<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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
[X] Definitive Proxy Statement RULE 14A-6(E)(2))
[_] 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)
Laurens MacLure, Jr., Corporate Secretary
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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.:
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(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LOGO OF RWD TECHNOLOGIES, INC.]
10480 Little Patuxent Parkway, RWD Building
Columbia, Maryland 21044-3530
(410) 730-4377
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 28, 2000
----------------
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders (the
"Annual Meeting") of RWD Technologies, Inc. ("RWD" or the "Company") will be
held on April 28, 2000, 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 one (1) Class I director and four (4) Class III directors of
the Company to hold office until the 2001 Annual Meeting of
Stockholders and 2003 Annual Meeting of Stockholders, respectively,
and until their successors are elected and qualified;
II. To approve and ratify an amendment to the Company's 1998 Omnibus
Stock Incentive Plan which increases the aggregate number of shares
that may be issued under options and other awards granted under the
plan from 2,000,000 to 5,500,000;
III. To ratify the selection of Arthur Andersen, LLP as the independent
auditors of RWD for the fiscal year ending December 31, 2000; 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 27, 2000, 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, 1999. 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
/s/ Laurens MacLure, Jr.
Laurens MacLure, Jr.
Secretary
Columbia, Maryland
April 7, 2000
<PAGE>
RWD Technologies, Inc.
10480 Little Patuxent Parkway, RWD Building
Columbia, Maryland 21044-3530
(410) 730-4377
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 28, 2000
----------------
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 28, 2000 (the "Annual Meeting"). The purposes of the Annual Meeting
are to: 1) elect one (1) Class I director and four (4) Class III directors of
the Company to hold office until the 2001 Annual Meeting of Stockholders and
2003 Annual Meeting of Stockholders, respectively, and until their successors
are elected and qualified; 2) approve and ratify an amendment to the Company's
1998 Omnibus Stock Incentive Plan increasing the aggregate number of shares
that may be issued under options and other awards granted under the plan from
2,000,000 to 5,500,000 (the "Plan Amendment"); 3) ratify the selection of
Arthur Andersen, LLP, as the independent auditors of the Company for the
fiscal year ending December 31, 2000; 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
7, 2000.
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 27, 2000 (the
"Record Date"). On the Record Date, there were issued and outstanding
14,803,912 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 five (5) highest number of votes "For" election to the Board of
Directors shall be considered duly elected. Cumulative voting is not
permitted. Approval of the Plan Amendment 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 Plan Amendment. 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 Plan Amendment,
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 Plan
Amendment 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.
<PAGE>
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 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 Robert W. Deutsch and John H. Beakes,
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 the Class I director and
Class III 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 Plan Amendment and
the ratification of the appointment of Arthur Andersen, LLP, as RWD's
independent auditors for the fiscal year ending December 31, 2000,
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,
approval of the Plan Amendment, 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 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, one of whom is subject to election at the 2000 Annual
Meeting, and all three are subject to re-election for a 3-year term beginning
at the 2001 Annual Meeting. Three (3) directors currently serve in Class II
and are subject to re-election for a 3-year term beginning at the 2002 Annual
Meeting. Five (5) directors serve in Class III, one of whom has decided not to
stand for re-election, and the other four are subject to re-election for a 3-
year term beginning at the 2000 Annual Meeting.
One (1) Class I director and four (4) Class III directors are to be elected
at the Annual Meeting to serve until the 2001 Annual Meeting of Stockholders
and 2003 Annual Meeting of Stockholders, respectively, and until their
successors are elected and qualified. The Board of Directors has nominated the
five (5) persons named below, one to serve as a Class I director and remaining
four (4) to serve as Class III directors for the terms indicated. Each of the
nominees is currently a member of the Board. The nominee for Class I director
and each of the nominees for Class III directors have consented to serve on
the Board of Directors through the 2001 Annual Meeting of Stockholders and
2003 Annual Meeting of Stockholders, respectively, and until his successor is
duly elected and qualified. If any of the nominees should be unable to serve
for any reason (which management
2
<PAGE>
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
number of directors.
The Board of Directors recommends that stockholders vote FOR the election of
its nominees for Class I Director and Class III Director.
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, one as a Class I director and four as Class III directors, to serve
until the 2001 Annual Meeting of Stockholders and 2003 Annual Meeting of
Stockholders, respectively, and until their successors are duly qualified and
elected.
<TABLE>
<CAPTION>
Principal occupation, directorships with
Name and Term Expires Director public
Age (if re-elected) Since companies, and other information
- -------- --------------- -------- -------------------------------------------
<S> <C> <C> <C>
James R. 2003 March James R. Kinney was elected to the Board of
Kinney Annual 2000 Directors in March 2000. Mr. Kinney
(61) Meeting recently retired as a Senior Vice President
and Chief Information Officer of Kraft
Foods North America where he was
responsible for the strategic planning,
development, and deployment of business
information systems. From 1996 to 1998, Mr.
Kinney served as the chairman of the IS
Committee for the Grocery Manufacturers'
Association, the trade association
representing food manufacturers. He also
chaired
the Efficient Consumer Response (ECR)
sub-committee on IT. From 1996 to 1997, Mr.
Kinney served as the president of the
Society for Information Management, a 2,500
member international organization dedicated
to the issues of managing IT. He is on the
advisory boards of NCR and SHARE, an
international systems association. He is
also on the board of Transtech, a privately
held e-Business consulting services
company, and Barrington Youth Services, a
non-profit social services agency. Mr.
Kinney served as a nuclear submarine
officer in the U.S. Navy. He has an MBA
degree from Northwestern University and a
bachelor's degree from the U.S. Naval
Academy.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Principal occupation, directorships with
Term Director public
Name and Age Expires Since companies, and other information
- --------------- ------- -------- -------------------------------------------
<S> <C> <C> <C>
Jerry P. Malec 2003 June Jerry P. Malec was elected to the Board of
(57) Annual 1997 Directors following completion of the
Meeting Company's 1997 initial public offering. Mr.
Malec is Chairman of the Board of
Servigistics, a provider of eBusiness
applications for eCustomer Relationship
Management (CRM).
From 1994 to 1997, Mr. Malec was President
and Chief Executive Officer of Checkmate
Electronics, Inc., a developer and
manufacturer of systems and software for
the retail and financial services industry.
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 bachelor's degree in Economics
from Wayne State University.
Robert T. 2003 June Robert T. O'Connell was elected to the
O'Connell (61) Annual 1997 Board of Directors following completion of
Meeting the Company's 1997 initial public offering.
Mr. O'Connell joined the Company in August
1997 and serves as Senior Vice President of
Strategic Business Planning. 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 bachelor's degree in
Economics from Yale University and his MBA
in Finance from the Harvard Graduate School
of Business Administration.
</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>
Jeffrey W. Wendel 2003 April Jeffrey W. Wendel joined the Company in
(45) Annual 1996 1994 and serves as Senior Vice President of
Meeting the Internet Technologies and Systems
Integration Group and a Director of the
Company. Prior to joining the Company, Mr.
Wendel was the Director of Process
Simulation for S3 Technologies, Inc. from
1990 to 1994, where he managed an
international business unit that focused on
software solutions for the petrochemical,
natural gas, and nuclear power industries.
From 1989 to 1990, Mr. Wendel was Director
of Simulation Technology for the Company.
In his prior career assignments, Mr. Wendel
was a technical manager for the Singer
Company-Link SSD division and he served on
active duty in the US Navy as a nuclear
trained submarine officer. Mr. Wendel
received his bachelor's degree in Systems
Engineering from the U.S. Naval Academy and
his MBA in Management from Loyola College.
He currently is a member of technical
advisory boards at Towson University and
UMBC.
William M. 2001 February William M. Bambarger, Jr. was elected to
Bambarger, Jr. Annual 2000 the Board of Directors in February 2000.
(35) Meeting Mr. Bambarger joined the Company in 1992
and has served as Vice President, Chief
Financial Officer, and Treasurer since
February 2000, where he is primarily
responsible for managing the internal and
external financial operations of the
Company. During his career with RWD, Mr.
Bambarger was previously Director of
Business Operations and Controller. Prior
to joining the Company in 1992, Mr.
Bambarger was Manager of International
Accounting at RTKL Associates, Inc., an
international architectural firm in
Baltimore, Maryland. Mr. Bambarger received
his bachelor's degree in Finance from the
University of Baltimore and is a Certified
Public Accountant in Maryland.
</TABLE>
5
<PAGE>
Information Concerning Continuing Directors
<TABLE>
<CAPTION>
Term Director Principal occupation, directorships with
Name and Age Expires Since public companies, and other information
- ----------------- ------- -------- -------------------------------------------
<S> <C> <C> <C>
Dr. Robert W. 2001 January Dr. Robert W. Deutsch founded the Company
Deutsch (76) Annual 1988 in January 1988 and has been Chairman of
Meeting the 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 bachelor's degree in Physics from the
Massachusetts Institute of Technology and
Ph.D. in Physics from the University of
California. He is a member of the National
Academy of Engineering, and is a registered
Professional Engineer.
Kenneth J. Rebeck 2001 April Kenneth J. Rebeck joined the Company in
(48) Annual 1991 1988 and currently serves as Senior Vice
Meeting President of the Enterprise Learning
Solutions Group, which specializes in
Internet-hosted training and testing and
high-technology performance support. Mr.
Rebeck is also the Company's Chief
Engineer. He served as Senior Vice
President of the 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 bachelor's degree in Nuclear
Engineering from the State University of
New York at Buffalo, his M.S. in Nuclear
Science and Engineering from Carnegie-
Mellon University, and he has Professional
Engineering licenses in Maryland, Michigan,
and Pennsylvania.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Principal occupation, directorships with
Term Director public
Name and Age Expires Since companies, and other information
- --------------- ------- -------- -------------------------------------------
<S> <C> <C> <C>
Bruce D. 2002 August Bruce D. Alexander was elected to the Board
Alexander (56) 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 bachelor's degree from Yale
University and his J.D. from Duke
University School of Law. Mr. Alexander is
also a director of LaSalle U.S. Real Estate
Fund.
John H. Beakes 2002 January John H. Beakes co-founded the Company with
(57) 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
bachelor's degree from the U.S. Naval
Academy and his M.S. in Environmental
Engineering from The Johns Hopkins
University, and is a registered
Professional Engineer.
Deborah T. Ung 2002 January Deborah T. Ung joined the Company in 1989
(37) Annual 1999 and serves as Senior Vice President of the
Meeting Enterprise Systems Support Solutions 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 bachelor's
degree in Environmental Health from Purdue
University.
</TABLE>
Information Regarding the RWD Board, Committees, and Remuneration
During 1999, there were five meetings of the Board of Directors of RWD. Each
director attended at least 92% percent of the aggregate number of meetings of
the Board and Board committees of which the director 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 1999, non-employee
directors, Dr. David J. Deutsch, Jerry P. Malec, and Bruce D. Alexander, were
the members of the Audit Committee. There was one meeting of the Audit
Committee held during 1999 and all members were in attendance.
7
<PAGE>
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 1999,
non-employee directors, Jerry P. Malec and Bruce D. Alexander, were the
members of the Compensation Committee. Three meetings of the Compensation
Committee were held during 1999, 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
1999, 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.
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(3)
- ------------------------ ---- -------- ------- ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Dr. Robert W. Deutsch... 1999 $150,000 $ $ -- $7,000
Chairman of the Board,
Chief 1998 150,000 450,000 -- 7,500
Executive Officer 1997 150,000 400,000 11,606,745(2) -- 8,154
John H. Beakes.......... 1999 350,000 -- -- 12,220
President and 1998 275,000 150,000 -- -- 13,280
Chief Operating Officer 1997 220,000 100,000 504,660(2) -- 13,563
Kenneth J. Rebeck....... 1999 200,000 22,500 -- 18,000 9,181
Senior Vice President 1998 180,000 60,000 -- 20,000 10,066
1997 150,000 35,000 -- 15,000 9,611
Deborah T. Ung.......... 1999 200,000 22,500 -- 18,000 7,821
Senior Vice President 1998 125,000 75,000 -- 25,000 6,865
1997 100,000 35,000 -- 15,000 5,425
Jeffrey W. Wendel....... 1999 220,000 22,500 -- 18,000 8,428
Senior Vice President 1998 195,000 60,000 -- 20,000 9,148
1997 150,000 50,000 102(2) 20,000 8,662
</TABLE>
8
<PAGE>
- --------
(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) 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.
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
---------------------------------------- Potential
Percent Realized Value
Number of of Total at Assumed
Securities Options Exercise Annual Rates of
Underlying Granted Price Stock Price
Options to Per Expiration Appreciation for
Name Granted Employees Share(1) Date Option Term(2)
---- ---------- --------- -------- ---------- ----------------
5% 10%
<S> <C> <C> <C> <C> <C> <C>
Dr. Robert W. Deutsch... -- -- -- -- -- --
John H. Beakes.......... -- -- -- -- -- --
Kenneth J. Rebeck....... 18,000 1.1% $8.00 12/22/2009 $90,540 $229,500
Deborah T. Ung.......... 18,000 1.1 8.00 12/22/2009 90,540 229,500
Jeffrey W. Wendel....... 18,000 1.1 8.00 12/22/2009 90,540 229,500
</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 market 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 $13.03 and $20.75,
respectively, from the exercise price of $8.00 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.
9
<PAGE>
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, 1999.
<TABLE>
<CAPTION>
Number of Value of
Shares Securities Unexercised
Acquired Underlying In-the-Money
Upon Value Options at Options at
Name Exercise Realized Year-End(1) Year-End(1)(2)
---- -------- -------- ----------- --------------
<S> <C> <C> <C> <C>
Dr. Robert W. Deutsch.............. -- -- -- --
John H. Beakes..................... 90,000 $703,333 21,200(E) $202,283(E)
7,800(U) 74,425(U)
Kenneth J. Rebeck.................. -- -- 95,000(E) $812,333(E)
73,000(U) 251,875(U)
Deborah T. Ung..................... 500 $ 4,542 43,000(E) $306,392(E)
66,500(U) 157,338(U)
Jeffrey W. Wendel.................. -- -- 22,600(E) $ 76,875(E)
71,600(U) 155,250(U)
</TABLE>
- --------
(1) (E) = Exercisable; (U) = Unexercisable.
(2) Includes only the value of unexercised in-the-money options.
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 1999, 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.
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
10
<PAGE>
stock 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 a
leading compensation consulting firm 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 $375,000 for the
Company's COO, effective January 2000. 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. The Company did
not achieve its revenue and earnings goals for 1999. Based on these factors,
the Compensation Committee approved the decision of management to waive cash
bonuses for the Company's CEO and COO for 1999.
Long-Term Incentive Compensation. During 1999, the Company granted stock
options for 1,571,112 shares to 861 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--Chairman
Bruce D. Alexander
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<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, 1999, 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.
Stock Performance Table
12
<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......... 76 Chairman of the Board of Directors, Chief
Executive Officer
John H. Beakes................ 57 President, Chief Operating Officer,
Director
Robert T. O'Connell........... 61 Senior Vice President, Strategic Business
Planning, Director
Kenneth J. Rebeck............. 48 Senior Vice President--Enterprise Learning
Solutions Group, Chief Engineer, Director
Deborah T. Ung................ 37 Senior Vice President--Enterprise Systems
Support Solutions Group, Director
Jeffrey W. Wendel............. 45 Senior Vice President--Internet
Technologies and Systems Integration
Group, Director
William M. Bambarger, Jr...... 35 Vice President, Chief Financial Officer,
Treasurer, Director
Bruce D. Alexander............ 56 Director
James R. Kinney............... 61 Director
Jerry P. Malec................ 57 Director
<CAPTION>
Key Employees:
- --------------
<S> <C> <C>
Daniel A. Cantwell............ 47 Vice President--Automotive Performance
Support
Richard M. Contel............. 51 Vice President --Performance Improvement
and Learning Solutions
Robert Danna.................. 48 Vice President --Enterprise Systems Support
Solutions
Robert B. Gosline, Jr......... 57 Vice President, Chief Information Officer
Laurens MacLure, Jr........... 43 General Counsel, Corporate Secretary
Vincent Marucci, Jr........... 42 Vice President--IT Operations
Matthew R. McGovern........... 37 Vice President--Enterprise Learning
Solutions Business Development
Dana M. Sohr.................. 40 Vice President --Enterprise Systems Support
Solutions
Dr. David Yager............... 51 Vice President--Applied Technology
Laboratory
</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.
Daniel A. Cantwell joined the Company in 1991 and serves as Vice President
of the Automotive 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.
Richard M. Contel joined the Company in 1991 and serves as Vice President of
the Performance Improvement and Learning Solutions Division. This division
helps companies leverage current technologies to improve workforce performance
by blending learning, performance support, and knowledge management. Through
the division's Pharmaceutical and Petroleum-Chemical Industrial Centers of
Excellence, solutions are designed to fit industry-specific business needs and
growth plans. 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
13
<PAGE>
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 Systems Support Solutions 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.
Laurens MacLure, Jr. joined the Company in 1999 and serves as General
Counsel and Corporate Secretary. Prior to joining the Company, Mr. MacLure was
employed by Pioneer EyeCare, Inc. as General Counsel from 1997 to 1999, and
prior thereto served in a variety of legal positions with PHH Corporation from
1984 to 1997, most recently as Senior Vice President and General Counsel of
PHH Vehicle Management Services. From 1981 to 1984 Mr. MacLure was in private
legal practice. Mr. MacLure received his B.A. in Economics from Bucknell
University and his J.D. from the University of Maryland School of Law.
Vincent Marucci, Jr. joined the Company in 1992 and serves as Vice President
of IT Operations. 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.
Matthew R. McGovern joined the Company in 1999 and serves as Vice President,
Enterprise Learning Solutions. Mr. McGovern founded Merrimac Interactive Media
Corporation in 1996 and served as President and COO until June 1999 when
Merrimac was acquired by RWD. Mr. McGovern was also the founder and CEO of
Merrimac Associates, Inc., a professional services organization that
specialized in performance improvement and business intelligence systems. Mr.
McGovern earned his B.S. in Systems Engineering with a minor in Nuclear
Engineering from the United States Merchant Marine Academy.
Dana M. Sohr joined the Company in 1993 and serves as a Vice President of
the Enterprise Systems Support Solutions Division. Mr. Sohr has 18 years of
experience supporting the implementation of large information systems, and for
the past 10 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. Mr. Sohr received his B.A. degree from the University
of Maryland.
Dr. David Yager joined the Company in 1999 and serves as a Vice President of
Internet Technologies and Systems Integration. Dr. Yager comes to RWD with 12
years of exemplary service and leadership as distinguished professor and chair
of UMBC's Visual Arts Department. During his tenure as chair, the department
14
<PAGE>
attracted national attention for its Imaging Research Center (IRC), Fine Arts
Gallery (founding director), and MFA program in Imaging and Digital Arts, all
created under his guidance. It is with these visionary approaches to emerging
technologies, scholarly research, and program development that Dr. Yager
forged unique and continuing relationships leading to projects with Silicon
Graphics, IBM, Apple Computer, Hewlett Packard, Softimage, Alias/Wavefront,
Media 100, ESPN, the Discovery Channel, the Family Channel and PBS. Dr. David
Yager currently leads RWD's efforts to develop cutting-edge Internet
strategies for both current and future clients.
Stock Ownership of Directors and Management
The following table sets forth information as of March 10, 2000, 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 62.7%
John H. Beakes(3)............................... 557,245 3.8
Robert T. O'Connell(5).......................... 55,000 *
Kenneth J. Rebeck(5)............................ 105,037 *
Deborah T. Ung(5)............................... 54,600 *
Jeffrey W. Wendel(4)............................ 39,817 *
William M. Bambarger, Jr.(5).................... 6,555 *
Bruce D. Alexander(5)........................... 13,111 *
James R. Kinney................................. 1,211 *
Jerry P. Malec(5)............................... 11,481 *
All directors and officers as a group (10
persons)....................................... 10,114,057 67.1
</TABLE>
- --------
*Less than 1%.
(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 29,000 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 living in
his household, and 117,009 shares held in grantor retained annuity trusts,
as to all of which Mr. Beakes disclaims beneficial ownership.
(4) Includes an aggregate of 500 shares held in the Fred W. Wendel Trust B
account for which Mr. Wendel serves as a co-trustee and to which Mr.
Wendel disclaims beneficial ownership. Also includes 34,400 shares
issuable upon exercise of currently exercisable options.
(5) Includes 40,000, 103,000, 54,100, 6,500, 8,000, and 8,000 shares issuable
upon exercise of currently exercisable options held by each of Messrs.
O'Connell, Rebeck, Ms. Ung, Messrs. Bambarger, Alexander, and Malec,
respectively.
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, 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
15
<PAGE>
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 1-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 1999.
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 1999, the Reporting Persons complied with all
Section 16(a) reporting requirements applicable to them, except with respect
to the February 1999 Form 4 report for Mr. Jerry P. Malec, which was filed
late.
II. APPROVAL OF AMENDMENT TO THE COMPANY'S STOCK INCENTIVE PLAN
On February 25, 2000, the Board of Directors approved an amendment (the
"Amendment") to the 1998 Omnibus Stock Incentive Plan (the "Stock Incentive
Plan" or "Plan"), contingent upon approval by the stockholders at the Annual
Meeting. The Amendment increases the number of shares of Common Stock
available for issuance under the Stock Incentive Plan from 2,000,000 to
5,500,000. This increase in authorized shares is the only change that the
Amendment makes to the Stock Incentive Plan as previously approved by the
stockholders. Immediately prior to the date the Amendment was approved by the
Board of Directors, 1,910,165 shares of Common Stock were subject to
outstanding stock options issued under the Stock Incentive Plan, and 89,835
shares remained available for new awards.
The following is a fair and complete summary of the Stock Incentive Plan.
This summary is qualified in its entirety by reference to the full text of the
Stock Incentive Plan, which appears as Exhibit A to this Proxy Statement.
General
Purpose: The purpose of the Stock Incentive Plan is to promote the long-term
growth and profitability of the Company by providing key people with
incentives to improve stockholder value and contribute to the growth and
financial success of the Company. In addition, the Plan benefits the Company
by enabling the Company to attract, retain and reward the best-available
persons.
Shares Available under the Stock Incentive Plan: The Stock Incentive Plan,
as amended by the Amendment, provides that up to 5,500,000 shares of Common
Stock may be issued with respect to stock options and other awards granted
under the Plan. The maximum number of shares of Common Stock subject to awards
of any combination that may be granted during any one fiscal year of the
Company to any one individual is 200,000 shares. These limits are subject to
adjustment by the Administrator to reflect any stock dividends, split-ups,
recapitalizations, mergers, consolidations, business combinations or exchanges
of shares and the like. If any award, or portion of an award, under the Stock
Incentive Plan expires or terminates unexercised, becomes unexercisable or is
forfeited or otherwise terminated, surrendered or canceled as to any shares,
or if any shares of Common Stock are surrendered to the Company in connection
with any award (whether or not such surrendered shares were acquired pursuant
to any award), the shares subject to such award and the surrendered shares
will be available for future awards under the Plan.
16
<PAGE>
Administration: The Stock Incentive Plan is administered by the Compensation
Committee and from time to time may be administered by the Board of Directors
or by such committee or committees as may be appointed by the Board of
Directors from time to time (the Board of Directors, committee or committees
are referred to in this Proxy Statement as the "Administrator"). The
Administrator has full power and authority to take all actions necessary to
carry out the purpose and intent of the Stock Incentive Plan, including, but
not limited to, the authority to: (i) determine the eligible persons to whom,
and the time or times at which awards are granted; (ii) determine the types of
awards to be granted; (iii) determine the number of shares to be covered by or
used for reference purposes for each award; (iv) impose such terms,
limitations, restrictions and conditions upon any such award as the
Administrator deems appropriate; and (v) modify, amend, extend or renew
outstanding awards, or accept the surrender of outstanding awards and
substitute new awards (provided however, that, except as noted below, any
modification that would materially adversely affect any outstanding award may
not be made without the consent of the holder).
In the event of changes in the Common Stock of the Company by reason of any
stock dividend, split-up, recapitalization, merger, consolidation, business
combination or exchange of shares and the like, the Administrator has
discretion to make appropriate adjustments to the maximum number and kind of
shares reserved for issuance or with respect to which awards may be granted
under the Stock Incentive Plan and to the number, kind and price of shares
covered by outstanding awards, and may, in its discretion and without the
consent of holders of awards, make any other adjustments in outstanding
awards, including but not limited to reducing the number of shares subject to
awards or providing or mandating alternative settlement methods such as
settlement of the awards in cash or in shares of Common Stock or other
securities of the Company or of any other entity, or in any other matters
which relate to awards as the Administrator determines to be necessary or
appropriate.
Without the consent of holders of awards, the Administrator has discretion
to make any modifications to any awards, including but not limited to
cancellation, forfeiture, surrender or other termination of the awards in
whole or in part regardless of the vested status of the award, in order to
facilitate any business combination that is authorized by the Board of
Directors of the Company to comply with requirements for treatment as a
pooling of interests transaction for accounting purposes under generally
accepted accounting principles.
Without the consent of holders of awards, the Administrator in its
discretion is authorized to make adjustments in the terms and conditions of,
and the criteria included in, awards in recognition of unusual or nonrecurring
events affecting the Company, or the financial statements of the Company or
any affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Administrator determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Stock Incentive
Plan.
Participation: Participation in the Stock Incentive Plan is open to all
employees, officers, and directors of the Company or any of its affiliates, as
the Administrator selects from time to time. As of February 18, 2000, the
three non-employee directors of the Company, and approximately 817 employees
of the Company were eligible to participate in the Stock Incentive Plan.
Type of Awards
The 1998 Stock Plan allows stock options, stock appreciation rights, stock
awards, phantom stock awards, and performance awards to be granted. These
awards may be granted separately or in tandem with other awards. The
Administrator determines the prices, expiration dates and other material
conditions upon which such awards may be exercised. The Company or its
affiliate may make or guarantee loans to assist grantees in exercising awards
and satisfying any withholding tax obligations arising from awards. Only stock
options have been granted under the Plan to date.
Stock Options: The Stock Incentive Plan allows the Administrator to grant
either awards of incentive stock options as that term is defined in section
422 of the Internal Revenue Code of 1986, as amended (the "Code"),
17
<PAGE>
or nonqualified stock options; provided, however, that awards of incentive
stock options are limited to employees of the Company or of any subsidiary of
the Company. Options intended to qualify as incentive stock options under Code
section 422 must have an exercise price at least equal to fair market value on
the date of grant, but nonqualified stock options may be granted with an
exercise price less than fair market value. To date, only nonqualified stock
options have been granted and all such options have had an exercise price at
least equal to fair market value on the grant date. As of February 18, 2000,
the fair market value of a share of the Company's Common Stock, determined by
the last reported sale price per share of Common Stock on such date as quoted
on the Nasdaq-National Market was $9.6875. The option exercise price may be
paid in cash, by tender of shares of Common Stock, by a combination of cash
and shares, or by any other means the Administrator approves.
Stock Appreciation Rights: The Stock Incentive Plan allows the Administrator
to grant awards of Stock Appreciation Rights ("SAR"). An SAR entitles the
holder to receive a payment in cash, in shares of Common Stock, or in a
combination of both, having an aggregate value equal to the product of (i) the
excess of (A) the fair market value on the exercise date of one share of
Common Stock over (B) the base price per share specified in the grant
agreement, times (ii) the number of shares specified by the SAR, or portion
thereof, which is exercised.
Stock and Phantom Stock Awards: The Stock Incentive Plan allows the
Administrator to grant restricted or unrestricted stock awards, or awards
denominated in stock-equivalent units ("phantom stock") to eligible
participants with or without payment of consideration by the grantee. Stock
awards and phantom stock awards may be paid in cash, in shares of Common
Stock, or in a combination of both.
Performance Awards: The Stock Incentive Plan allows the Administrator to
grant performance awards which become payable in cash, in shares of Common
Stock, or in a combination of both, on account of attainment of one or more
performance goals established by the Administrator. Performance goals
established by the Administrator may be based on the Company's or an
affiliate's operating income or one or more other business criteria selected
by the Administrator that apply to an individual or group of individuals, a
business unit, or the Company or an affiliate as a whole, over such
performance period as the Administrator may designate.
Awards Under the Stock Incentive Plan
Because participation and the types of awards granted under the Stock
Incentive Plan are subject to the discretion of the Administrator, the
benefits or amounts that will be received by any participant or groups of
participants if the amendment to the Stock Incentive Plan is approved are not
currently determinable.
Amendment and Termination
The Board of Directors of the Company may terminate, amend, or modify the
Stock Incentive Plan or any portion thereof at any time.
Federal Income Tax Consequences
The following is a general summary of the current federal income tax
treatment of stock options, which are authorized to be granted under the Stock
Incentive Plan, based upon the current provisions of the Code and the related
Treasury regulations.
Nonqualified Stock Options: No tax consequences result from the grant of the
option. An option holder who exercises a nonqualified stock option with cash
generally will realize compensation taxable as ordinary income in an amount
equal to the difference between the exercise price and the fair market value
of the shares on the date of exercise. The Company is entitled to a deduction
from income in the same amount in the fiscal year in which the exercise
occurs. The option holder's basis in such shares will be the fair market value
on the date income is realized, and when the holder disposes of the shares he
or she will recognize capital gain or loss, either long-term or short-term,
depending on the holding period of the shares.
18
<PAGE>
Incentive Stock Options: No tax consequences result from the grant of the
option. If an option holder acquires stock upon the exercise, no income will
be recognized by the option holder for ordinary income tax purposes (although
the difference between the option exercise price and the fair market value of
the stock subject to the option may result in alternative minimum tax
liability to the option holder) and the Company will be allowed no deduction
as a result of such exercise, provided that the following conditions are met:
(a) at all times during the period beginning with the date of the granting of
the option and ending on the day three months before the date of such
exercise, the option holder is an employee of the Company or of a subsidiary;
and (b) the option holder makes no disposition of the stock within two years
from the date the option is granted nor within one year after the stock is
transferred to the option holder. The three-month period is extended to one
year in the event of disability and is waived in the event of death of the
employee. In the event of a sale of such stock by the option holder after
compliance with these conditions, any gain realized over the price paid for
the stock ordinarily will be treated as capital gain, and any loss will be
treated as capital loss, in the year of the sale.
If the option holder fails to comply with the employment requirement
discussed above, the tax consequences will be the same as for a nonqualified
option, discussed above.
Disallowance of Deductions: The Code disallows deductions for publicly held
corporations with respect to compensation in excess of $1,000,000 paid to the
corporation's chief executive officer and its four other most highly
compensated officers. However, compensation payable solely on account of
attainment of one or more performance goals is not subject to this deduction
limitation if the performance goals are objective, pre-established and
determined by a compensation committee comprised solely of two or more outside
directors, the material terms under which the compensation is to be paid are
disclosed to the stockholders and approved by a majority vote, and the
Compensation Committee certifies that the performance goals and other material
terms were in fact satisfied before the compensation is paid. Under this
exception, the deduction limitation does not apply with respect to
compensation otherwise deductible on account of stock options and stock
appreciation rights granted at fair market value under the Stock Incentive
Plan.
The Board of Directors recommends that stockholders vote FOR theapproval of
the amendment to the Company's 1998 Omnibus Stock Incentive 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, 2000.
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.
In 1999, Arthur Andersen, LLP, performed various professional services for
RWD. These services included completion of the examination of 1998 financial
statements for RWD, other review work of required filings with the Securities
and Exchange Commission, preliminary work on the examination of fiscal year
1999 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, 2000.
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.
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STOCKHOLDER PROPOSALS
Stockholders, who intend to have a proposal considered for inclusion in the
Company's proxy materials for presentation at the 2001 Annual Meeting of
Stockholders, must submit the proposal to the Company no later than December 4,
2000. Stockholders, who intend to present a proposal at the 2001 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, 2001. 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, 1999, 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 21044-3530 or by
telephoning (410) 730-4377.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Laurens MacLure, Jr.
Laurens MacLure, Jr.
Secretary
Columbia, Maryland
April 7, 2000
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Exhibit A
RWD TECHNOLOGIES, INC.
AMENDED 1998 OMNIBUS STOCK INCENTIVE PLAN
1. Amendment, Purpose and Types of Awards
RWD Technologies, Inc. (the "Corporation") maintains the RWD Technologies,
Inc. 1998 Omnibus Stock Incentive Plan. The Corporation hereby amends such
plan as set forth herein and renames amended plan the "RWD Technologies, Inc.
Amended 1998 Omnibus Stock Incentive Plan" (the "Plan"). The purpose of the
Plan is to promote the long-term growth and profitability of RWD Technologies,
Inc. by (i) providing its employees and directors with incentives to improve
stockholder value and to contribute to the growth and financial success of the
Corporation, and (ii) enabling the Corporation to attract, retain and reward
the best-available persons.
The Plan permits the granting of stock options (including incentive stock
options qualifying under Code section 422 and nonqualified stock options),
stock appreciation rights, restricted or unrestricted stock awards, phantom
stock, performance awards, or any combination of the foregoing.
2. Definitions
Under this Plan, except where the context otherwise indicates, the following
definitions apply:
(a) "Affiliate" shall mean any entity, whether now or hereafter existing,
which controls, is controlled by, or is under common control with, the
Corporation (including, but not limited to, joint ventures, limited liability
companies, and partnerships). For this purpose, "control" shall mean ownership
of 50% or more of the total combined voting power or value of all classes of
stock or interests of the entity.
(b) "Award" shall mean any stock option, stock appreciation right, stock
award, phantom stock award, or performance award.
(c) "Board" shall mean the Board of Directors of the Corporation.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
(e) "Common Stock" shall mean shares of common stock of the Corporation, par
value of ten cents ($0.10) per share.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "Fair Market Value" of a share of the Corporation's Common Stock for any
purpose on a particular date shall mean (i) the Closing Price on the trading
day preceding such date, (ii) the Closing Price on the fifth trading day
preceding such date or (iii) the average of the Closing Price on each of the
ten trading days preceding such date, as determined in the discretion of the
Administrator on the date of grant; provided, however, that, with respect to
any Award, whichever definition is selected by the Administrator on the date
of grant shall be used on all other dates on which the meaning of Fair Market
Value is required for the duration of that Award. Notwithstanding the
preceding sentence, with respect to the grant of incentive stock options
within the meaning of Code section 422, Fair Market Value of a share of the
Corporation's Common Stock on the grant date shall mean the Closing Price on
the trading day preceding such date. As used herein, the "Closing Price" on a
particular date shall mean the last reported sale price per share of Common
Stock, regular way, on such date or, in case no such sale takes place on such
date, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on a national
securities exchange or included for quotation on the Nasdaq-National Market,
or if the Common Stock is not so listed or admitted to trading or included for
quotation, the last quoted price, or
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if the Common Stock is not so quoted, the average of the high bid and low
asked prices, regular way, in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
or, if such system is no longer in use, the principal other automated
quotations system that may then be in use or, if the Common Stock is not
quoted by any such organization, the average of the closing bid and asked
prices, regular way, as furnished by a professional market maker making a
market in the Common Stock as selected in good faith by the Administrator or
by such other source or sources as shall be selected in good faith by the
Administrator. If, as the case may be, the relevant date is not a trading day,
the determination shall be made as of the next preceding trading day. As used
herein, the term "trading day" shall mean a day on which public trading of
securities occurs and is reported in the principal consolidated reporting
system referred to above, or if the Common Stock is not listed or admitted to
trading on a national securities exchange or included for quotation on the
Nasdaq-National Market, any business day.
(h) "Grant Agreement" shall mean a written document memorializing the terms
and conditions of an Award granted pursuant to the Plan and shall incorporate
the terms of the Plan.
(i) "Parent" shall mean a corporation, whether now or hereafter existing,
within the meaning of the definition of "parent corporation" provided in Code
section 424(e), or any successor thereto.
(j) "Rule 16b-3" shall mean Rule 16b-3 as in effect under the Exchange Act
on the effective date of the Plan, or any successor provision prescribing
conditions necessary to exempt the issuance of securities under the Plan (and
further transactions in such securities) from Section 16(b) of the Exchange
Act.
(k) "Subsidiary" and "subsidiaries" shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning of the
definition of "subsidiary corporation" provided in Section 424(f) of the Code,
or any successor thereto.
3. Administration
(a) Administration of the Plan. The Plan shall be administered by the Board
or by such committee or committees as may be appointed by the Board from time
to time (the Board, committee or committees hereinafter referred to as the
"Administrator").
(b) Powers of the Administrator. The Administrator shall have all the powers
vested in it by the terms of the Plan, such powers to include authority, in
its sole and absolute discretion, to grant Awards under the Plan, prescribe
Grant Agreements evidencing such Awards and establish programs for granting
Awards.
The Administrator shall have full power and authority to take all other
actions necessary to carry out the purpose and intent of the Plan, including,
but not limited to, the authority to: (i) determine the eligible persons to
whom, and the time or times at which Awards shall be granted; (ii) determine
the types of Awards to be granted; (iii) determine the number of shares to be
covered by or used for reference purposes for each Award; (iv) impose such
terms, limitations, restrictions and conditions upon any such Award as the
Administrator shall deem appropriate; (v) modify, amend, extend or renew
outstanding Awards, or accept the surrender of outstanding Awards and
substitute new Awards (provided however, that, except as provided in Section
7(d) of the Plan, any modification that would materially adversely affect any
outstanding Award shall not be made without the consent of the holder); (vi)
accelerate or otherwise change the time in which an Award may be exercised or
becomes payable and to waive or accelerate the lapse, in whole or in part, of
any restriction or condition with respect to such Award, including, but not
limited to, any restriction or condition with respect to the vesting or
exercisability of an Award following termination of any grantee's employment;
and (vii) establish objectives and conditions, if any, for earning Awards and
determining whether Awards will be paid after the end of a performance period.
The Administrator shall have full power and authority, in its sole and
absolute discretion, to administer and interpret the Plan and to adopt and
interpret such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan and for the conduct of its business as the
Administrator deems necessary or advisable.
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(c) Non-Uniform Determinations. The Administrator's determinations under the
Plan (including without limitation, determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and provisions
of such Awards and the Grant Agreements evidencing such Awards) need not be
uniform and may be made by the Administrator selectively among persons who
receive, or are eligible to receive, Awards under the Plan, whether or not
such persons are similarly situated.
(d) Limited Liability. To the maximum extent permitted by law, the
Administrator shall be liable for any action taken or decision made in good
faith relating to the Plan or any Award thereunder.
(e) Indemnification. To the maximum extent permitted by law and by the
Corporation's charter and by-laws, the Administrator shall be indemnified by
the Corporation in respect of all their activities under the Plan.
(f) Effect of Administrator's Decision. All actions taken and decisions and
determinations made by the Administrator on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Administrator's
sole and absolute discretion and shall be conclusive and binding on all
parties concerned, including the Corporation, its stockholders, any
participants in the Plan and any other employee of the Corporation, and their
respective successors in interest.
4. Shares Available for the Plan; Maximum Awards
Subject to adjustments as provided in Section 7(d) of the Plan, the shares
of Common Stock that may be issued with respect to Awards granted under the
Plan shall not exceed an aggregate of 5,500,000 shares of Common Stock. Prior
to February 25, 2000, the maximum number of shares that may be issued with
respect to Awards granted under the Plan was 2,000,000. The Corporation shall
reserve the maximum number of shares issuable under the Plan, subject to
adjustments as provided in Section 7(d) of the Plan. If any Award, or portion
of an Award, under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated, surrendered or canceled
as to any shares, or if any shares of Common Stock are surrendered to the
Corporation in connection with any Award (whether or not such surrendered
shares were acquired pursuant to any Award), the shares subject to such Award
and the surrendered shares shall thereafter be available for further Awards
under the Plan; provided, however, that any such shares that are surrendered
to the Corporation in connection with any Award or that are otherwise
forfeited after issuance shall not be available for purchase pursuant to
incentive stock options intended to qualify under Code section 422.
Subject to adjustments as provided in Section 7(d) of the Plan, the maximum
number of shares of Common Stock subject to Awards of any combination that may
be granted during any one fiscal year of the Corporation to any one individual
shall be limited to 200,000. Such per-individual limit shall not be adjusted
to effect a restoration of shares of Common Stock with respect to which the
related Award is terminated, surrendered or canceled.
5. Participation
Participation in the Plan shall be open to all employees, officers, and
directors of the Corporation, or of any Affiliate of the Corporation, as may
be selected by the Administrator from time to time.
6. Awards
The Administrator, in its sole discretion, establishes the terms of all
Awards granted under the Plan. Awards may be granted individually or in tandem
with other types of Awards. All Awards are subject to the terms and conditions
provided in the Grant Agreement.
(a) Stock Options. The Administrator may from time to time grant to eligible
participants Awards of incentive stock options as that term is defined in Code
section 422 or nonqualified stock options; provided, however, that Awards of
incentive stock options shall be limited to employees of the Corporation or of
any Parent or Subsidiary of the Corporation. Options intended to qualify as
incentive stock options under Code section 422 must have an exercise price at
least equal to Fair Market Value on the date of grant, but nonqualified stock
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options may be granted with an exercise price less than Fair Market Value. No
stock option shall be an incentive stock option unless so designated by the
Administrator at the time of grant or in the Grant Agreement evidencing such
stock option.
(b) Stock Appreciation Rights. The Administrator may from time to time grant
to eligible participants Awards of Stock Appreciation Rights ("SAR"). An SAR
entitles the grantee to receive, subject to the provisions of the Plan and the
Grant Agreement, a payment having an aggregate value equal to the product of
(i) the excess of (A) the Fair Market Value on the exercise date of one share
of Common Stock over (B) the base price per share specified in the Grant
Agreement, times (ii) the number of shares specified by the SAR, or portion
thereof, which is exercised. Payment by the Corporation of the amount
receivable upon any exercise of an SAR may be made by the delivery of Common
Stock or cash, or any combination of Common Stock and cash, as determined in
the sole discretion of the Administrator. If upon settlement of the exercise
of an SAR a grantee is to receive a portion of such payment in shares of
Common Stock, the number of shares shall be determined by dividing such
portion by the Fair Market Value of a share of Common Stock on the exercise
date. No fractional shares shall be used for such payment and the
Administrator shall determine whether cash shall be given in lieu of such
fractional shares or whether such fractional shares shall be eliminated.
(c) Stock Awards. The Administrator may from time to time grant restricted
or unrestricted stock Awards to eligible participants in such amounts, on such
terms and conditions, and for such consideration, including no consideration
or such minimum consideration as may be required by law, as it shall
determine. A stock Award may be paid in Common Stock, in cash, or in a
combination of Common Stock and cash, as determined in the sole discretion of
the Administrator.
(d) Phantom Stock. The Administrator may from time to time grant Awards to
eligible participants denominated in stock-equivalent units ("phantom stock")
in such amounts and on such terms and conditions as it shall determine.
Phantom stock units granted to a participant shall be credited to a
bookkeeping reserve account solely for accounting purposes and shall not
require a segregation of any of the Corporation's assets. An Award of phantom
stock may be settled in Common Stock, in cash, or in a combination of Common
Stock and cash, as determined in the sole discretion of the Administrator.
Except as otherwise provided in the applicable Grant Agreement, the grantee
shall not have the rights of a stockholder with respect to any shares of
Common Stock represented by a phantom stock unit solely as a result of the
grant of a phantom stock unit to the grantee.
(e) Performance Awards. The Administrator may, in its discretion, grant
performance awards which become payable on account of attainment of one or
more performance goals established by the Administrator. Performance awards
may be paid by the delivery of Common Stock or cash, or any combination of
Common Stock and cash, as determined in the sole discretion of the
Administrator. Performance goals established by the Administrator may be based
on the Corporation's or an Affiliate's operating income or one or more other
business criteria selected by the Administrator that apply to an individual or
group of individuals, a business unit, or the Corporation or an Affiliate as a
whole, over such performance period as the Administrator may designate.
7. Miscellaneous
(a) Withholding of Taxes. Grantees and holders of Awards shall pay to the
Corporation, or make provision satisfactory to the Administrator for payment
of, any taxes required to be withheld in respect of Awards under the Plan no
later than the date of the event creating the tax liability. The Corporation
may, to the extent permitted by law, deduct any such tax obligations from any
payment of any kind otherwise due to the grantee or holder of an Award, or to
retain or sell without notice a sufficient number of the shares to be issued
to such grantee or holder to cover any such taxes. In the event that payment
to the Corporation of such tax obligations is made in shares of Common Stock,
such shares shall be valued at Fair Market Value on the applicable date for
such purposes.
(b) Loans. The Corporation may make or guarantee loans to grantees to assist
grantees in exercising Awards and satisfying any withholding tax obligations.
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(c) Transferability. Except as otherwise determined by the Administrator,
and in any event in the case of an incentive stock option or a stock
appreciation right granted with respect to an incentive stock option, no Award
granted under the Plan shall be transferable by a grantee otherwise than by
will or the laws of descent and distribution. Unless otherwise determined by
the Administrator in accord with the provisions of the immediately preceding
sentence, an Award may be exercised during the lifetime of the grantee, only
by the grantee or, during the period the grantee is under a legal disability,
by the grantee's guardian or legal representative.
(d) Adjustments; Business Combinations. In the event of changes in the
Common Stock of the Corporation by reason of any stock dividend, split-up,
recapitalization, merger, consolidation, business combination or exchange of
shares and the like, the Administrator shall, in its discretion, make
appropriate adjustments to the maximum number and kind of shares reserved for
issuance or with respect to which Awards may be granted under the Plan as
provided in Section 4 of the Plan and to the number, kind and price of shares
covered by outstanding Awards, and shall, in its discretion and without the
consent of holders of Awards, make any other adjustments in outstanding
Awards, including but not limited to reducing the number of shares subject to
Awards or providing or mandating alternative settlement methods such as
settlement of the Awards in cash or in shares of Common Stock or other
securities of the Corporation or of any other entity, or in any other matters
which relate to Awards as the Administrator shall, in its sole discretion,
determine to be necessary or appropriate.
Notwithstanding anything in the Plan to the contrary and without the consent
of grantees or holders of Awards, the Administrator, in its sole discretion,
may make any modifications to any Awards, including but not limited to
cancellation, forfeiture, surrender or other termination of the Awards in
whole or in part regardless of the vested status of the Award, in order to
facilitate any business combination that is authorized by the Board to comply
with requirements for treatment as a pooling of interests transaction for
accounting purposes under generally accepted accounting principles.
The Administrator is authorized to make, in its discretion and without the
consent of grantees or holders of Awards, adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual
or nonrecurring events affecting the Corporation, or the financial statements
of the Corporation or any Subsidiary, or of changes in applicable laws,
regulations, or accounting principles, whenever the Administrator determines
that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan.
(e) Substitution of Awards in Mergers and Acquisitions. Awards may be
granted under the Plan from time to time in substitution for Awards held by
employees or directors of entities who become or are about to become employees
or directors of the Corporation or an Affiliate as the result of a merger or
consolidation of the employing entity with the Corporation or an Affiliate, or
the acquisition by the Corporation or an Affiliate of the assets or stock of
the employing entity. The terms and conditions of any substitute Awards so
granted may vary from the terms and conditions set forth herein to the extent
that the Administrator deems appropriate at the time of grant to conform the
substitute Awards to the provisions of the awards for which they are
substituted.
(f) Termination, Amendment and Modification of the Plan. The Board may
terminate, amend or modify the Plan or any portion thereof at any time.
(g) Non-Guarantee of Employment or Service. Nothing in the Plan or in any
Grant Agreement thereunder shall confer any right on an individual to continue
in the service of the Corporation or shall interfere in any way with the right
of the Corporation to terminate such service at any time.
(h) No Trust or Fund Created. Neither the Plan nor any Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Corporation and a grantee or any other person. To the
extent that any grantee or other person acquires a right to receive payments
from the Corporation pursuant to an Award, such right shall be no greater than
the right of any unsecured general creditor of the Corporation.
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(i) Governing Law. The validity, construction and effect of the Plan, of
Grant Agreements entered into pursuant to the Plan, and of any rules,
regulations, determinations or decisions made by the Administrator relating to
the Plan or such Grant Agreements, and the rights of any and all persons
having or claiming to have any interest therein or thereunder, shall be
determined exclusively in accordance with applicable federal laws and the laws
of the State of Maryland, without regard to its conflict of laws principles.
(j) Effective Date; Termination Date. The RWD Technologies, Inc. 1998
Omnibus Stock Incentive Plan was adopted by the Board effective March 6, 1998,
and approved by the stockholders on May 19, 1998. The amendment of such plan
as set forth in this document is effective as of the date the amendment was
approved by the Board, February 25, 2000, subject to approval of the
stockholders within twelve months after such date. No Award shall be granted
under the Plan after the close of business on the day immediately preceding
March 6, 2008. Subject to other applicable provisions of the Plan, all Awards
made under the Plan prior to such termination of the Plan shall remain in
effect until such Awards have been satisfied or terminated in accordance with
the Plan and the terms of such Awards.
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