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 (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
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Section
240.14a-11(c) or Section 240.14a-12
INFODATA SYSTEMS INC
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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<PAGE>
[ ] 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
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<PAGE>
INFODATA SYSTEMS INC.
Corporate Headquarters
12150 Monument Drive
Fairfax, Virginia 22033
--------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held
November 5, 1997
--------------------------------
A Special Meeting of the Shareholders of Infodata Systems Inc. (the "Company")
will be held at the Company's Corporate Headquarters on November 5, 1997, at
10:00 a.m. for the following purposes:
1. To approve an amendment to the Company's 1995 Stock Option Plan that
would reserve five hundred thousand (500,000) additional shares of the
Company's common stock, par value $.03 per share (the "Common Stock"),
for issuance to employees, officers, directors, consultants and others
under such Plan.
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 September 25, 1997, 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
Harry Kaplowitz, President
Dated: Fairfax, Virginia
September 26, 1997
YOUR VOTE IS IMPORTANT, PLEASE RETURN YOUR SIGNED PROXY PROMPTLY.
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
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<PAGE>
Proxy will be voted in the manner directed therein. If a choice is not
specified, the Proxy will be voted FOR the proposed amendment to the Company's
1995 Stock Option Plan providing for the reservation of 500,000 additional
shares for issuance to employees, officers, directors, consultants and others
under that Plan.
A majority of the vote of shareholders present in person or by proxy is
required for the proposed amendment to the 1995 Stock Option Plan. On
September 25, 1997, the record date for eligibility to vote, the Company had
2,727,412 outstanding shares of Common Stock. Each share of Common Stock
outstanding is entitled to one vote. 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. Abstentions, broker non-votes, and
withheld votes are voted neither "for" nor "against" a proposal, but are
counted in the determination of a quorum.
PROPOSAL NO. 1 - APPROVAL OF AMENDMENT TO THE 1995 STOCK OPTION PLAN
The shareholders of the Company are being asked to approve an amendment
to the Company's 1995 Stock Option Plan (the "1995 Plan" or the "Plan") to
increase from 1,011,000 to 1,511,000 the number of shares of Common Stock
reserved for issuance under the Plan. The following description of the 1995
Plan is qualified in its entirety by reference to the 1995 Plan, a copy of
which is attached as Exhibit A.
BACKGROUND
In 1995, the Board of Directors adopted and the Company's shareholders
approved 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 1,011,000 shares of
Common Stock were authorized for issuance under options granted under the 1995
Plan at exercise prices which are not less than 100% of the fair market value
of the underlying shares on the date of grant of the option. As of May 28,
1997, there were no additional shares available for the granting of additional
options in the future.
The purpose of the 1995 Plan is to attract, retain and motivate
directors, officers, selected employees and consultants of the Company, as
well as officers and selected employees of any subsidiary thereof, by
affording them an opportunity to acquire a proprietary interest in the Company
and to thereby create in such persons an increased interest and a greater
concern for the welfare of the Company. Because no additional shares are
available for issuance under the 1995 Plan, the approval of the amendment to
the Plan will enable the Company to continue offering a valuable incentive to
existing and future personnel and representatives of the Company.
The Plan is unfunded, is not a "qualified plan" within the meaning of
Section 401(a) of the Code
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<PAGE>
and is not subject to the provisions of the Employee Retirement Income
Security Act of 1974.
PLAN ADMINISTRATION
The 1995 Plan is administered by the Compensation Committee of the
Company's Board of Directors (the "Committee"), which consists of not less
than two members of the Board of Directors who qualify as "non-employee
directors" of the Company within the meaning of Rule 16b-3 promulgated by the
Securities and Exchange Commission pursuant to Section 16(b) of the Securities
Exchange Act of 1934 (the "Exchange Act"). The present members of the
Committee are Laurence C. Glazer, Isaac M. Pollak and Millard H. Pryor, Jr.
The Committee administers the 1995 Plan so as to conform with the provisions
of Rule 16b-3.
AUTHORIZED SHARES
Subject to possible adjustment in the event of a recapitalization, stock
split or similar transaction, a total of 1,011,000 shares of Common Stock may
be issued upon the exercise of options granted under the 1995 Plan. The
proposed amendment to the 1995 Plan calls for the authorization of an
additional 500,000 shares of Common Stock over the amount previously
authorized for issuance under the 1995 Plan. Options to purchase an aggregate
of 1,108,284 shares of Common Stock under the 1995 Plan have been issued in
the past, of which options to purchase 270,471 shares have been exercised and
options to purchase 49,264 shares have either terminated or lapsed. As of
September 25, 1997, options to purchase a total of 837,813 shares of Common
Stock under the 1995 Plan, at prices ranging from $1.085 to $11.00 per share,
were outstanding. Therefore, options to purchase 97,284 shares have been
granted which are in excess of the total amount of shares previously
authorized by shareholders for possible issuance under the 1995 Plan. However,
of the currently outstanding options, options for only 517,104 shares are
currently vested and exercisable. The exercisability and vesting of options to
purchase a total of 97,284 shares is specifically conditioned upon shareholder
approval of the proposed amendment to the 1995 Plan increasing the number of
shares authorized for possible issuance thereunder.
The 1995 Plan provides that if any shares underlying outstanding options
cease to be subject to purchase thereunder due to expiration or termination of
the options, such shares thereafter will be available to underlie newly
granted options under the 1995 Plan.
ELIGIBILITY AND PARTICIPATION
Options may be granted under the 1995 Plan to four categories of
optionees: (i) certain selected employees and officers of the Company or any
subsidiary thereof who are regularly employed on a salaried basis (the
"Officer/Employee Participants"); (ii) directors of the Company, other than
members of the Committee, who are not officers or employees of the Company
(the "Director Participants"); (iii) consultants or advisors to the Company,
provided that the services rendered by such persons are not in connection with
the offer or sale of securities in a capital-raising transaction (the
"Consultant Participants"); and (iv) members of the Committee (the "Committee
Participants").
The Committee has the authority and discretion to determine the
Officer/Employee Participants, the Director Participants and the Consultant
Participants and the terms of the options to be granted under the 1995 Plan to
such persons. Those three categories of optionees are hereinafter referred to
as the "Grant Participants." The Committee has no authority or discretion
under the 1995 Plan with respect to options granted to Committee Participants,
as the identity of such optionees and the terms of the options granted to them
are fixed by the terms of the 1995 Plan.
OPTIONS FOR GRANT PARTICIPANTS
Options granted to Grant Participants may either be incentive stock
options ("Incentive Options") within the meaning of Section 422 of the Code or
options that do not meet the requirements for
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<PAGE>
Incentive Options ("Non-Qualified Options"), provided that Incentive Options
may be granted only to Officer/Employee Participants. The Committee has the
authority to grant options to Grant Participants during the ten-year period
following the date on which the 1995 Plan was approved by the holders of a
majority of the Company's outstanding shares of Common Stock and Preferred
Stock voting as a single class. Grant Participants receiving options may not
sell or otherwise dispose of any Common Stock acquired upon the exercise of
such options for a period of six months following the date of grant of the
options.
The terms of each option will be set forth in a stock option agreement
entered into by the Company with the optionee. The exercise price will be not
less than 100% of the fair market value per share of the Common Stock on the
date of grant; provided, however, that in the case of an Incentive Option
granted to a person who owns more than 10% of the Company's outstanding
shares, the exercise price will be not less than 110% of the fair market value
per share on the date of grant. The fair market value of the Common Stock is
the average of the high and low sale prices of the Common Stock on the date of
such determination or, if there are no sales on such date, the average
reported closing bid and asked prices for a share on such date. If the shares
are not listed on a national securities exchange or quoted by NASDAQ, the fair
market value of the Common Stock will be determined in good faith by the
Committee.
The exercise price of an option is payable upon the exercise thereof and
may be made (i) in cash; (ii) by a commitment by a broker-dealer to pay to the
Company that portion of any sale proceeds receivable by the optionee upon
exercise of the option and sale of underlying shares; or (iii) in the
discretion of the Committee, by delivery to the Company of shares of Common
Stock owned by the optionee and valued as of the business day immediately
preceding the date of exercise of the option.
Options vest and become exercisable upon the dates and in the amounts set
forth in the particular stock option agreement between the Company and the
optionee. Under the 1995 Plan, options expire not later than five years from
the date of grant of the option. In the event of the death or termination of
employment due to disability of an optionee, the option vests in full and
becomes immediately exercisable and remains exercisable for one year after the
date of such death or termination of employment (but not after the expiration
or termination of the option). In the event an Officer/Employee Participant
retires, the options held by such optionee vest in full and become immediately
exercisable and remain exercisable for three months after such termination of
employment (but not after the expiration or termination of the option). If the
employment of an Officer/Employee Participant is terminated for any reason
other than death, disability or retirement, such optionee has the right to
exercise the option, to the extent it is exercisable, for 30 days after such
termination of employment (but not after the expiration or termination of the
option). In the event a Director Participant ceases to be a director of the
Company, such optionee has the right to exercise the option, to the extent it
is exercisable, for 90 days after the date of such cessation of directorship
(but not after the expiration or termination of the option).
OPTIONS FOR COMPENSATION COMMITTEE MEMBERS
During the ten-year term of the 1995 Plan, a Non-Qualified Option to
purchase 2,000 shares of Common Stock will be granted to each member of the
Compensation Committee (i) on the date that such director commences service on
the Committee and (ii) on the date of any subsequent Annual Meeting of
Shareholders of the Company at which the director is elected and appointed or
reappointed to serve on the Committee. Such grants occur automatically under
the 1995 Plan and the options become fully exercisable immediately upon grant
as to all of the shares covered thereby. Committee Participants may not sell
or otherwise dispose of any Common Stock acquired upon the exercise of an
option for a period of six months following the date of grant.
The exercise price of options granted to Committee Participants will be
equal to the fair market value per share of the Common Stock as of the date
the option is granted. The exercise price may be paid by any of the methods
described above with respect to options exercised by Grant Participants.
Options granted to Committee Participants expire five years from the date of
grant; provided, however, that such
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<PAGE>
options will earlier expire 90 days after the Committee Participant ceases to
be a director of the Company. In the event of the death of any Committee
Participant, however, the estate of the Committee Participant will have the
right for one year after the date of death (but not after the expiration or
termination of the option) to exercise such Committee Participant's options.
OPTIONS FOR EMPLOYEES AND CONSULTANTS OF AMBIA CORPORATION
On July 22, 1997, the Company acquired 100% of the issued and outstanding
capital stock of AMBIA Corporation, a California corporation ("AMBIA"),
through the issuance of 400,000 shares of the Company's common stock, par
value $.03 per share (the "Common Stock"), to AMBIA's shareholders, Alan
Fisher and Razi Mohiuddin (collectively, the "AMBIA Shareholders"). The
acquisition was accomplished by means of a merger (the "Merger") of AMBIA
Acquisition Corporation, a Delaware corporation ("Acquisition") and
wholly-owned subsidiary of the Company, with and into AMBIA, pursuant to the
terms of the Agreement of Merger and Plan of Reorganization, dated as of July
22, 1997 (the "Agreement"), by and among the Company, AMBIA, the AMBIA
Shareholders, Software Partners, Inc., a Delaware corporation ("SPI"), and
Acquisition.
As a result of the Merger, all of the issued and outstanding shares of
AMBIA were exchanged for and converted into 400,000 shares of the Company's
Common Stock, with one share paid to the AMBIA Shareholders in cash in lieu of
a fractional share, 339,999 shares delivered to the Shareholders and 60,000
shares delivered to an escrow agent. In addition, each outstanding option
("AMBIA Stock Option") to purchase shares of AMBIA common stock under the
former AMBIA Equity Incentive Plan (as defined in the Merger Agreement) was
converted into an option ("Replacement Option") to acquire, on the same terms
and conditions as were applicable under such AMBIA Stock Option, 4/45 shares
of Common Stock of the Company, at an exercise price of $1.69 per share with
the same expiration date as each such AMBIA Stock Option. Replacement Options
to purchase a total of 34,650 shares of the Company's Common Stock were
granted to replace the previously granted AMBIA Stock Options. Pursuant to the
Merger Agreement, each Replacement Option is to be treated as a non-qualified
stock option under the Code and, if possible, as granted pursuant to the terms
and conditions of the 1995 Plan and the AMBIA Stock Option agreement entered
into by AMBIA and the participant in the AMBIA Equity Incentive Plan.
Pursuant to a Consent and Waiver dated August 27, 1997, the AMBIA
Shareholders have agreed to waive the requirement under the Merger Agreement
that the Company file a Form S-8 Registration Statement relating to the shares
underlying the Replacement Options within 45 days of the Effective Time of the
Merger. In exchange for such waiver, the Company has agreed to make the
Replacement Options subject to the terms and conditions of the Plan. In
addition, the Company is obligated to file a Form S-8 for the shares
underlying the Replacement Options no later than 60 days after the Company's
shareholders approve the proposed amendment to the 1995 Plan. The Company will
issue new stock option agreements for the Replacement Options as soon as
practicable.
CHANGE OF CONTROL
The 1995 Plan provides that upon the occurrence of an event constituting
a "change of control," all options granted under the 1995 Plan immediately
become fully exercisable. A "change of control" will be deemed to have
occurred under the 1995 Plan if any person or organization becomes the
beneficial owner, directly or indirectly, of either (i) a majority of the
Company's outstanding shares of Common Stock or (ii) securities of the Company
representing a majority of the combined voting power of the Company's then
outstanding voting securities.
NON-TRANSFERABILITY
Options granted under the 1995 Plan may not be assigned or transferred by
an optionee except by will or the laws of descent and distribution or, except
as to Incentive Options, pursuant to a qualified domestic relations order as
defined in the Code. During the lifetime of the optionee, options granted
under the 1995 Plan will be exercisable only by the optionee or the optionee's
guardian or legal
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<PAGE>
representative.
AMENDMENT OF THE 1995 PLAN
The Board of Directors of the Company has the right to amend, modify,
suspend or terminate the 1995 Plan at any time, provided that no amendment may
be made without shareholder approval to (i) increase the number of shares of
Common Stock which may be issued pursuant to the 1995 Plan, (ii) materially
increase the benefits accruing to participants under the 1995 Plan, (iii)
decrease the minimum exercise price in the case of an Incentive Option or (iv)
materially modify the provisions of the 1995 Plan relating to eligibility to
receive options. The 1995 Plan provides that no amendment, modification,
suspension or termination of the 1995 Plan may, without the consent of the
optionee, adversely alter or impair any previously granted option.
FEDERAL INCOME TAX TREATMENT
The following is a brief description of the federal income tax treatment
which generally applies to options granted under the 1995 Plan, based on
federal income tax laws in effect on the date hereof.
INCENTIVE STOCK OPTIONS
Pursuant to the 1995 Plan, Officer/Employee Participants may be granted
options which are intended to qualify as Incentive Options under the
provisions of Section 422 of the Code. Generally, the optionee is not taxed
and the Company is not entitled to a deduction on the grant or the exercise of
an Incentive Option. However, if the optionee disposes of the shares acquired
upon the exercise of an Incentive Option at any time within (i) one year after
the date the shares are transferred to the optionee pursuant to the exercise
of such Incentive Option or (ii) two years after the date of grant of such
Incentive Option (a "disqualifying disposition"), the optionee will recognize
ordinary income in an amount equal to the excess, if any, of the lesser of the
amount realized on the date of such disposition or the fair market value of
the Company's stock on the date of exercise, over the exercise price of such
Incentive Option (with any remaining gain being taxed as a capital gain). In
such an event, the Company generally will be entitled to a deduction in an
amount equal to the amount of ordinary income recognized by such optionee. If
the optionee does not dispose of the option shares within the above described
time limits, there will be no ordinary income recognized upon any subsequent
sale or other disposition of the shares, but rather capital gain or loss will
be recognized in an amount equal to the difference between the amount realized
on the sale or disposition and the exercise price. The Company will not be
entitled to any deduction in this event. Finally, exercise of an Incentive
Option may result in alternative minimum tax liability for the optionee. Any
excess of the fair market value of the stock on the date the Incentive Option
is exercised over the option exercise price will be included in the
calculation of the optionee's alternative minimum taxable income, which may
subject the optionee to the alternative minimum tax. The portion of any such
alternative minimum tax attributable to the exercise of an Incentive Stock
Option can be credited against the optionee's regular tax liability in later
years to the extent that in any such year the optionee's regular tax liability
exceeds the alternative minimum tax.
NON-QUALIFIED STOCK OPTIONS
The grant of an option which does not qualify for treatment as an
Incentive Option generally is not a taxable event for the optionee. However,
upon exercise, the optionee generally will recognize ordinary income in an
amount equal to the excess of the fair market value of the stock acquired upon
exercise (determined as of the date of exercise) over the exercise price of
such option, and the Company will generally be entitled to a deduction equal
to such amount. Upon the later disposition of the option shares acquired upon
exercise, appreciation (or depreciation) after the date of exercise will be
treated as capital gain (or loss) to the optionee and will have no tax effect
as to the Company.
SPECIAL RULES FOR SECTION 16 INSIDERS
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If a Non-Qualified Option has been held for less than six months at the
time of exercise, and the exercise price of the option is equal to or less
than the fair market value of the acquired shares at the time of exercise, an
officer, director or more than 10% shareholder of the Company subject to the
provisions of Section 16 of the Exchange Act (an "Insider") will not be taxed
until the earlier of (i) the expiration of the six-month holding period
beginning on the date of grant of the Non-Qualified Option, or (ii) the sale
of the acquired shares, at which time the Insider will recognize ordinary
income in an amount equal to the excess, if any, of the then fair market value
of the acquired shares over the exercise price of the Non- Qualified Option.
Alternatively, pursuant to Section 83(b) of the Code, the Insider may file a
written election with the IRS within 30 days after exercise of the
Non-Qualified Option to recognize ordinary income equal to the excess, if any,
of the fair market value of the Common Stock on the date of exercise over the
exercise price. The capital gains holding period for the acquired shares will
commence immediately following the date on which the optionee is required to
recognize ordinary income, and any appreciation (or depreciation) realized
following such date will be taxed as a capital gain (or loss).
SECTION 162(M)
Section 162(m) of the Code precludes a public corporation from taking an
income tax deduction for certain compensation in excess of $1 million paid to
its chief executive officer or any of its four other highest paid executive
officers. This limitation does not apply to certain performance-based
compensation. Based upon the Code and the regulations under Section 162(m),
the Company believes that any compensation expense generated upon the exercise
of stock options granted under the Plan will be deductible by the Company for
federal income tax purposes to the extent the options are tied to
performance-based criteria.
PLAN BENEFITS
The table below shows the number of shares underlying stock options that
were granted during the following periods to the following individuals and
groups under the Plan:
<TABLE>
<CAPTION>
NAME AND POSITION/GROUP YEAR ENDED DECEMBER 31, 1996 PERIOD FROM JANUARY 1, 1997
THROUGH SEPTEMBER 25, 1997
<S> <C> <C>
Christopher P.Dettmar, Chief -- 15,000
Financial Officer
Harry Kaplowitz, President and
Director 20,000 7,500 (5)
Dr. Robert Loane, Senior Vice
President 6,000 (1) --
Richard M. Tworek, Executive
Vice President and Director 20,000 20,000
Current executive officer group 46,000 (2) 42,500 (7)
(4 persons)
Current directors who are not
executive officers as a group 93,998 (3) 56,498 (8)
(6 persons)
All employees (other than
current executive officers) as a 216,995 (4) 153,277 (9)
group (43 persons)
- - ------------------------------------------
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<FN>
(1) During 1996, Dr. Loane exercised an option to purchase 5,444 shares at an
exercise price of $1.085 per share.
(2) During 1996, the current executive officers as a group exercised options
to purchase a total of 5,444 shares at an exercise price of $1.085 per
share.
(3) During 1996, the current directors who are not executive officers as a
group exercised options to purchase a total of 124,530 shares at an
average exercise price of $1.244 per share.
(4) During 1996, the current employees who are not executive officers as a
group exercised options to purchase a total of 46,880 shares at an
average exercise price of $1.905 per share.
(5) During the period from January 1, 1997 through September 25, 1997, Mr.
Kaplowitz exercised options to purchase a total of 2,332 shares at an
exercise price of $5.619 per share.
(6) During the period from January 1, 1997 through September 25, 1997, Dr.
Loane exercised an option to purchase 8,550 shares at an exercise price
of $2.818 per share.
(7) During the period from January 1, 1997 through September 25, 1997,
current executive officers as a group exercised options to purchase a
total of 10,882 shares at an average exercise price of $3.418 per share.
(8) During the period from January 1, 1997 through September 25, 1997, the
current directors who are not executive officers as a group exercised
options to purchase a total of 9,332 shares at an average exercise price
of $3.172 per share.
(9) During the period from January 1, 1997 through September 25, 1997, the
current employees who are not executive officers as a group exercised
options to purchase a total of 29,725 shares at an average exercise price
of $3.423 per share.
</FN>
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR APPROVAL
OF THE AMENDMENT TO THE 1995 PLAN TO INCREASE THE NUMBER OF SHARES
AVAILABLE UNDER THE PLAN.
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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 of the Company as of August 31, 1997. Each beneficial owner has sole
voting and investment power with respect to such shares, unless otherwise
specified below.
<TABLE>
<CAPTION>
Name and Address Percent
of Beneficial Owner Number of Shares of Class
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Richard T. Bueschel
Suite 198 181,421 (1) 6.65%
48 Par-La-Ville Road
Hamilton HM 11 Bermuda
Alan S. Fisher
ONSALE, Inc.
1861 Landings Drive 252,878 (2) 9.27%
Mountain View, CA 94043
Harry Kaplowitz
Infodata Systems Inc.
12150 Monument Drive 152,533 (3) 5.59%
Fairfax, VA 22033
Razi Mohiuddin
Infodata Systems Inc.
1953 Landings Drive 147,121 (4) 5.40%
Mountain View, CA 94043
Richard M. Tworek
Infodata Systems Inc.
12150 Monument Drive 197,087 (5) 7.23%
Fairfax, VA 22033
- - ------------------------------
<FN>
(1) Includes 122,051 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
(2) Includes 37,391 shares subject to an Escrow Agreement dated July 22,
1997, by and among Alan Fisher, Razi Mohiuddin, the Company and
SETTLEMENTCORP as escrow agent, pursuant to which Mr. Fisher shall be
entitled to vote such shares.
(3) Includes 103,547 shares subject to presently exercisable stock options.
(4) Includes 22,069 shares subject to an Escrow Agreement dated July 22,
1997, by and among Alan Fisher, Razi Mohiuddin, the Company and
SETTLEMENTCORP as escrow agent, pursuant to which Mr. Mohiuddin shall be
entitled to vote such shares.
(5) Includes 13,333 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 owned on August
31, 1997, 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>
Amount and Nature Percent
NAME OF INDIVIDUAL of BENEFICIAL OF CLASS
OWNERSHIP
<S> <C> <C>
Richard T. Bueschel 181,421 (1) 6.65%
Alan S. Fisher 252,878 (2) 9.27%
Laurence C. Glazer 67,070 (3) 2.46%
Harry Kaplowitz 152,533 (4) 5.59%
Robert M. Leopold 115,780 (5) 4.25%
Robert J. Loane 67,355 (6) 2.47%
Isaac M. Pollak 109,372 (7) 4.01%
Millard H. Pryor, Jr. 28,828 (8) 1.06%
Richard M. Tworek 197,087 (9) 7.23%
All directors and
executive officers as a group (10 1,177,324 (10) 43.17%
persons)
- - ------------------------------
<FN>
(1) Includes 122,051 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
(2) Includes 37,931 shares subject to an Escrow Agreement dated July 22,
1997, by and among Alan Fisher, Razi Mohiuddin, the Company and
SETTLEMENTCORP as escrow agent, pursuant to which Mr. Fisher shall be
entitled to vote such shares.
(3) Includes 4,666 shares subject to presently exercisable stock options.
(4) Includes 103,547 shares subject to presently exercisable stock options.
(5) Includes 64,270 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
(6) Includes 14,886 shares subject to presently exercisable stock options.
(7) Includes 12,200 shares owned by LGP Ltd. Profit Sharing Trust for which
Mr. Pollak has sole voting and investment power. Includes 26,440 shares
subject to presently exercisable stock options.
(8) Includes 9,332 shares subject to presently exercisable stock options.
(9) Includes 13,333 shares subject to presently exercisable stock options.
(10) Includes 363,525 shares subject to presently exercisable stock options or
stock options exercisable
</FN>
</TABLE>
10
<PAGE>
within 60 days.
SOLICITATION OF PROXIES
The Company will bear the cost of solicitation of proxies. In addition to
solicitation by the use of mails, certain officers or employees, 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 1998 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 15, 1997.
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 Special Meeting, any matter other than what is
specifically referred to in this Proxy Statement. If any other matters
properly come before the Special Meeting, it is intended that the holders of
the proxies will act in respect thereto in accordance with their best
judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Harry Kaplowitz, President
Dated: Fairfax, Virginia
September 26, 1997
11
<PAGE>
EXHIBIT A
INFODATA SYSTEMS INC.
1995 AMENDED STOCK OPTION PLAN
1. PURPOSE
Infodata Systems Inc. (the "Company"), by means of this 1995 Stock Option
Plan (the "Plan"), desires to afford certain of its directors, officers and
certain selected employees, consultants and the officers and certain selected
employees of any subsidiary thereof now existing or hereafter formed or
acquired, an opportunity to acquire a proprietary interest in the Company, and
thus to create in such persons an increased interest in and a greater concern
for the welfare of the Company and any subsidiary. The Plan is the successor
to the Company's Incentive Stock Option Plan and Non-Qualified Stock Option
Plan that were approved by the Company's shareholders in 1991 and 1992,
respectively (the "Prior Plans"). As used in the Plan, the term "subsidiary"
shall mean any entity in which the Company, directly or indirectly, owns a
controlling interest.
The stock options described in Sections 6 and 7 hereof (the "Options"),
and the shares of common stock, par value $.03 per share, of the Company (the
"Common Stock") acquired pursuant to the exercise of such Options are a matter
of separate inducement and are not in lieu of any salary or other compensation
for services.
The Options granted under Section 6 hereof are intended to be either
incentive stock options ("Incentive Options") within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), or options
that do not meet the requirements for Incentive Options ("Non-Qualified
Options"), but the Company makes no warranty as to the qualification of any
Option as an Incentive Option.
2. ADMINISTRATION
The Plan shall be administered by the Compensation Committee, or any
successor thereto, of the Board of Directors of the Company or by such other
committee as determined by the Board (the "Committee"). The Committee shall
consist of not less than two members of the Board of Directors of the Company,
each of whom shall qualify as a "disinterested person" to administer the Plan
within the meaning of Rule 16b-3, as amended, or other applicable rules under
Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Committee shall administer the Plan so as to conform at
all times with the provisions of Rule 16b-3 promulgated under the Exchange
Act. A majority of the Committee shall constitute a quorum, and subject to the
provisions of Section 5 hereof, the acts of a majority of the members present
at any meeting at which a quorum is present, or acts approved unanimously in
writing by the Committee, shall be the acts of the Committee.
The Committee may delegate to one or more of its members, or to one or
more agents, such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may
employ one or more persons to render advice with respect to any responsibility
the Committee or such person may have under the Plan. The Committee may employ
attorneys, consultants, accountants, or other persons and the Committee, the
Company and its officers and directors shall be
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<PAGE>
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all persons who have
received grants under the Plan, the Company and all other interested persons.
No member or agent of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan
and all members and agents of the Committee shall be fully protected by the
Company in respect of any such action, determination or interpretation.
3. SHARES AVAILABLE
Subject to the adjustments provided in Section 9 hereof, the maximum
aggregate number of shares of Common Stock which may be purchased pursuant to
the exercise of Options granted under the Plan shall not exceed 1,011,000.
[THIS AMOUNT WILL INCREASE TO 1,511,000 SHARES FOLLOWING APPROVAL BY THE
SHAREHOLDERS OF AN INCREASE IN THE NUMBER OF AVAILABLE SHARES UNDERLYING THE
OPTIONS.] If, for any reason, any shares as to which Options have been granted
cease to be subject to purchase thereunder, including without limitation the
expiration of such Options, the termination of such Options prior to exercise
or the forfeiture of such Options, such shares thereafter shall be available
for grants to such individual or other individuals under the Plan. Options
granted under the Plan may be fulfilled in accordance with the terms of the
Plan with either authorized and unissued shares of Common Stock or issued
shares of such Common Stock held in the Company's treasury or both, at the
discretion of the Company.
4. ELIGIBILITY AND BASES OF PARTICIPATION
Grants under the Plan (i) may be made, pursuant to Section 6 hereof, to
certain selected employees and officers (but not to any director who is not
also an employee) of the Company or any subsidiary thereof who are regularly
employed on a salaried basis and who are so employed on the date of such grant
(the "Officer and Certain Selected Employee Participants"); (ii) may be made,
pursuant to Section 6 hereof, to directors of the Company, other than
Committee Participants (as defined below), who are not employees and who are
retained by the Company in such capacity on the date of such grant (the
"Director Participants"); (iii) may be made, pursuant to Section 6 hereof, to
consultants or advisors, provided that the services rendered by such
consultants or advisors shall not be in connection with the offer or sale of
securities in a capital-raising transaction (the "Consultant Participants")
(the Officer and Certain Selected Employee Participants, Director Participants
and Consultant Participants are hereinafter collectively referred to as the
"Grant Participants"); and (iv) may be made, pursuant to Section 7 hereof, to
individuals who serve on the Committee or have been named to serve on the
Committee in the future (the "Committee Participants").
5. AUTHORITY OF COMMITTEE
Subject to and not inconsistent with the express provisions of the Plan
and the Code, the Committee shall have plenary authority, in its sole
discretion, to:
a. other than with respect to Committee Participants, determine the
persons to whom Options shall be granted, the time when such Options
shall be granted, the number of shares of Common Stock underlying
each Option, the purchase price or exercise price of each Option,
the restrictions to be applicable to Options and the other terms and
provisions thereof (which need not be identical);
A-2
<PAGE>
b. provide an arrangement through registered broker-dealers whereby
temporary financing may be made available to an optionee by the
broker-dealer for the purpose of assisting the optionee in the
exercise of an Option;
c. establish procedures for an optionee to pay the exercise price of an
Option in whole or in part by delivering that number of shares of
Common Stock owned by such optionee; or for the collection of any
taxes required by any government to be withheld or otherwise
deducted and paid by the Company or any subsidiary in respect of the
issuance or disposition of Common Stock acquired pursuant to the
exercise of an Option granted hereunder, which procedures may
include payment in whole or in part through the delivery of shares
of Common Stock owned by the optionee valued on the basis of the
Fair Market Value (as defined in Section 11 hereof) on the date
preceding such exercise;
d. prescribe, amend, modify and rescind rules and regulations relating
to the Plan;
e. make all determinations specified in or permitted by the Plan or
deemed necessary or desirable for its administration or for the
conduct of the Committee's business; and
f. establish any procedures determined to be appropriate in discharging
its responsibilities under the Plan.
6. STOCK OPTIONS FOR GRANT PARTICIPANTS
The Committee shall have the authority, in its sole discretion, to grant
Incentive Options or Non- Qualified Options or both Incentive Options and
Non-Qualified Options to Grant Participants (any such Options are hereinafter
collectively referred to as the "Participant Options") during the period
beginning on the date on which the Plan is approved by the holders of a
majority of the Company's outstanding shares of Common Stock and Preferred
Stock, voting as a class (the "Effective Date") and ending on the tenth
anniversary of the Effective Date (the "Termination Date"). Notwithstanding
anything contained herein to the contrary, Incentive Options may be granted
only to Officer and Certain Selected Employee Participants. As a condition to
the granting of any Option, the Committee shall require that the person
receiving such Option agree not to sell or otherwise dispose of any Common
Stock acquired pursuant to such Option for a period of six months following
the date of the grant of such Option. The terms and conditions of the
Participant Options shall be determined from time to time by the Committee;
PROVIDED, HOWEVER, that the Participant Options granted under the Plan shall
be subject to the following:
a. EXERCISE PRICE. The exercise price for each share of Common Stock
purchasable under any Participant Option granted hereunder shall be
such amount as the Committee, in its best judgment, shall determine
to be not less than 100% of the Fair Market Value (as defined in
Section 11 hereof) per share on the date the Participant Option is
granted; PROVIDED, HOWEVER, that in the case of an Incentive Option
granted to a person who, at the time such Incentive Option is
granted, owns shares of capital stock of the Company, or of any
subsidiary of the Company, having more than 10% of the total
combined voting power of all classes of shares of capital stock of
the Company or of such subsidiary, the exercise price for each share
shall be not less than 110% of the Fair Market Value (as defined in
Section 11 hereof) per share on the date the Incentive Option is
granted. In determining the stock ownership of a person for purposes
of this Section 6, the rules of Section 424(d) of the Code shall be
applied and the Committee may rely on representations of fact made
to it
A-3
<PAGE>
by such person and believed by it to be true. The exercise price of
the Participant Options will be subject to adjustment in accordance
with the provisions of Section 9 hereof.
b. PAYMENT. The exercise price per share of Common Stock with respect
to each Participant Option shall be payable at the time the
Participant Option is exercised. Such price shall be payable in
cash, which may be paid by wire transfer in immediately available
funds, by check, by a commitment by a broker-dealer to pay to the
Company that portion of any sale proceeds receivable by the optionee
upon exercise of a Participant Option or by any other instrument
acceptable to the Company or, in the discretion of the Committee, by
delivery to the Company of shares of Common Stock. Shares delivered
to the Company in payment of the exercise price shall be valued at
the Fair Market Value (as defined in Section 11 hereof) of the
Common Stock on the business day immediately preceding the date of
the exercise of the Participant Option.
c. EXERCISABILITY OF PARTICIPANT OPTIONS. Subject to this Section 6 and
Section 8 hereof, each Participant Option shall vest and become
exercisable on the dates and in the amounts set forth in the
particular stock option agreement between the Company and the
optionee; PROVIDED, HOWEVER, that a Participant Option shall expire
not later than five years from the date such Option is granted. The
right to purchase shares shall be cumulative so that when the right
to purchase any shares has accrued, such shares or any part thereof
may be purchased at any time thereafter until the expiration or
termination of the Participant Option.
d. DEATH. In the event of the death of an optionee, all Participant
Options held by such optionee on the date of such death shall vest
in full and become immediately exercisable. Upon such death, the
legal representative of such optionee, or such person who acquired
such Participant Options by bequest or inheritance or by reason of
the death of the optionee, shall have the right for one year after
the date of death (but not after the expiration or termination of
the Participant Options), to exercise such optionee's Participant
Options with respect to all or any part of the shares of Common
Stock subject thereto.
e. DISABILITY. If the employment of an optionee is terminated because
of Disability (as defined in Section 11 hereof), all Participant
Options held by such optionee on the date of such termination shall
vest in full and become immediately exercisable. Such optionee shall
have the right for one year after the date of such termination (but
not after the expiration or termination of the Participant Options),
to exercise such optionee's Participant Options with respect to all
or any part of the shares of Common Stock subject thereto.
f. RETIREMENT. In the event the employment of an Officer and Certain
Selected Employee Participant is terminated by reason of the
Retirement (as defined in Section 11 hereof) of the optionee, all
Participant Options held by such optionee on the date of such
termination shall vest in full and become immediately exercisable.
Such optionee shall have the right for three months after the date
of such termination (but not after the expiration or termination of
the Participant Options), to exercise such optionee's Participant
Options with respect to all or any part of the shares of Common
Stock subject thereto. The Committee, in its discretion, shall
determine whether an optionee's employment was terminated by reason
of Retirement and whether such optionee is entitled to the treatment
afforded by this
A-4
<PAGE>
subsection f.
g. OTHER TERMINATION. If the employment of an Officer and Certain
Selected Employee Participant is terminated for any reason other
than those specified in subsections d, e, and f of this Section 6,
such optionee shall have the right for 30 days after the date of
such termination (but not after the expiration or termination of the
Participant Options), to exercise such optionee's Participant
Options with respect to all or any part of the shares of Common
Stock which such optionee was entitled to purchase immediately prior
to the time of such termination.
h. CESSATION OF DIRECTORSHIP. In the event a Director Participant shall
cease to be a director of the Company, such optionee shall have the
right for 90 days after the date of such cessation (but not after
the expiration or termination of the Participant Options), to
exercise such optionee's Participant Options with respect to all or
any part of the shares of Common Stock subject thereto.
i. MAXIMUM EXERCISE. To the extent the aggregate Fair Market Value (as
defined in Section 11 hereof) of Common Stock (determined at the
time of the grant) with respect to which Incentive Options are
exercisable for the first time by an optionee during any calendar
year under all plans of the Company or any subsidiary, exceeds
$100,000, or such other amount as may be prescribed under Section
422 of the Code or applicable regulations or rulings from time to
time, the excess thereof shall be treated as Non-Qualified Options
and not as Incentive Options.
7. STOCK OPTION GRANTS TO COMMITTEE PARTICIPANTS
During the term of the Plan, on the date that a director of the Company
commences service on the Committee (which in the case of the initial members
of the Committee shall be deemed to be the Effective Date), and on the date of
any subsequent annual meeting of the holders of the Common Stock at which a
director is elected and appointed or reappointed to serve on the Committee,
such Committee Participant automatically shall be granted a Non-Qualified
Option to purchase 2,000 shares of Common Stock, which Non-Qualified Option,
except as otherwise provided in this Section 7 or Section 8 hereof, shall
become fully exercisable immediately upon grant as to all of the shares
covered thereby. (A Non-Qualified Option granted to a Committee Participant
pursuant to this Section 7 is referred to as a "Committee Option".) As a
condition to the granting of any Committee Option, the person receiving such
Committee Option shall agree not to sell or otherwise dispose of any Common
Stock acquired pursuant to such Option for a period of six months following
the date of the grant of such Option. The terms and conditions of the
Committee Options shall be as follows:
a. OPTION PRICE. The exercise price of each share of Common Stock
purchasable under any Committee Options shall be such amount as the
Committee, in its best judgment, shall determine to be 100% of the
Fair Market Value (as defined in Section 11 hereof) per share at the
date the Committee Option is granted.
b. PAYMENT. The exercise price per share of Common Stock with respect
to each Committee Option and any withholding tax due in connection
with such exercise may be paid by any of the methods described under
Section 6b hereof.
A-5
<PAGE>
c. EXERCISABILITY. Except as provided in subsection d of this Section
7, no Committee Option shall be exercisable after the earlier of (i)
the expiration of five years from the date such Committee Option is
granted and (ii) 90 days after such Committee Participant ceases for
any reason to be a director of the Company.
d. DEATH. In the event of the death of any Committee Participant, the
estate of the Committee Participant shall have the right for one
year after the date of death (but not after the expiration or
termination of such Committee Options), to exercise such Committee
Partici pant's Committee Options with respect to all or any part of
the shares of Common Stock subject thereto.
e. AMENDMENT. The provisions of this Section 7 shall not be amended
more than one time in any six-month period, other than to comport
with any amendments to the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules and regulations
thereunder.
8. CHANGE OF CONTROL
Notwithstanding any provision herein to the contrary, upon the occurrence
of an event constituting a Change of Control (as defined in Section 11
hereof), all Options granted under the Plan immediately shall become fully
exercisable.
9. ADJUSTMENT OF SHARES
In the event the outstanding shares of Common Stock shall be increased or
decreased or changed into or exchanged for a different number of kind of
shares of stock or other securities of the Company or another corporation by
reason of any consolidation, merger, combination, liquidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares or other like change in capital
structure of the Company, the number or kind of shares or interests subject to
an Option and the per share price or value thereof shall be appropriately
adjusted by the Committee at the time of such event. Any fractional shares or
interests resulting from such adjustment shall be eliminated. Notwithstanding
the foregoing, (i) each such adjustment with respect to an Incentive Option
shall comply with the rules of Section 424(a) of the Code and (ii) in no event
shall any adjustment be made that would result in an Incentive Option failing
to be treated as an "incentive stock option" for purposes of Section 422 of
the Code. In addition, in such event the Board of Directors of the Company
shall appropriately adjust the number of shares of Common Stock for which
Options may be granted under the Plan.
10. MISCELLANEOUS PROVISIONS
a. ASSIGNMENT OR TRANSFER. No grant of any "derivative security" (as
defined by Rule 16a-1(c) under the Exchange Act) made under the Plan
or any rights or interests therein shall be assignable or
transferable by an optionee except by will or the laws of descent
and distribution or, except as to Incentive Options, pursuant to a
qualified domestic relations order as defined in the Code. During
the lifetime of an optionee, Options granted
A-6
<PAGE>
hereunder shall be exercisable only by the optionee or the
optionee's guardian or legal representative.
b. INVESTMENT REPRESENTATION. If a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Common Stock issuable upon exercise of an Option is
not in effect at the time such Option is exercised, the Company may
require, for the sole purpose of complying with the Securities Act,
that prior to delivering such Common Stock to the exercising
optionee such optionee must deliver to the Secretary of the Company
a written statement (i) representing that such Common Stock is being
acquired for investment only and not with a view to the resale or
distribution thereof, (ii) acknowledging that such Common Stock may
not be sold unless registered for sale under the Securities Act or
pursuant to an exemption from such registration and (iii) agreeing
that the certificates evidencing such Common Stock shall bear a
legend to the foregoing effect.
c. COSTS AND EXPENSES. The costs and expenses of administering the Plan
shall be borne by the Company and shall not be charged against any
Option nor to any person receiving an Option.
d. FUNDING OF PLAN. The Plan shall be unfunded. The Company shall not
be required to make any segregation of assets to assure the
satisfaction of any Option under the Plan.
e. OTHER INCENTIVE PLANS. The adoption of the Plan does not preclude
the adoption by appropriate means of any other incentive plan for
officers, directors or employees.
f. EFFECT ON EMPLOYMENT. Nothing contained in the Plan or any agreement
related hereto or referred to herein shall affect, or be construed
as affecting, the terms of employment of any Grant Participants
except to the extent specifically provided herein or therein.
Nothing contained in the Plan or any agreement related hereto or
referred to herein shall impose, or be construed as imposing, an
obligation on (i) the Company or any subsidiary to continue the
employment of any Grant Participant or (ii) any Grant Participant to
remain in the employ of the Company or any subsidiary.
g. TERMINATION OR SUSPENSION OF THE PLAN. The Board of Directors may at
any time suspend or terminate the Plan. The Plan, unless sooner
terminated under Section 12 of the Plan or by action of the Board of
Directors, shall terminate at the close of business on the
Termination Date. Options may not be granted while the Plan is
suspended or after it is terminated. Rights and obligations under
any Option granted while the Plan is in effect shall not be altered
or impaired by suspension or termination of the Plan, except with
the consent of the person to whom the Option was granted. The power
of the Committee to construe and administer any Option granted prior
to the termination or suspension of the Plan nevertheless shall
continue after such termination or during such suspension.
h. SAVINGS PROVISION. With respect to persons subject to Section 16 of
the Exchange Act, the transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails so to comply, it shall be
deemed null and void to the extent permitted by law.
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<PAGE>
i. PARTIAL INVALIDITY. The invalidity or illegality of any provision
herein shall not be deemed to affect the validity of any other
provision.
11. DEFINITIONS
a. "Fair Market Value", as it relates to the Common Stock, shall mean
the average of the high and low sale prices of such Common Stock on
the date such determination is required herein, or if there were no
sales on such date, the average closing bid and asked prices, as
reported on the national securities exchange on which the Company's
Common Stock is listed or, in the absence of such listing, on the
Nasdaq National Market or Small Cap Market or, if such Common Stock
is not at the time listed on a national securities exchange or
traded on the Nasdaq National Market or Small Cap Market, the value
of such Common Stock on such date as determined in good faith by the
Committee.
b. "Disability" shall have the meaning set forth in Section 22(e)(3) of
the Code.
c. "Change of Control" shall be deemed to have occurred if, subsequent
to the Effective Date of this Plan, any "person" (as such term is
defined in Section 13(d) of the Exchange Act) becomes the beneficial
owner, directly or indirectly, of either (x) a majority of the
Common Stock or (y) securities of the Company representing a
majority of the combined voting power of the Company's then
outstanding voting securities.
d. "Retirement" shall mean the date upon which a Grant Participant,
having attained an age as may be determined by the Committee in its
sole discretion, terminates his employment with the Company or any
subsidiary, provided that such Grant Participant has been employed
by the Company or any subsidiary.
12. AMENDMENT OF PLAN
The Board of Directors of the Company shall have the right to amend,
modify, suspend or terminate the Plan at any time, provided that no amendment
shall be made without shareholder approval which shall (i) increase the total
number of shares of the Common Stock of the Company which may be issued and
sold pursuant to Options granted under the Plan (except for increases due to
adjustments in accordance with Section 9 hereof), (ii) materially increase the
benefits accruing to participants under the Plan, (iii) decrease the minimum
exercise price in the case of an Incentive Option or (iv) materially modify
the provisions of the Plan relating to eligibility with respect to Options. In
no event may the Plan be amended in any way that would retroactively impair
the Committee's discretion. The Board of Directors shall be authorized to
amend the Plan and the Options granted thereunder (A) to qualify such Options
as "incentive stock options" within the meaning of Section 422 of the Code or
(B) to comply with Rule 16b-3 (or any successor rule) under the Exchange Act.
No amendment, modification, suspension or termination of the Plan, without the
consent of the holder thereof, shall adversely alter or impair any Options
previously granted under the Plan.
13. EFFECTIVE DATE
The Plan shall become effective on the Effective Date. Subject to the
right of the Board of Directors to terminate the Plan at any time pursuant to
Section 12 hereof, the Plan shall remain in effect
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<PAGE>
until the earlier of (i) the date that Options covering all shares of Common
Stock issuable under the Plan have been granted or (ii) the Termination Date.
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<PAGE>
PROXY
INFODATA SYSTEMS INC.
The undersigned hereby appoints CURTIS D. CARLSON and HARRY KAPLOWITZ, or
either of them individually, with full power of substitution, to act as proxy
and to represent the undersigned and to vote all shares of common stock of
Infodata Systems Inc. which the undersigned is entitled to vote and would
possess if personally present at a Special Meeting of Shareholders to be held
at the Company's headquarters on Wednesday, November 5, 1997, at 10:00 a.m.
and at all adjournments thereof upon the following matters:
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY
WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 LISTED ON THE
REVERSE SIDE. PROXIES ARE GRANTED THE DISCRETION TO VOTE UPON ALL OTHER
MATTERS THAT MAY PROPERLY BE BROUGHT BEFORE THE MEETING.
(Continued, and to be signed on reverse side)
FOLD AND DETACH HERE
<PAGE>
[X] Please mark
your vote
as this example
FOR AGAINST ABSTAIN Change of
Address [ ]
[ ] [ ] [ ]
1. Approval of Amendment
to 1995 Stock Option Plan
I plan to I do not plan
attend the [ ] to attend the [ ]
meeting meeting
SIGNATURE(S)_____________________DATE_____________
NOTE: Please sign exactly as your name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full titles as such.
