disqualifying disposition for the ordinary income recognized by
the employee in an amount equal to the difference between the employee's
purchase price for the shares and their fair market value on the date of
purchase. Any gain realized in excess of that ordinary income will be capital
gain. If an employee disposes of shares acquired under the Amended and
Restated ESPP other than in a disqualifying disposition, the employee
recognizes (i) ordinary income equal to the difference between the employee's
purchase price and the fair market value of the shares on the commencement
date of the Offering Period under which the shares were purchased, or, if
less, the difference between the amount realized by the employee in the
disposition and the purchase price of the shares, and (ii) a long-term capital
gain for any additional gain realized by the employee in the disposition. The
Company will not have a corresponding tax deduction for the ordinary income
recognized by the employee if there is not a disqualifying disposition.
The Board of Directors recommends that stockholders vote FOR the approval of
the Company's Amended & Restated Employee Stock Purchase Plan.
III. AUDITOR CONFIRMATION
The RWD Board of Directors, pursuant to the recommendation of its Audit
Committee, has selected Arthur Andersen, LLP, to examine and audit the
financial statements of RWD for the fiscal year ending December 31, 1999.
Arthur Andersen, LLP, has served as independent auditors of RWD since 1989. A
partner of the firm will be present at the Annual Meeting and available to
respond to appropriate questions and will have an opportunity to make a
statement if he desires to do so.
17
<PAGE>
In 1998, Arthur Andersen, LLP, performed various professional services for
RWD. These services included completion of the examination of 1997 financial
statements for RWD, other review work of required filings with the Securities
and Exchange Commission, preliminary work on the examination of fiscal year
1998 financial statements, preparation of corporate tax returns, and other
consultation with RWD personnel on accounting and related matters.
The Board of Directors recommends that stockholders vote FOR ratification of
the selection of Arthur Andersen, LLP, as independent auditors of RWD for the
fiscal year ending December 31, 1999.
IV. OTHER MATTERS
The Board of Directors of the Company does not know of any matters other
than those described in this Proxy Statement that will be presented for action
at the Annual Meeting. If any other matters are properly brought before the
Annual Meeting, the persons named in the accompanying proxies will vote the
shares represented by such proxies on such matters as instructed by the Board
of Directors of the Company, who have instructed the proxies to vote in
accordance with the proxies' own best judgment in the absence of express
instruction from the Board.
STOCKHOLDERS PROPOSALS
Stockholders who intend to have a proposal considered for inclusion in the
Company's proxy materials for presentation at the 2000 Annual Meeting of
Stockholders must submit the proposal to the Company no later than December 4,
1999. Stockholders who intend to present a proposal at the 2000 Annual Meeting
of Stockholders without inclusion of such proposal in the Company's proxy
materials are required to provide notice of such proposal to the Company no
later than February 17, 2000. The Company reserves the right to reject, rule
out of order, or take other appropriate action with respect to any proposal
that does not comply with these and other applicable requirements.
MISCELLANEOUS
A copy of RWD's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, as filed with the SEC, excluding certain exhibits thereto,
may be obtained without charge, by writing Investor Relations, RWD
Technologies, Inc., 10480 Little Patuxent Parkway, Suite 1200, Columbia,
Maryland 21046-3530 or by telephoning (410) 730-4377.
BY ORDER OF THE BOARD OF DIRECTORS
Ronald E. Holtz
Secretary
Columbia, Maryland
April 2, 1999
18
<PAGE>
Exhibit A
RWD TECHNOLOGIES, INC.
AMENDED & RESTATED EMPLOYEE STOCK PURCHASE PLAN
The purpose of the Employee Stock Purchase Plan (the "Plan") is to provide
eligible employees of RWD Technologies, Inc. (the "Company") and its
subsidiaries with opportunities to purchase, through payroll deductions,
shares of the Company's Common Stock, $0.10 par value per share (the "Common
Stock"). The Plan is intended to benefit the Company by increasing the
employees' interest in the Company's growth and success and encouraging
employees to remain in the employ of the Company or its subsidiaries. The Plan
is intended to constitute an "employee stock purchase plan" within the meaning
of section 423 of the Internal Revenue Code of 1986, as amended (the "Code"),
and shall be so applied and interpreted. The Plan, as set forth herein, is an
amendment and restatement, and a continuation, of the Plan as initially
adopted by the Company on February 11, 1997.
1. Shares Subject to the Plan. The number of shares reserved for issuance
--------------------------
that are remaining under the Plan immediately prior to this amendment and
restatement is 137,119. Subject to adjustment as provided herein, the
aggregate number of shares of Common Stock that may be made available for
purchase under the Plan pursuant to this amendment and restatement, in
addition to the remaining shares, is 300,000 shares. The shares issuable under
the Plan may, in the discretion of the Board of Directors of the Company (the
"Board"), be authorized but unissued shares of Common Stock, shares purchased
on the open market, or shares from any other proper source.
2. Administration. The Plan shall be administered under the direction of the
--------------
Compensation Committee of the Board (the "Committee"). The Committee has
authority to interpret the Plan, to make, amend and rescind rules and
regulations for the administration of the Plan, and to make all other
determinations necessary or desirable in administering the Plan, all of which
will be final and conclusive. No member of the Board or Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any Right (as defined in Section 8 below) granted hereunder.
3. Eligibility. All employees of the Company or any subsidiary of the
-----------
Company (as defined in Code section 424(f)), now or hereafter existing, are
eligible to participate in the Plan, except (a) employees whose customary
------
employment is for less than five months in any calendar year; (b) employees
whose customary employment is 20 hours or less per week; and (c) employees in
such other categories that the Committee, in its discretion, prior to the
commencement of an Offering Period (as defined in Section 7 below), excludes
from participation in such Offering Period consistent with Code section 423.
The Committee may expand eligibility for the Plan to the categories of
employees specified in subclause (a) or (b) at any time in its discretion
without shareholder approval. The Committee at any time, if it deems it
advisable to do so, may include, exclude, or terminate the participation of
the employees of a particular subsidiary.
4. Participation. An eligible employee may become a participating employee
-------------
in the Plan by completing an election to participate in the Plan on a form
provided by the Company and submitting that form to the Company's Stock
Administrator prior to the first day of the Offering Period or in accordance
with such rules as may be established by the Committee from time to time. The
form will authorize a regular payroll deduction from the Compensation (as
defined below) received by the participating employee during the Offering
Period (as defined below in Section 7) and will authorize the purchase of
shares of Common Stock for the participating employee's account in accordance
with the terms of the Plan.
Unless the Committee determines otherwise, enrollment will become effective
upon the first day of the first Offering Period that commences after the
Company's receipt of the form. Unless an employee files a new form or
withdraws from the Plan, the participating employee's deductions and purchases
will continue at the same percentage rate of Compensation for future Offering
Periods under the Plan as long as the Plan remains in effect and the employee
remains eligible to participate.
<PAGE>
The term "Compensation" means the participant's base salary and overtime pay
received during an Offering Period, determined without regard to salary
reduction contributions under arrangements pursuant to section 401(k) or
section 125 of the Code.
5. Payroll Deductions; Withdrawals From Accounts.
---------------------------------------------
(a) Payroll Deductions. The Company will maintain payroll deduction accounts
------------------
for all participating employees. With respect to any Offering Period under
this Plan, an eligible employee may authorize a payroll deduction to be made
on each payday during the Offering Period in any whole number percentage, up
to a maximum of 10 percent or such other limit as set by the Committee from
time to time, of such employee's Compensation on each such payday. Payroll
deductions with respect to an Offering Period shall commence on the first
payroll paid within the Offering Period and shall end on the last payroll paid
on or prior to the last Trading Day (as defined in Section 8) of such Offering
Period, unless sooner terminated by the employee as provided herein.
(b) Changes in Payroll Deductions for Current Offering Period. An employee
---------------------------------------------------------
may decrease or discontinue his or her payroll deduction at any time during an
Offering Period by submitting an election change form provided by the Company
to the Company's Stock Administrator. However, an employee may not increase
his or her payroll deduction during an Offering Period. If an employee elects
to discontinue payroll deductions during an Offering Period, but does not
elect to withdraw funds pursuant to subsection 5(d), funds deducted prior to
the election to discontinue payroll deductions will be applied to the purchase
of Common Stock pursuant to Section 9.
(c) Changes in Payroll Deductions for Future Offering Periods. An employee
---------------------------------------------------------
may increase or decrease his or her payroll deduction, to take effect on the
first day of the next Offering Period, by delivering to the Company's Stock
Administrator an election change form provided by the Company to the Company's
Stock Administrator prior to the first day of the next Offering Period and in
accordance with such rules as may be established by the Committee from time to
time.
(d) Withdrawals. Unless determined otherwise by the Committee, an employee
-----------
may on any one occasion during an Offering Period and for any reason withdraw
all of the balance accumulated in the employee's payroll deduction account;
partial withdrawals are not permitted. Any such withdrawal must be effected
prior to the close of business on the day immediately preceding the last
Trading Day (as defined in Section 8) of the Offering Period by delivering an
election change form to the Company's Stock Administrator. If the employee
withdraws his or her accumulated balance, the employee will thereby withdraw
from participation in the Offering and may not begin participation again
during the remainder of the Offering Period. Withdrawal of such balance will
not affect the employee's right to participate in any subsequent Offering
Period. An eligible employee must reenroll in order to participate in any
subsequent Offering Period in accordance with Section 4 and subsection 5(a).
6. Interest. Interest will not be paid on any employee payroll deduction
--------
accounts, unless the Committee determines otherwise, and, if the Committee so
determines, will only be paid in accordance with such rules as may be
established by the Committee from time to time.
7. Offering Periods. Rights granted pursuant to the Plan ("Offerings") are
----------------
made for an offering period (each, an "Offering Period"). The Offering Periods
of the Plan shall run consecutively and shall be of six months' duration
commencing on May 1st and November 1st of each year and ending on the last
Trading Day (as defined in Section 8) on or before April 30th and October 31st
of each year, unless determined otherwise by the Committee. The Committee may
change the duration of the Offering Periods with respect to Offerings without
shareholder approval; provided that such change is announced to eligible
-------- ----
employees prior to the scheduled beginning of the first Offering Period to be
affected, and further provided that no Offering Period shall have a duration
--- ------- -------- ----
in excess of 27 months.
2
<PAGE>
An eligible employee must be employed by the Company or a subsidiary within
the meaning of Code section 424(f) on the first Trading Day (as defined below
in Section 8) of an Offering Period in order to participate in that Offering
Period. However, unless the Committee determines otherwise, employees who
first become eligible to participate in the Plan after the first Trading Day
of an Offering Period may participate in a special Offering Period that
commences on the first Trading Day on or after the earlier of the February 1st
or August 1st coincident with or next following the date on which such
employee first becomes eligible to participate in the Plan ("Special Entry
Date") and ends on the earlier of the last Trading Day on or before the next
April 30th or October 31st. The Special Entry Date shall constitute "the first
Trading Day of the Offering Period" for all purposes under the Plan with
respect to such employee. An eligible employee must submit his or her election
form to the Company's Stock Administrator in accordance with Section 4 and
subsection 5(a) on or before the Special Entry Date.
8. Rights to Purchase Common Stock; Purchase Price.
-----------------------------------------------
Options to purchase shares of Common Stock will be granted (each, a "Right")
to participating employees as of the first Trading Day (as defined below) of
each Offering Period. (Each such Right shall be deemed to constitute an
"option" within the meaning of, and with respect to, all relevant law.) Each
Right shall represent a right to purchase on the last Trading Day of such
Offering Period, at the Purchase Price hereinafter provided for, whole shares
of Common Stock reserved for purposes of this Plan up to such maximum number
of shares specified by the Committee prior to the first day of the Offering
Period or, if less, the maximum number of shares as may be purchased in
compliance with this Section 8. All participants granted Rights under the Plan
shall have the same rights and privileges with respect to such Rights. The
purchase price of each share of Common Stock (the "Purchase Price") during an
Offering Period shall be the lesser of 85 percent of the Fair Market Value of
the Common Stock on the (i) first Trading Day of the Offering Period or (ii)
last Trading Day of such Offering Period, and shall never be less than the par
value of the Common Stock.
For purposes of the Plan, "Trading Day" means a day on which the National
Association of Securities Dealers Automated Quotation ("Nasdaq") system is
open for trading.
For purposes of the Plan, "Fair Market Value" on a Trading Day means the
closing sale price per share of Common Stock as reflected on the principal
consolidated transaction reporting system for securities listed on any
national securities exchange or other market quotation system on which the
Common Stock may be principally listed or quoted or, if there are no
transactions on a Trading Day, then such closing sale price for the next
Trading Day upon which transactions occur.
No employee may be granted a Right hereunder if such employee, immediately
after the Right is granted, owns 5 percent or more of the total combined
voting power or value of the stock of the Company or any subsidiary. For
purposes of the preceding sentence, the attribution rules of Code section
424(d) will apply in determining the stock ownership of an employee, and all
stock which the employee has a contractual right to purchase will be treated
as stock owned by the employee.
No employee may be granted a Right which permits his rights to purchase
Common Stock under this Plan and all other "employee stock purchase plans,"
within the meaning of Code section 423, of the Company and its subsidiaries to
accrue at a rate which exceeds $25,000 of the fair market value of such Common
Stock (determined at the time such Right is granted) for each calendar year in
which the Right is outstanding at any time, as required by Code section 423.
The Company may automatically suspend the payroll deductions of any
participant necessary to enforce such limit, provided that when the Company
-------- ----
automatically resumes such payroll deductions for subsequent Offering Periods,
the Company applies the payroll deduction rate in effect immediately prior to
such suspension, unless the employee has elected to change such rate.
9. Timing of Purchase. Unless a participating employee has withdrawn all
------------------
funds from his or her account by the close of business on the day preceding
the last Trading Day of the Offering Period, or the employee's participation
in the Plan has otherwise been terminated, such employee will be deemed to
have exercised
3
<PAGE>
automatically his or her Right to purchase Common Stock on the last Trading
Day of the Offering Period for that number of whole shares of Common Stock
which the accumulated funds in the employee's account at that time will
purchase at the Purchase Price, subject to applicable adjustments as provided
herein. Any balance remaining in an employee's account at the end of an
Offering Period after such purchase of Common Stock will be carried forward
automatically into the employee's account for the next Offering Period unless
the employee has elected not to participate in the next Offering Period, in
which case such amount will be refunded.
10. Issuance of Certificates. On the last Trading Day of the Offering
------------------------
Period, a participating employee will be credited with the number of shares of
Common Stock purchased for his or her account under the Plan during such
Offering Period. Shares purchased under the Plan will be held in the custody
of an agent designated by the Committee (the "Agent") on behalf of the
employee. The Agent may hold shares purchased under the Plan in stock
certificates in nominal names and may commingle shares held in its custody in
a single account or stock certificate without identification as to individual
participating employees. A participating employee may, at any time following
his or her purchase of shares under the Plan, by written notice, instruct the
Agent to have all or part of such shares reissued in the participating
employee's own name and have the stock certificate delivered to the employee.
11. Rights on Death, Disability, Retirement or Involuntary Termination. In
------------------------------------------------------------------
the event a participating employee who has a Right under the Plan terminates
employment due to death, Total and Permanent Disability, or Retirement, or is
involuntarily terminated by the Company or a subsidiary other than as a
Discharge for Cause, the participating employee (or his legal representative,
as the case may be) may elect, within 30 days after such termination of
employment and before the last Trading Day of the Offering Period during which
such termination occurs, to withdraw all of the balance accumulated in the
employee's payroll deduction account or to have such accumulated balance
applied to the purchase of Common Stock pursuant to Section 9. For purposes of
the Plan, "Retirement," "Total and Permanent Disability" and "Discharge for
Cause" shall be defined in accordance with Company policy in effect at the
relevant time. No payroll deduction will be taken from any pay due and owing
to the employee after the employee's termination of employment. If a written
election is not received by the Company's Stock Administrator within the 30-
day period or, if earlier, before the last Trading Day of the Offering Period,
no amount will be applied toward the purchase of Common Stock under the Plan
and the balance accumulated in the employee's payroll deduction account will
be paid as soon as practicable after expiration of the 30-day period or close
of the Offering Period, if earlier, to the employee or, in the event of the
employee's death, to the executor or administrator of the employee's estate
or, if no such executor or administrator has been appointed to the knowledge
of the Company, to such other person(s) as the Committee may, in its
discretion, designate.
12. Rights on Voluntary Termination of Employment and Discharge for Cause.
---------------------------------------------------------------------
In the event a participating employee (a) voluntarily terminates employment
with the Company or a subsidiary other than as a result of Retirement or Total
and Permanent Disability, or (b) involuntarily terminates employment with the
Company or a subsidiary as a Discharge for Cause, no payroll deduction will be
taken from any pay due and owing to the employee after the employee's
termination of employment, and the balance accumulated in the employee's
payroll deduction account will be paid to the employee as soon as practicable
after the employee's termination of employment. The employee's participation
in the Plan will be deemed terminated as of the employee's termination of
employment, and no amount will be applied toward the purchase of Common Stock
under the Plan after such date.
13. Termination of Participation. A participating employee will be refunded
----------------------------
all monies in his or her account, and his or her participation in the Plan
will be terminated if either (a) the Board elects to terminate the Plan, or
(b) the employee ceases to be eligible to participate in the Plan. In
addition, if, prior to the last Trading Day of an Offering Period, the
subsidiary by which an employee is employed ceases to be a subsidiary of the
Company, the employee will be deemed to have terminated participation in the
Plan. As soon as practicable following termination of an employee's
participation in the Plan, the Company will deliver to the employee a check
representing the amount in the employee's account and instruct the Agent to
deliver to the employee a
4
<PAGE>
statement reflecting the number of shares held in the employee's Plan account.
Once terminated, participation may not be reinstated for the then current
Offering Period but, if otherwise eligible, the employee may elect to
participate in any subsequent Offering Periods.
14. Holders of Rights Not Stockholders. Neither the granting of a Right to
----------------------------------
an employee nor the deductions from his pay will constitute such employee a
stockholder of the shares of Common Stock covered by a Right under this Plan
until such shares have been purchased by and issued to the employee.
15. Rights Not Transferable. Rights under this Plan are not transferable by
-----------------------
a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.
16. Withholding of Taxes. To the extent that a participating employee
--------------------
realizes ordinary income in connection with the purchase, sale or other
disposition, within the meaning of Code section 424(c), of any shares of
Common Stock purchased under the Plan or the crediting of interest to the
employee's account, the Company may withhold amounts needed to cover such
taxes from any payments otherwise due and owing to the participating employee
or from shares that would otherwise be issued to the participating employee
hereunder. Any participating employee who sells or otherwise disposes of
shares purchased under the Plan within one year after the shares were
transferred to the participating employee or within two years after the
beginning of the Offering Period in which the shares were purchased, whichever
is later, must, within 30 days of such sale or disposition, notify the Company
in writing of the sale or disposition.
17. Application of Funds. All funds received or held by the Company under
--------------------
the Plan may be used for any corporate purpose until applied to the purchase
of Common Stock and/or refunded to participating employees and can be
commingled with other general corporate funds. Participating employees'
accounts will not be segregated.
18. Account Statements. The Company will, or will cause the Agent to,
------------------
deliver to each participating employee a statement for each Offering Period
during which the employee purchases Common Stock under the Plan, reflecting
the amount of payroll deductions and interest (if the Committee has determined
to accrue any interest) accumulated during the Offering Period, the number of
shares purchased for the employee's account, and the price per share of the
shares purchased for the employee's account.
19. Effect of Changes in Capitalization.
-----------------------------------
(a) Changes in Stock. If the number of outstanding shares of Common Stock is
----------------
increased or decreased or the shares of Common Stock are changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of any recapitalization, reclassification, stock split,
reverse split, combination of shares, exchange of shares, stock dividend, or
other distribution payable in capital stock, or other increase or decrease in
such shares effected without receipt of consideration by the Company occurring
after the effective date of the Plan, the number and kind of shares that may
be purchased under the Plan shall be adjusted proportionately and accordingly
by the Company. In addition, the number and kind of shares for which Rights
are outstanding shall be similarly adjusted so that the proportionate
interest, if any, of a participating employee immediately following such event
shall, to the extent practicable, be the same as immediately prior to such
event. Any such adjustment in outstanding Rights shall not change the
aggregate Purchase Price payable by a participating employee with respect to
shares subject to such Rights, but shall include a corresponding proportionate
adjustment in the Purchase Price per share.
(b) Reorganization in Which the Company is the Surviving Corporation.
----------------------------------------------------------------
Subject to Subsection (c) of this Section 19, if the Company shall be the
surviving corporation in any reorganization, merger or consolidation of the
Company with one or more other corporations, all outstanding Rights under the
Plan shall pertain to and apply to the securities to which a holder of the
number of shares of Common Stock subject to such Rights would have been
entitled immediately following such reorganization, merger or consolidation,
with a corresponding
5
<PAGE>
proportionate adjustment of the Purchase Price per share so that the aggregate
Purchase Price thereafter shall be the same as the aggregate Purchase Price of
the shares subject to such Rights immediately prior to such reorganization,
merger or consolidation.
(c) Reorganization in Which the Company is not the Surviving Corporation or
-----------------------------------------------------------------------
Sale of Assets or Stock. Upon any dissolution or liquidation of the Company,
- -----------------------
or upon a merger, consolidation, or reorganization of the Company with one or
more other corporations in which the Company is not the surviving corporation,
or upon a sale of all or substantially all of the assets of the Company to
another corporation, or upon any transaction (including, without limitation, a
merger or reorganization in which the Company is the surviving corporation)
approved by the Board that results in any person or entity (other than Dr.
Robert W. Deutsch, his spouse, or lineal descendants, individually or in the
aggregate, or any trust, charitable organization, foundation or family limited
partnership controlled by him, his spouse, or lineal descendants, individually
or in the aggregate) owning more than 50 percent of the combined voting power
of all classes of stock of the Company, the Plan and all Rights outstanding
hereunder shall terminate, except to the extent provision is made in writing
in connection with such transaction for the continuation of the Plan and/or
the assumption of the Rights theretofore granted, or for the substitution for
such Rights of new Rights covering the stock of a successor corporation, or a
parent or subsidiary thereof, with appropriate adjustments as to the number
and kinds of shares and exercise prices, in which event the Plan and Rights
theretofore granted shall continue in the manner and under the terms so
provided. In the event of any such termination of the Plan, the Offering
Period shall be deemed to have ended on the last Trading Day prior to such
termination, and, unless the Committee determines otherwise in its discretion,
each participating employee shall have the ability to choose either to (i)
have all monies then credited to such employee's account (including interest,
to the extent any has accrued) returned to such participating employee or (ii)
exercise his or her Rights in accordance with Section 9 on such last Trading
Day; provided, however, that if a participating employee does not exercise his
or her right of choice, his or her Rights shall be deemed to have been
automatically exercised in accordance with Section 9 on such last Trading Day.
The Committee shall send written notice of an event that will result in such a
termination to all participating employees not later than the time at which
the Company gives notice thereof to its stockholders.
(d) Adjustments. Adjustments under this Section 19 related to stock or
-----------
securities of the Company shall be made by the Committee, whose determination
in that respect shall be final, binding, and conclusive.
(e) No Limitations on Company. The grant of a Right pursuant to the Plan
-------------------------
shall not affect or limit in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate, dissolve or liquidate, or to sell
or transfer all or any part of its business or assets.
20. Amendment of the Plan. The Board may at any time, and from time to time,
---------------------
amend this Plan in any respect, except that (a) if the approval of any such
amendment by the stockholders of the Company is required by Code section 423,
such amendment will not be effected without such approval, and (b) in no event
may any amendment be made which would cause the Plan to fail to comply with
Code section 423 unless expressly so provided by the Board.
21. Insufficient Shares. In the event that the total number of shares of
-------------------
Common Stock specified in elections to be purchased under any Offering plus
the number of shares purchased under previous Offerings under this Plan
exceeds the maximum number of shares issuable under this Plan, the Committee
will allot the shares then available on a pro rata basis. Any funds then
remaining in a participating employee's account after purchase of the
employee's pro-rata number of shares will be refunded or held in employee's
account for future offerings as determined by the Committee.
22. Termination of the Plan. This Plan may be terminated at any time by the
-----------------------
Board. Except as otherwise provided in Section 19(c) hereof, upon termination
of this Plan all amounts in the payroll deduction accounts of participating
employees will be promptly refunded.
6
<PAGE>
23. No Right To Continued Employment. Neither the Plan nor any Right under
--------------------------------
the Plan confers upon any employee any right to continued employment with the
Company or any of its subsidiaries. An employee's participation in the Plan
will not restrict or interfere in any way with the right of the Company or any
of its subsidiaries to terminate the employee's employment at any time with or
without notice or cause.
24. Governmental Regulations.
------------------------
(a) The Company's obligation to issue, sell, and deliver Common Stock under
this Plan is subject to listing on a national stock exchange or quotation on
Nasdaq and the approval of all governmental authorities required in connection
with the authorization, issuance, or sale of such stock.
(b) The Plan will be governed by the laws of the State of Maryland except to
the extent that such law is preempted by federal law.
(c) The Plan is intended to comply with the provisions of Rule 16b-3(b)(5),
or any successor provision thereto, promulgated under the Exchange Act as a
"Stock Purchase Plan." Any provision inconsistent with such Rule will to that
extent be inoperative and will not affect the validity of the Plan.
25. Payment of Plan Expenses. The Company will bear all costs of
------------------------
administering and carrying out the Plan.
26. Effective Date. The Plan initially became effective February 11, 1997.
--------------
This amendment and restatement of the Plan, as approved by the Board on
February 17, 1999, is effective as of May 1, 1999, subject to approval by the
stockholders of the Company in accordance with Code section 423 by February
16, 2000.
Date Approved by the Board: February 17, 1999
7
<PAGE>
RWD TECHNOLOGIES, INC.
Proxy for Annual Meeting of Stockholders
SOLICITED BY THE BOARD OF DIRECTORS
April 30, 1999
The undersigned hereby appoints each of John H. Beakes and Ronald E. Holtz
proxies with full power of substitution, with the powers (each having full power
to act without the other) the undersigned would possess if personally present,
to vote, as designated below, all shares of Common Stock held by the undersigned
in RWD Technologies, Inc. (the "Company") at the Annual Meeting of Stockholders
to be held at 2:00 p.m. on April 30, 1999, at 10480 Little Patuxent Parkway,
Columbia, Maryland 21044, and at any adjournments or postponements thereof.
This proxy is solicited on behalf of the Board of Directors of the Company
and will be voted FOR Proposals 1 through 3 on the reverse side unless otherwise
indicated.
You are encouraged to specify your choices by marking the appropriate box,
SEE REVERSE SIDE. The Proxies cannot vote your shares unless you sign and return
this card.
(continued and to be SIGNED on the other side)
[UP ARROW] FOLD AND DETACH HERE [UP ARROW]
<PAGE>
Please mark your
vote as in this example
[X]
1. Election of the Company's Class II directors.
FOR all nominees WITHHOLD AUTHORITY
named (except as to vote for all nominees names
marked to the contrary)
[ ] [ ]
Names of Nominees: John H. Beakes, Bruce D. Alexander,
Deborah T. Ung (Instruction: To withhold your vote for
any individual nominee, write that nominees's name on
the following line):
- --------------------------------------------------------
2. Approval of the Company's Amended and Restated Employee Stock Purchase Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Ratification of the appointment of Arthur Andersen, LLP as the Company's
independent auditors for the fiscal year ending December 31, 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy, if properly executed, will be voted in accordance with the
undersigned's direction as set forth herein. If no direction is made, this
Proxy will be voted FOR Proposals 1 through 3, inclusive. This Proxy may be
revoked in writing prior to its exercise. The undersigned hereby revokes any
proxies heretofore given to vote upon or act with respect to such shares.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR HEREON, JOINT OWNERS
SHOULD EACH SIGN PERSONALLY, WHEN SIGNING AS AN ATTORNEY, EXECUTOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE YOUR FULL TITLE, AS SUCH.
Dated: , 1999
----------------------------------------
- ----------------------------------------------------
Signature
- ----------------------------------------------------
Signature (see note above)
IMPORTANT: PLEASE SIGN, DATE AND RETURN PROMPTLY.
