SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
Preliminary proxy statement [ ]
[ ]Confidential, for Use of the Commission Only
Definitive proxy statement [X] (as permitted by Rule 14a-6(e)(2)) Definitive
additional materials [ ] Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12 [ ]
INFODATA SYSTEMS INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3). 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 transactions applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
[ ] 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
INFODATA SYSTEMS INC.
Corporate Headquarters
12150 Monument Drive
Fairfax, Virginia 22033
--------------------------------
NOTICE OF THE 1996 ANNUAL MEETING OF SHAREHOLDERS
May 22, 1996
--------------------------------
The Annual Meeting of the Shareholders of Infodata Systems Inc. (the
"Company") will be held at The University Club, One West 54th Street, New
York, New York 10019, on Wednesday, May 22, 1996, at 10:00 a.m. for the
following purposes:
1. To elect six directors to serve until their respective successors are
elected and qualified.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Shareholders of record as of the close of business on April 17, 1996, are
entitled to notice of and to vote at the meeting. You are requested to sign,
date, and return the accompanying proxy card in the enclosed, self-addressed
envelope. You may withdraw your Proxy at the meeting if you are present and
desire to vote your shares in person.
By order of the Board of Directors
/s/Harry Kaplowitz
Harry Kaplowitz, President
Dated: Fairfax, Virginia
April 24, 1996
YOUR VOTE IS IMPORTANT, PLEASE RETURN YOUR SIGNED PROXY PROMPTLY.
<PAGE>
INFODATA SYSTEMS INC.
PROXY STATEMENT
General Information
The enclosed Proxy is solicited by the Company's Board of Directors. It
may be revoked in writing at any time by written notice delivered to the
President of the Company before it is voted or it may be withdrawn at the
meeting and voted in person. If not revoked or withdrawn, the shares
represented by the Proxy will be voted in the manner directed therein. If a
choice is not specified, the Proxy will be voted FOR the election of the Board
of Directors' nominees.
A majority of the vote of shareholders present in person or by proxy is
required for the election of the nominees to the Board of Directors. The
outstanding shares of Common Stock and Preferred Stock represented at the
annual meeting will vote together as a single class. On April 17, 1996, the
record date for eligibility to vote, the Company had outstanding 733,154
shares of Common Stock, par value $.03 per share, and 131,500 shares of
Preferred Stock, par value $1.00 per share. Each share of Common Stock
outstanding is entitled to one vote and each share of Preferred Stock
outstanding is entitled to 1.11111 votes. Each share of Preferred Stock is
convertible into 1.11111 shares of the Common Stock. No other class of
securities is issued or outstanding.
A majority of the votes entitled to be cast on matters to be considered
at the meeting constitutes a quorum. If a share is represented for any purpose
at the meeting, it is deemed to be present for quorum purposes for the
remainder of the meeting or adjournments thereof. Abstentions and broker
non-votes (where a nominee holding shares for a beneficial owner has not
received voting instructions from the beneficial owner with respect to a
particular matter and such nominee does not possess or choose to exercise
discretionary authority with respect thereto) are counted only for purposes
determining whether a quorum is present.
Votes cast by proxy or in person at the annual meeting will be tabulated
by the inspectors of election appointed by the Company for the meeting. The
number of shares represented at the meeting in person or by proxy will
determine whether or not a quorum is present. The inspectors of election will
treat abstentions as shares that are present and entitled to vote for purposes
of determining the presence of a quorum but as unvoted for purposes of
determining the approval of any matter submitted to the shareholders for a
vote. If a broker indicates on the proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares
will not be considered as present and entitled to vote by the inspectors of
election with respect to that matter.
Board Committees
The Board of Directors is responsible for the overall affairs of the
Company and held six meetings during the year ended December 31, 1995. To
assist it in carrying out this responsibility, the Board has delegated certain
authority to several committees.
The Executive Committee members are Richard T. Bueschel, Harry Kaplowitz,
and Robert M. Leopold. The Executive Committee may exercise any of the powers
and perform any of the duties of the Board of Directors, subject to the
provisions of the law and certain limits imposed by the Board of Directors.
During the year ended December 31, 1995, either in-person or telephonic
meetings of the Executive Committee were held on the average of twice per
month.
2
<PAGE>
The Audit Committee members, Messrs. Leopold, Laurence C. Glazer and
Millard H. Pryor, Jr., are assigned responsibility for recommending the
accounting firm to be engaged as independent auditors; consulting with the
independent auditors regarding the adequacy of internal accounting controls;
and reviewing the scope of the audit and the results of the audit examination.
During 1995, the Audit Committee held three meetings either in-person or by
telephone.
The Nominating Committee held one meeting in 1995. The Committee reviews
and makes recommendations to the Board of Directors regarding the selection of
nominees to serve as committee members of the Board as well as directors of
the Company. Messrs. Bueschel, Leopold, and Isaac M. Pollak are members of the
Nominating Committee.
The Compensation Committee held two meetings in 1995. The Compensation
Committee reviews and makes recommendations to the Board of Directors
regarding the compensation and benefits policies and practices of the Company.
The Committee is also assigned responsibility for reviewing and approving the
compensation of officers of the Company. Messrs. Pryor, Glazer and Pollak are
the members of the Compensation Committee.
During 1995, each director attended at least 75% of the aggregate of the
total meetings of the Board of Directors and the Committees of the Board on
which he served, except Isaac M. Pollak who attended 67% of the meetings of
the Board.
ELECTION OF DIRECTORS
Six directors are to be elected by the shareholders, each director so
elected to hold office until the next Annual Meeting of Shareholders and until
his successor is elected and qualified. The persons named as proxies in the
enclosed form intend to cast all votes for the election of the six nominees of
the Board of Directors listed below, unless the proxy instructs otherwise. In
the event that any of the six nominees should not continue to be available for
election, discretionary authority will be exercised to seek a substitute. No
circumstances are now known which would render any nominee unavailable.
Information About Nominees
The ages, principal occupations, and employment during the past five
years for each nominee for director are set forth below:
Richard T. Bueschel Age 63 Director since 1992
Mr. Bueschel became a director in 1992 and was named Chairman of the
Board of the Company in January, 1993. He is Chairman and Chief Executive
Officer of Northern Equities, Inc., an investment and management firm. From
1984 to 1989, Mr. Bueschel was Senior Vice President for Technology at
Houghton Mifflin Company, a publisher of educational text and software. He
currently is Chairman of the Board of Communications Management Systems, Inc.
and MediLife Software, Inc. and sits on the Board of Directors of Tridex
Corporation and University Online Systems.
Laurence C. Glazer Age 50 Director since 1993
Mr. Glazer became a director in August 1993. He is currently a partner
and founder of Buckingham Properties, a real estate development firm
established in 1970, specializing in redevelopment and enhancement of urban
property in Rochester, New York. Mr. Glazer is a member of the Board of
Directors of Rochester Institute of Technology College of Business.
3
<PAGE>
Harry Kaplowitz Age 52 Director since 1980
Mr. Kaplowitz is a founder of the Company and was elected Vice President
in 1973, and Executive Vice President and Director in 1980. In 1989, he was
promoted to President and Chief Operating Officer of the Company's INQUIRE
Group. In 1990, he was named President of the Company. From January 1991 to
January 1993, he served as Chairman of the Board of Directors of the Company.
Robert M. Leopold Age 70 Director since 1992
Mr. Leopold became a director in 1992. He is currently President of
Huguenot Associates, Inc., a financial and business consulting firm. From 1986
to 1989, Mr. Leopold served as Chief Executive Officer of Insituform of North
America, a provider of materials and technology for rehabilitation of
underground pipes. Currently, he is a Director of Windsor Capital, and
Standard Security Life Insurance Company of New York.
Isaac M. Pollak Age 45 Director since 1993
Mr. Pollak became a director in March 1993. Since 1980, Mr. Pollak has
been President and Chief Executive Officer of LGP Ltd., a developer and
marketer of costume, fashion and fine jewelry, watches, perfumes and other
promotional items.
Millard H. Pryor, Jr. Age 62 Director since 1992
Mr. Pryor became a director in 1992. He is currently Managing Director of
Pryor & Clark Company, an investment holding company. From 1988 to 1992, he
was Chairman of Corcap, Inc., a corporation engaged in supplying services and
products to the government. From 1972 to 1991, Mr. Pryor was Chairman of
Lydall, Inc., a New York Stock Exchange listed company, which manufactures
technical fiber materials. He is a Director of CompuDyne Corporation, Corcap,
Inc., Wiremold Company, Hoosier Magnetics, Inc., Pacific Scientific Company,
and The Hartford Funds.
4
<PAGE>
EXECUTIVE COMPENSATION, TRANSACTIONS AND EMPLOYEE BENEFIT PLANS
The following Summary Compensation Table sets forth for the Company's
President and all other executive officers whose total annual salary and
bonuses exceeded $100,000, the amount and nature of all compensation awarded
to, earned by or paid to such individual for the fiscal year indicated for
services rendered in all capacities.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
---------------------------------------- --------------------------------------------------------------
Awards Payouts
--------------------------- -----------
Securities Long-Term
Restricted Underlying Incentive All Other
Name and Stock Options/SARs Plan Compensation
Principal Position Year Salary($) Bonus($) Other($) Awards(s)($) (#) Payouts($) ($)
------------------ ---- --------- -------- -------- ------------ ----- ----------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Harry Kaplowitz(1) 1995 $132,000 $10,251 -- -- -- -- --
President
1994 $120,000 $69,600 -- -- 17,666 -- --
1993 $120,000 -- -- -- 8,334 -- --
David A. Karish(2) 1995 $80,493 -- $50,000 -- -- -- --
Senior Vice President
and 1994 $100,000 $43,500 -- -- 12,833 -- --
Secretary/Treasurer
1993 $100,000 -- -- -- 6,667 -- --
Dr. Robert J. Loane(3) 1995 $100,000 $ 2,238 -- -- -- -- --
Senior Vice President
and Chief Scientist 1994 $ 96,000 $13,920 -- -- 3,000 -- --
1993 $ 93,375 -- -- -- 2,334 -- --
Richard M. Tworek(4) 1995 $22,277 -- -- -- -- -- --
Senior Vice President
---------------------------------------------------------------------------------------------------------------------------
5
<PAGE>
<FN>
(1) - The amount reported above for the 1995 bonus was paid in April 1996.
With respect to the 1994 bonus amount reported above, $27,840 was paid in
August 1994 and the balance of $41,760 was paid in March 1995 and related to
1994 performance.
(2) - The employment of David A. Karish terminated as of August 17, 1995. The
$50,000 bonus was paid to Mr. Karish prior to the termination of his
employment as required under the terms of the Stay Incentive Bonus Agreement,
dated February 18, 1994.
(3) - The amount reported above for the 1995 bonus was paid in April 1996.
With respect to the 1994 bonus amount reported above, $5,568 was paid in
August 1994 and the balance of $8,352 was paid in March 1995 and related to
1994 performance.
(4) - The employment of Richard M. Tworek commenced on October 11, 1995.
</FN>
</TABLE>
Stock Options
No Options Grants Table is set forth herein because no options were
granted to the above-named executive officers during 1995.
<TABLE>
AGGREGATE OPTION EXERCISES IN 1995 AND
DECEMBER 31, 1995 OPTION VALUES
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
12/31/95 (#) 12/31/95 ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized Unexercisable Unexercisable
------ ----------------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
Harry Kaplowitz - - 28,445/11,222 $14,822/$6,389
David A. Karish(1) 6,221 10,745 0/0 $0/$0
Dr. Robert J. Loane - - 8,890/1,778 $5,736/$1,628
Richard M. Tworek(2) - - 0/0 $0/$0
---------------------------------
<FN>
(1) - The employment of David A. Karish terminated as of August 17, 1995.
(2) - The employment of Richard M. Tworek commenced on October 11, 1995.
</FN>
</TABLE>
Agreements With Executives
During 1986, the Company entered into Executive Separation Agreements
with Mr. Kaplowitz and Dr. Loane. In the event that either officer's
employment is terminated involuntarily, without cause, following a change in
control of the Company, as defined, that officer is entitled to separation pay
equal to two years base salary and continuation of life and health insurance
coverage for two years. Additionally, any type of pension or profit-sharing
credited service will be extended for two years. There were no separation
payments accrued or paid under the Executive Separation Agreements in 1995.
6
<PAGE>
As part of the acquisition by the Company of Merex, Inc. in October 1995,
the Company entered into an Employment and Non-Compete Agreement, dated
October 11, 1995, with Richard M. Tworek, pursuant to which Mr. Tworek is
serving as a Senior Vice President of the Company for a period of two years,
and pursuant to which he receives annual compensation equal to a base salary,
currently $125,000, plus any bonus compensation as may be determined by the
Company's Board of Directors. This Agreement also provides that should Mr.
Tworek's employment with the Company cease at the end of his employment period
or his earlier resignation or termination for cause, then Mr. Tworek shall not
compete with the Company for an additional two year period thereafter with
respect to any then existing client, customer or supplier of the Company.
Director Compensation
During 1995, non-employee directors received an annual fee of $3,000 plus
$500 per Board meeting or meeting of a Committee of the Board (fees for
Committee meetings held on the same day as Board meetings are $100). During
1995, no Executive Committee meeting fees were accrued or paid to Executive
Committee members. During 1995, Laurence C. Glazer, Isaac M. Pollak and
Millard H. Pryor, Jr., as the members of the Compensation Committee, were each
granted a non-qualified option under the Company's 1995 Stock Option Plan to
purchase 2,000 shares of Common Stock at an exercise price of $3.0625 per
share. Any director who is an employee of the Company receives no additional
compensation for serving as a director.
Stock Option Plan
In 1995, the Board of Directors adopted and the Company's shareholders
approved the 1995 Stock Option Plan (the "1995 Plan"), which (i) consolidated
the Company's 1991 Incentive Stock Option Plan and 1992 Non-Qualified Stock
Option Plan and (ii) provided for the automatic grant of stock options to the
members of the Compensation Committee of the Company's Board of Directors. A
total of 433,333 shares of Common Stock have been authorized for issuance
under options granted and to be granted under the 1995 Plan at exercise prices
which will not be less than 100% of the fair market value of the underlying
shares on the date of grant of the option. As of April 17, 1996, options to
purchase a total of 201,849 shares of Common Stock under the 1995 Plan, at
prices ranging from $2.53 to $13.11 per share, were outstanding, including the
6,000 shares referred to above which underlie options granted to members of
the Compensation Committee.
Stock Warrant Purchase Plan
During 1987, the Board of Directors adopted a Stock Warrant Purchase
Plan. The stock subject to this plan is authorized but unissued shares of
Common Stock. The total number of shares which may be issued during the
existence of the Plan is not to exceed 16,666, and the aggregate number of
shares as to which warrants may be granted to any one individual during any
calendar year shall not exceed 1,666. The purchase price of the shares under
each warrant shall not be less than the fair market value of the shares at the
time the warrant is granted. Each warrant shall continue for periods of up to
seven years from the date of its grant.
In 1995, no warrants were issued to directors of the Company. As of
December 31, 1995, warrants to purchase 6,666 shares were outstanding, none of
which are held by present directors.
Other Information
For the year ended December 31, 1995, the Company made payments totaling
$120,000 for business management consulting fees for services of its Chairman,
Mr. Richard T. Bueschel. With respect to payment of these consulting fees, a
previously deferred amount of $10,000 was for services rendered prior to 1995.
7
<PAGE>
For the year ended December 31, 1995, the Company made payments totaling
$48,000 to Huguenot Associates Inc. for the consulting services of its
President, Robert M. Leopold. Mr. Leopold is a director of the Company. In
April 1996, the Company issued 4,000 shares of its Common Stock to Mr. Leopold
for services rendered by him to the Company in connection with the acquisition
of certain assets and liabilities of Merex, Inc. effected on October 11, 1995.
For the year ended December 31, 1995, the Company made payments totaling
$26,022 to Richard M. Tworek, an officer of the Company, relating to a
deferred compensation liability of Merex, Inc. which the Company assumed in
the Merex, Inc. transaction.
Reports Under Section 16(a) of the Securities Exchange Act of 1934
Based solely on the Company's review of reports filed under Section 16(a)
of the Securities Exchange Act of 1934 (the "Exchange Act"), the Company
believes that there were no reports which were filed late, no transactions
which were not reported on a timely basis and no known failure to file
required forms except that Richard M. Tworek did not timely report on Form 3
the receipt of 75,000 shares of Common Stock on October 11, 1995, as part of
the consideration paid by the Company to him in the Merex acquisition.
8
<PAGE>
BENEFICIAL OWNERSHIP OF SECURITIES
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information as to each person or
group known to be a beneficial owner of more than five percent of the Common
Stock or convertible Preferred Stock of the Company as of April 17, 1996. Each
beneficial owner has sole voting and investment power with respect to such
shares, unless otherwise specified below.
<TABLE>
<CAPTION>
Title of Name and Address Amount and Nature of Percent
Class of Beneficial Owner Beneficial Ownership of Class
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK
Common Stock $.03 Richard T. Bueschel 71,567 shares(1) 8.9%
par value Suite 198
48 Par-La-Ville Road
Hamilton HM 11 Bermuda
Harry Kaplowitz 52,217 shares(2) 6.8%
12150 Monument Drive
Fairfax, VA 22033
Isaac M. Pollak 39,506 shares(3)(4) 5.3%
10 West 46th Street
New York, NY 10036
Robert M. Leopold 40,833 shares(5) 5.4%
4 Gilder Street
Suite 3
Larchmont, NY 10538
Richard M. Tworek 78,750 shares 10.7%
12150 Monument Drive
Fairfax, VA 22033
PREFERRED STOCK
- ----------------
Convertible Preferred University of Rochester 100,000 shares (convertible 76.0%
Stock Rochester, NY 14627 into 111,111 shares of Common
$1.00 par value Stock or 13.2% of all shares of
Common Stock assuming the
University of Rochester fully
converts and the other
preferred shareholders do not
convert)
Mrs. Jane L. Glazer 20,000 shares (convertible into 15.2%
89 Stuyvesant Road 22,222 shares or 2.9% of all
Pittsford, NY 14534 shares of Common Stock assuming
Mrs. Glazer fully converts and
the other preferred shareholders
do not convert)
-----------------------------------
<FN>
(1) Includes 69,567 shares subject to presently exercisable stock options.
(2) Includes 31,223 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
(3) Includes 5,229 shares owned by LGP Ltd. Profit Sharing Trust for which
Mr. Pollak has sole voting and investment power.
(4) Includes 7,333 shares subject to presently exercisable stock options.
(5) Includes 26,000 shares subject to presently exercisable stock options.
</FN>
</TABLE>
9
<PAGE>
Security Ownership of Management
The following table sets forth certain information regarding the
beneficial ownership of the Company's shares of Common Stock and Preferred
Stock owned on April 17, 1996, by each of the Company's directors and by all
directors and executive officers as a group. Each person has sole voting and
investment power with respect to such securities, unless otherwise specified
below.
<TABLE>
<CAPTION>
Common Stock Preferred Stock
-------------------------------------- -------------------------------------
Amount and Nature of Percent Amount and Nature of Percent
Name of Individual Beneficial Ownership of Class Beneficial Ownership of Class
------------------ -------------------- -------- -------------------- --------
<S> <C> <C> <C> <C>
Richard T. Bueschel 71,567(1) 8.9%
Laurence C. Glazer 7,334(2) 1.0% 20,000(9) 15.2%
Harry Kaplowitz 52,216(3) 6.8%
Robert M. Leopold 40,833(4) 5.4%
Robert J. Loane 28,848(5) 3.9%
Isaac M. Pollak 39,506(6) 5.3%
Millard H. Pryor, Jr. 7,667(7) 1.0%
Richard M. Tworek 78,750 10.7%
All directors and
executive officers as a
group (8 persons) 326,721(8) 36.6% 20,000 15.2%
------------------------------
<FN>
(1) Includes 69,597 shares subject to presently exercisable stock options.
(2) Includes 7,334 shares subject to presently exercisable stock options.
(3) Includes 31,223 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
(4) Includes 26,000 shares subject to presently exercisable stock options.
(5) Includes 9,668 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
(6) Includes 5,229 shares owned by LGP Ltd. Profit Sharing Trust for which
Mr. Pollak has sole voting and investment power. Includes 7,333 shares
subject to presently exercis- able stock options.
(7) Includes 7,334 shares subject to presently exercisable stock options.
(8) Includes 158,489 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
(9) Shares owned by Mrs. Jane L. Glazer, Mr. Glazer's wife, who has sole
voting and investment power. Mr. Glazer disclaims beneficial ownership of
such shares.
</FN>
</TABLE>
10
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP was engaged to perform an audit of the Company's
financial statements for the year ended December 31, 1995. A representative of
Arthur Andersen LLP is expected to be present at the Company's Annual Meeting
of Shareholders, will be permitted to make a statement if he/she so desires,
and will be available to respond to appropriate questions. The Audit Committee
of the Board of Directors has not yet recommended an independent public
accounting firm to audit the Company's financial statements for the year
ending December 31, 1996.
SOLICITATION OF PROXIES
The Company will bear the cost of solicitation of proxies. In addition to
solicitation by the use of mails, some officers, without extra compensation,
may solicit proxies personally and by telephone and telegraph. The Company may
request banks, brokers, nominees, custodians, and fiduciaries to forward
soliciting material to the beneficial owners of shares registered in their
names. The Company will reimburse such persons for their expense incurred in
such assistance.
SHAREHOLDERS' PROPOSALS
Proposals of shareholders intended to be presented at the 1997 Annual
Meeting must be received at the Company's Corporate Headquarters, 12150
Monument Drive, Fairfax, Virginia 22033, for inclusion in the Company's Proxy
Statement and form of proxy relating to that Annual Meeting, no later than
December 27, 1996.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present, and has not been informed that any other person intends to
present, to shareholders at the Annual Meeting, any matter other than those
specifically referred to in this Proxy Statement. If any other matters
properly come before the Annual Meeting, it is intended that the holders of
the proxies will act in respect thereto in accordance with their best
judgment. Abstentions, broker non-votes, and withheld votes are voted neither
"for" nor "against" a proposal, but are counted in the determination of a
quorum.
In accordance with the terms of indemnification agreements with each of
its directors and officers, the Company maintained directors and officers
liability insurance, $1,000,000 in the aggregate for the policy year, under an
agreement with Executive Re Specialty Insurance Company effective May 3, 1994.
This policy covered each director and officer of the Company and required the
payment of annual premiums totalling $31,763. During 1995, no sums were paid
under this or any other indemnification insurance contract.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Harry Kaplowitz
Harry Kaplowitz, President
Dated: Fairfax, Virginia
April 24, 1996
11
