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
[X] Definitive proxy statement
[ ] 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] 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 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:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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.
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(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 1997 ANNUAL MEETING OF SHAREHOLDERS
May 28, 1997
--------------------------------
The Annual Meeting of the Shareholders of Infodata Systems Inc. (the
"Company") will be held at The Penn Club of New York, 30 West 44th Street, New
York, NY 10036, on Wednesday, May 28, 1997, at 10:00 a.m. for the following
purposes:
1. To elect seven directors to serve until their respective successors are
elected and qualified;
2. To approve the proposed 1997 Employee Stock Purchase Plan of the Company;
and
3. 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 4, 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
April 30, 1997
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 and FOR approval of the proposed 1997 Employee Stock
Purchase Plan of the Company.
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. On April
4, 1997 the record date for eligibility to vote, the Company had 2,307,887
outstanding shares of Common Stock, par value $.03 per share. 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.
BOARD COMMITTEES
The Board of Directors is responsible for the overall affairs of the
Company and held six meetings either in-person or by telephone during the year
ended December 31, 1996. 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,
Robert M. Leopold and Richard M. Tworek. 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, 1996, either in-person or
telephonic meetings of the Executive Committee were held on the average of
twice per month.
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;
2
<PAGE>
and reviewing the scope of the audit and the results of the audit examination.
During 1996, the Audit Committee held two meetings.
The Nominating Committee held one meeting in 1996. 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 five meetings either in-person or by
telephone in 1996. 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 1996, 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.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Seven 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 seven nominees
of the Board of Directors listed below, unless the proxy instructs otherwise.
In the event that any of the seven 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 64 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. He is
Chairman of the Board of Directors of Communications Management Systems and a
Director of Study.Net.
LAURENCE C. GLAZER AGE 51 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.
HARRY KAPLOWITZ AGE 53 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.
3
<PAGE>
ROBERT M. LEOPOLD AGE 71 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, Standard
Security Life Insurance Company of New York, H.E.R.C. Products Incorporated,
and Dental Services of America, Inc.
ISAAC M. POLLAK AGE 46 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 promotional items.
MILLARD H. PRYOR, JR. AGE 63 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.
RICHARD M. TWOREK AGE 40 DIRECTOR SINCE 1996
Mr. Tworek was elected Senior Vice President in 1995 and Executive Vice
President and director in 1996. He joined the Company in 1995. Mr. Tworek was
the founder of Merex, Inc., a designer and integrator of large, complex
client/server document systems, and from 1989 to 1995 he served as its
President.
PROPOSAL NO. 2 - APPROVAL OF 1997 EMPLOYEE
STOCK PURCHASE PLAN
On April 23, 1997, the Board of Directors of the Company approved the
adoption of the Company's 1997 Employee Stock Purchase Plan (the "SPP").
Approval of the SPP by the holders of a majority of the Company's outstanding
shares of Common Stock present or represented at the Annual Meeting is
required for the SPP to be duly adopted and become effective.
The following description of the material provisions of the proposed SPP
is qualified by reference to the full provisions of the SPP, a copy of which
is set forth as Exhibit A to this Proxy Statement.
ADMINISTRATION. The SPP will be administered by the Board of Directors of
the Company and/or by a duly appointed committee of non-employee members of
the Board having such powers as shall be specified by the Board. All
subsequent references herein to the Board also includes any such committee of
the Board. All questions of interpretation of the SPP or of any Purchase Right
(defined below) will be determined by the Board and will be final and binding
upon all persons having an interest in the SPP and/or any Purchase Right.
Subject to the provisions of the SPP, the Board will determine all of the
relevant terms and conditions of Purchase Rights granted pursuant to the SPP,
so long as all participants in the SPP who are granted Purchase Rights under
the SPP have the same rights and privileges within the meaning of Section
423(b)(5) of the Internal Revenue Code of 1986, as amended (the "Code"). All
expenses incurred in connection with the administration of the SPP will be
paid by the Company.
4
<PAGE>
PURPOSE. The purpose of the SPP will be to provide eligible employees
(defined below) with an opportunity to purchase Common Stock through payroll
deductions. The SPP is intended as an employment incentive and to encourage
stock ownership in order to participate in the possible future economic
progress of the Company during the term of the SPP.
ELIGIBLE EMPLOYEES. The SPP provides that any employee of the Company is
eligible to participate, on a purely voluntary basis, in the SPP except no
person who owns or holds options to purchase, or as a result of participation
in the SPP would own or hold options to purchase, 5% or more of the total
combined voting power or value of all classes of stock of the Company is
entitled to participate in the SPP. Approximately 90 persons currently will be
eligible to participate under the SPP.
NUMBER OF SHARES RESERVED FOR THE SPP. The Board has reserved a total of
200,000 shares of the authorized but unissued Common Stock of the Company for
issuance under the SPP.
MATERIAL FEATURES OF THE SPP. Each offering of Common Stock under the SPP
is for a period of three months (an "Offering Period"), commencing on the
first day of January, April, July and October (beginning with July 1, 1997)
and ending on the last day of March, June, September and December,
respectively of the same year. At the end of each Offering Period, shares are
issued based on the payroll deductions accumulated during that Offering
Period. Participation in the SPP is limited to eligible employees who
authorize payroll deductions pursuant to the SPP. Such payroll deductions must
be at least 1% but may not exceed 15% of an employee's compensation. Once an
employee becomes a participant in the SPP, that employee will automatically
participate in each successive offering until such time as that employee
withdraws from an offering or the SPP, becomes ineligible to participate in
the SPP, or his or her employment ceases.
The purchase price per share at which the shares of the Company's Common
Stock are sold in an offering will be set by the Board; provided, however,
that the purchase price shall not be less than 85% of the lesser of the fair
market value of the Common Stock on the first or the last day of the Offering
Period. Subject to certain limitations, the number of shares of the Company's
Common Stock a participant purchases in an Offering Period is determined by
dividing the total amount of payroll deductions withheld from the
participant's compensation during the Offering Period by the purchase price
per share. Participants may not purchase shares of the Company's Common Stock
having a fair market value exceeding $25,000 in any calendar year (measured by
the fair market value of the Company's Common Stock on the first day of the
Offering Period in which the shares are purchased). Any cash not applied to
the purchase of shares will be returned to the participant unless the amount
of such cash is less than the amount necessary to purchase a whole share of
Common Stock, in which case the Company may establish procedures to apply the
remaining amount to a subsequent Offering Period.
A participant may withdraw from an offering at any time without affecting
his or her eligibility to participate in future offerings. However, once a
participant withdraws from an offering, that participant may not again
participate in the same offering. A participant also may withdraw from the SPP
at any time.
The Board of Directors may at any time amend or terminate the SPP, except
that the approval of the Company's stockholders is required within twelve
months of the adoption of any amendment increasing the number of shares
authorized for issuance under the SPP (other than due to a change in the
capitalization of the Company such as a stock split or stock dividend). The
SPP will terminate at the time determined by the Board of Directors or when
all the shares reserved for issuance under the Purchase Plan have been issued,
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<PAGE>
whichever occurs first.
TRANSFERABILITY. The right to purchase shares under the SPP is
non-transferable.
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES OF THE SPP. The following
summary is intended only as a general guide as to the United States federal
income tax consequences under current law of participation in the SPP and does
not attempt to describe all potential tax consequences. Furthermore, the tax
consequences are complex and subject to change, and a taxpayer's particular
situation may be such that some variation of the described rules is
applicable.
A participant recognizes no taxable income either as a result of
commencing to participate in the SPP or purchasing shares of the Company's
Common Stock under the terms of the SPP. However, amounts deducted from a
participant's paycheck in order to purchase Shares under the SPP are taxable
as part of the participant's compensation (and included in the participant's
W-2 income) and deductible to the Company.
If a participant disposes of shares purchased under the SPP within two
years from the first day of the applicable Offering Period or within one year
from the date of purchase (which is the last day of an Offering Period) (a
"disqualifying disposition"), the participant will realize ordinary income in
the year of such disposition equal to the amount by which the fair market
value of the shares on the date the shares were purchased exceeds the purchase
price. The amount of the ordinary income will be added to the participant's
basis in the shares, and any additional gain or resulting loss recognized on
the disposition of the shares will be a capital gain or loss. A capital gain
or loss will be long-term if the participant's holding period is more than
twelve months, otherwise it will be short-term.
If the participant disposes of shares purchased under the SPP at least
two years after the first day of the applicable Offering Period and at least
one year after the date of purchase, the participant will realize ordinary
income in the year of disposition equal to the lesser of (i) the excess of the
fair market value of the shares on the date of disposition over the purchase
price or (ii) 15% of the fair market value of the shares on the first day of
the applicable Offering Period. The amount of any ordinary income will be
added to the participant's basis in the shares, and any additional gain
recognized upon the disposition after such basis adjustment will be a
long-term capital gain. If the fair market value of the shares on the date of
disposition is less than the purchase price, there will be no ordinary income
and any loss recognized will be a long-term capital loss.
If the participant still owns the shares at the time of death, the lesser
of (i) the excess of the fair market value of the shares on the date of death
over the purchase price or (ii) 15% of the fair market value of the shares on
the first day of the Offering Period in which the shares were purchased will
constitute ordinary income in the year of death.
The Company will be entitled to a deduction in the year of a
disqualifying disposition equal to the amount of ordinary income recognized by
the participant as a result of the disposition. In all other cases, no
deduction is allowed to the Company except as otherwise described above.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE
PROPOSAL TO APPROVE THE ADOPTION OF THE SPP.
6
<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 $100,000, the amount and nature of all compensation awarded
to, earned by or paid to such individual for the fiscal year indicated for
services rendered in all capacities.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------- ------------------------------------------------------
AWARDS PAYOUTS
---------------------------- --------------------
SECURITIES LONG-TERM ALL
RESTRICTED UNDERLYING INCENTIVE OTHER
NAME AND STOCK OPTIONS/SARS PLAN COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OTHER($) AWARDS(S)($) (#) PAYOUTS($) ($)
------------------ ---- --------- -------- -------- ------------ ---- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Harry Kaplowitz(1) 1996 $138,000 $ -- 20,000
President 1995 $132,000 $10,251 -- -- -- -- --
1994 $120,000 $69,600 -- -- 41,218 -- --
Dr. Robert J. Loane(2) 1996 $100,000 $ -- 6,000
Senior Vice President and 1995 $100,000 $ 2,238 -- -- -- -- --
Chief Scientist 1994 $ 96,000 $13,920 -- -- 7,000 -- --
Richard M. Tworek(3) 1996 $131,000 $ -- 20,000
Senior Vice President 1995 $22,277 -- -- -- -- -- --
<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 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 $8,352 was paid in March 1995 and related
to 1994 performance.
(3) - The employment of Richard M. Tworek commenced on October 11, 1995.
</FN>
</TABLE>
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STOCK OPTIONS
The following tables set forth certain information regarding the grant
and exercise of options to purchase the Company's Common Stock with respect to
the named executive officers during 1996.
<TABLE>
OPTION GRANTS IN 1996
Individual Grants
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED
OPTIONS TO EMPLOYEES EXERCISE EXPIRATION
NAME GRANTED (#) DURING YEAR PRICE($/SH) DATE
---- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Harry Kaplowitz 20,000(*) 8.1% $3.813 4/30/01
Dr. Robert J. Loane 6,000(*) 2.4% $3.813 4/30/01
Richard M. Tworek 20,000(*) 8.1% $3.813 4/30/01
<FN>
* Exercisable in three equal annual installments commencing May 01, 1996.
Balance exercisable in two equal annual installments commencing May 01,
1997.
</FN>
</TABLE>
<TABLE>
AGGREGATE OPTION EXERCISES IN 1996 AND
DECEMBER 31, 1996 OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12/31/96 ($) 12/31/96 ($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Harry Kaplowitz -- -- 93,251/19,295 $652,757/$135,065
Dr. Robert J. Loane 5,444 $27,220 21,436/4,000 $150,052/$28,000
Richard M. Tworek -- -- 6,667/13,333 $46,669/$93,331
</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 1996.
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 Executive Vice President of the Company for a period of two years,
and pursuant to which he receives annual compensation equal to a minimum base
salary of $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
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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 1996, 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
1996, no Executive Committee meeting fees were accrued or paid to Executive
Committee members. During 1996, 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 4,000 shares of Common Stock at an exercise price of $4.313 per
share. During 1997, non-employee directors will receive an annual fee
amounting to $10,000, payable quarterly in shares of the Company's Common
Stock. 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 1,011,000 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 4, 1997, options to
purchase a total of 422,127 shares of Common Stock under the 1995 Plan, at
prices ranging from $1.085 to $15.00 per share, were outstanding, including
the 12,000 shares referred to above which underlie options granted in 1996 to
members of the Compensation Committee. As of April 4, 1997, a total of 70,404
shares were available for options not yet granted.
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 33,332, and the aggregate number of
shares as to which warrants may be granted to any one individual during any
calendar year shall not exceed 3,332. 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 1996, no warrants were issued to directors of the Company. As of
December 31, 1996, warrants to purchase 15,556 shares were outstanding, none
of which are held by present directors.
OTHER INFORMATION
For the year ended December 31, 1996, the Company made business
management consulting fee payments totaling $120,000 to Bermuda Capital for
the services of Mr. Richard T. Bueschel, the Company's Chairman.
For the year ended December 31, 1996, the Company made payments totaling
$75,000 to Huguenot Associates, Inc. for the consulting services of its
President, Robert M. Leopold, a director of the Company. The Company is
currently making payments of $7,500 per month to Huguenot Associates, Inc. for
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consulting services. In January 1996, the Company issued 8,000 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.
On October 3, 1996, the Company extended a loan to Richard M. Tworek, a
director and executive officer of the Company, in the principal amount of
$70,000. The loan, proceeds of which were used by Mr. Tworek for personal
reasons, bears annual interest of prime plus 1% and is payable by him on or
before October 2, 1999. The principal amount of the loan outstanding as of
March 31, 1997, was $70,000.
REPORTS UNDER SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and directors, and persons who own more than
10% of the Company's outstanding Common Stock, to file reports of securities
ownership and changes in such ownership with the Securities and Exchange
Commission. A Statement of Changes of Beneficial Ownership of Securities on
Form 4 is required to be filed by the tenth day of the month following the
month during which a change in a reporting person's beneficial ownership of
securities occurred. An Annual Statement of Changes in Beneficial Ownership on
Form 5 is required to be filed by February 15th of each year to report certain
specified transactions, including transactions occurring during the prior year
that were not timely reported on a Form 4.
Based solely on its review of the reports filed under Section 16(a) of
the Exchange Act, the Company believes that all reports of securities
ownership and changes in such ownership required to be filed during 1996 were
timely filed except that (i) a purchase of shares during November 1996 by
Millard H. Pryor, Jr., a director of the Company, which should have been
reported on a Form 4 for that month, was reported on a Form 5 filed in
February 1997, and (ii) sales of shares during November and December 1996 by
Richard T. Bueschel, Chairman of the Board of the Company, which should have
been reported on Forms 4 for those months, were reported on a Form 5 filed in
February 1997.
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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 April 4, 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 164,421(1) 7.12%
Suite 198
48 Par-La-Ville Road
Hamilton HM 11 Bermuda
Harry Kaplowitz 151,235(2) 6.55%
Infodata Systems Inc.
12150 Monument Drive
Fairfax, VA 22033
Richard M. Tworek 197,087(3) 8.54%
Infodata Systems Inc.
12150 Monument Drive
Fairfax, VA 22033
University of Rochester 294,992 12.78%
Wilson Boulevard
Rochester, NY 14627
<FN>
(1) Includes 105,385 shares subject to presently exercisable stock options.
(2) Includes 99,917 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
(3) Includes 13,333 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
</FN>
</TABLE>
11
<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 April 4,
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 OF PERCENT
NAME OF INDIVIDUAL BENEFICIAL OWNERSHIP OF CLASS
------------------------------------------------------------------------------------------------
<S> <C> <C>
Richard T. Bueschel 164,421(1) 7.12%
Laurence C. Glazer 62,070(2) 2.69%
Harry Kaplowitz 151,235(3) 6.55%
Robert M. Leopold 112,446(4) 4.87%
Robert J. Loane 71,132(5) 3.08%
Isaac M. Pollak 104,372(6) 4.52%
Millard H. Pryor, Jr. 22,828(7) .99%
Richard M. Tworek 197,087(8) 8.54%
All directors and
executive officers as a group (8 persons) 85,591(9) 38.37%
<FN>
(1) Includes 105,385 shares subject to presently exercisable stock options.
(2) Includes 9,332 shares subject to presently exercisable stock options.
(3) Includes 99,917 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
(4) Includes 59,270 shares subject to presently exercisable stock options.
(5) Includes 23,436 shares subject to presently exercisable stock options.
(6) Includes 12,200 shares owned by LGP Ltd. Profit Sharing Trust for which
Mr. Pollak has sole voting and investment power. Includes 21,774 shares
subject to presently exercisable stock options.
(7) Includes 4,666 shares subject to presently exercisable stock options.
(8) Includes 13,333 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
(9) Includes 337,113 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
</FN>
</TABLE>
12
<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, 1996. 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, 1997.
SOLICITATION OF PROXIES
The Company will bear the cost of solicitation of proxies. In additiyn 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 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 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 Genesis Insurance Company effective June 3, 1996. This policy
covered each director and officer of the Company and required the payment of
annual premiums totaling $37,460. During 1996, no sums were paid under this or
any other indemnification insurance contract.
BY ORDER OF THE BOARD OF DIRECTORS
Harry Kaplowitz, President
Dated: Fairfax, Virginia
April 30, 1997
13
<PAGE>
EXHIBIT A
INFODATA SYSTEMS INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
PURPOSE. The Infodata Systems Inc. 1997 Employee Stock Purchase Plan (the
"Plan") is established to provide eligible employees of Infodata Systems Inc.,
a Virginia corporation, and its wholly-owned subsidiaries (the "Company"),
with an opportunity to acquire a proprietary interest in the Company by the
purchase of shares of common stock, par value $.03 per share (the "Common
Stock") of the Company.
The Company intends that the Plan shall qualify as an "employee stock
purchase plan" under section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"), including any amendments or replacements of such Code
section, and the Plan shall be so construed. Any term not expressly defined in
the Plan but defined for purposes of section 423 of the Code shall have the
same definition herein.
An employee participating in the Plan (a "Participant") may withdraw such
Participant's accumulated payroll deductions (if any) and terminate
participation in the Plan or any Offering (as defined below) therein at any
time during an Offering Period (as defined below). Accordingly, each
Participant is, in effect, granted an option pursuant to the Plan (a "Purchase
Right") which may or may not be exercised at the end of an Offering Period.
ADMINISTRATION. The Plan shall be administered by the Board of Directors
of the Company (the "Board") and/or by a duly appointed committee of
non-employee members of the Board having such powers as shall be specified by
the Board. Any subsequent references to the Board shall also mean the
committee if a committee has been appointed. All questions of interpretation
of the Plan or of any Purchase Right shall be determined by the Board and
shall be final and binding upon all persons having an interest in the Plan
and/or any Purchase Right. Subject to the provisions of the Plan, the Board
shall determine all of the relevant terms and conditions of Purchase Rights
granted pursuant to the Plan; provided, however, that all Participants granted
Purchase Rights pursuant to the Plan shall have the same rights and privileges
within the meaning of section 423(b)(5) of the Code. All expenses incurred in
connection with the administration of the Plan shall be paid by the Company.
SHARE RESERVE. The maximum number of shares which may be issued under the
Plan shall be 200,000 shares of the Company's authorized but unissued Common
Stock or Common Stock which is treasury stock (the "Shares"). In the event
that any Purchase Right for any reason expires or is canceled or terminated,
the Shares allocable to the unexercised portion of such Purchase Right may
again be subjected to a Purchase Right.
ELIGIBILITY. Any employee of the Company is eligible to participate in
the Plan except employees who own or hold options to purchase or who, as a
result of participation in the Plan, would own or hold options to purchase,
stock of the Company possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company within
the meaning of section 423(b)(3) of the Code. Notwithstanding anything herein
to the contrary, any individual performing services for the Company solely
through a leasing agency or employment agency shall not be deemed an
"employee" of the Company.
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<PAGE>
OFFERING DATES.
(a) OFFERING PERIODS. Except as otherwise provided below, the Plan
shall be implemented by offerings (individually, an "Offering") of three (3)
months duration (an "Offering Period"); commencing on January 1, April 1, July
1 and October 1 of each year (beginning with July 1, 1997) and ending on the
first March 31, June 30, September 30 and December 31, respectively, occurring
thereafter. Notwithstanding the foregoing, the Board may establish a different
term for one or more Offerings and/or different commencing and/or ending dates
for such Offerings. An employee who becomes eligible to participate in the
Plan after an Offering Period has commenced shall not be eligible to
participate in such Offering but may participate in any subsequent Offering
provided such employee is still eligible to participate in the Plan as of the
commencement of any such subsequent Offering. Eligible employees may not
participate in more than one Offering at a time. The first day of an Offering
Period shall be the "Offering Date" for such Offering Period and the last day
of an Offering Period shall be the "Purchase Date" for such Offering Period.
In the event the first day of an Offering Period is not a business day, the
Offering Date shall be the first subsequent business day. In the event the
last day of an Offering Period is not a business day, the Purchase Date shall
be the first preceding business day.
(b) GOVERNMENTAL APPROVAL; STOCKHOLDER APPROVAL. Notwithstanding any
other provision of the Plan to the contrary, any Purchase Right granted
pursuant to the Plan shall be subject to (i) obtaining all necessary
governmental approvals and/or qualifications of the sale and/or issuance of
the Purchase Rights and/or the Shares, and (ii) obtaining stockholder approval
of the Plan.
PARTICIPATION IN THE PLAN.
(a) INITIAL PARTICIPATION. An eligible employee shall become a
Participant on the first Offering Date after satisfying the eligibility
requirements and delivering to the Company's payroll office not later than the
close of business for such payroll office on the last business day before such
Offering Date (the "Subscription Date") a subscription agreement indicating
the employee's election to participate in the Plan and authorizing payroll
deductions. An eligible employee who does not deliver a subscription agreement
to the Company's payroll office on or before the Subscription Date shall not
participate in the Plan for that Offering Period or for any subsequent
Offering Period unless such employee subsequently enrolls in the Plan by
filing a subscription agreement with the Company by the Subscription Date for
such subsequent Offering Period. The Company may, from time to time, change
the Subscription Date as deemed advisable by the Company in its sole
discretion for proper administration of the Plan.
(b) CONTINUED PARTICIPATION. A Participant shall automatically
participate in the Offering Period commencing immediately after the Purchase
Date of each Offering Period in which the Participant participates until such
time as such Participant (i) ceases to be eligible as provided in paragraph 4,
(ii) withdraws from the Plan pursuant to paragraph 11(b) or (iii) terminates
employment as provided in paragraph 12. If a Participant automatically may
participate in a subsequent Offering Period pursuant to this paragraph 6(b),
then the Participant is not required to file any additional subscription
agreement for such subsequent Offering Period in order to continue
participation in the Plan. However, a Participant may file a subscription
agreement with respect to a subsequent Offering Period if the Participant
desires to change any of the Participant's elections contained in the
Participant's then effective subscription agreement.
A-2
<PAGE>
RIGHT TO PURCHASE SHARES. Subject to the terms and limitations set forth
below, during an Offering Period each Participant in such Offering Period
shall have a Purchase Right consisting of the right to purchase that number of
whole Shares determined in accordance with paragraphs 8 and 9 hereof.
8. PURCHASE PRICE. The purchase price at which Shares may be acquired in
a given Offering Period pursuant to the exercise of all or any portion of a
Purchase Right granted under the Plan (the "Offering Exercise Price") shall be
set by the Board; provided, however, that the Offering Exercise Price shall
not be less than eighty-five percent (85%) of the lesser of (a) the fair
market value of the Shares on the Offering Date of the Offering Period, or (b)
the fair market value of the Shares on the Purchase Date of the same Offering
Period. Unless otherwise provided by the Board prior to the commencement of an
Offering Period, the Offering Exercise Price for that Offering Period shall be
eighty-five percent (85%) of the lesser of (a) the fair market value of the
Shares on the Offering Date of such Offering Period or (b) the fair market
value of the Shares on the Purchase Date of such Offering Period. The fair
market value of the Shares on the applicable dates shall be the closing price
quoted on the National Association of Securities Dealers Automated Quotation
System (or the average of the closing bid and asked prices if the Shares are
so quoted instead and the quoted closing price is not readily available), or
as reported on such other stock exchange or market system if the Shares are
traded on such other exchange or system instead, or as determined by the Board
if the Shares are not so reported.
PAYMENT OF PURCHASE PRICE. Shares which are acquired pursuant to the
exercise of all or any portion of a Purchase Right may be paid for only by
means of payroll deductions from the Participant's Compensation accumulated
during the Offering Period. For purposes of the Plan, a Participant's
"Compensation" with respect to an Offering (a) shall include all salaries,
before deduction for any contributions to any plan maintained by the Company
and described in Section 401(k) or Section 125 of the Code, and (b) shall not
include commissions, advances paid against future commissions, overtime,
bonuses, annual awards, other incentive payments, shift premiums, long-term
disability, worker's compensation or any other payments not specifically
referenced in (a). Except as set forth below, the amount of Compensation to be
withheld from a Participant's Compensation during each pay period shall be
determined by the Participant's subscription agreement.
(a) ELECTION TO DECREASE WITHHOLDING. During an Offering Period, a
Participant may elect to decrease the amount withheld from his or her
Compensation by filing an amended subscription agreement with the Company on
or before the "Change Notice Date." The "Change Notice Date" shall initially
be the seventh (7th) day prior to the end of the first pay period for which
such election is to be effective; however, the Company may change such Change
Notice Date from time to time. A Participant may not elect to increase the
amount withheld from the Participant's Compensation during an Offering Period.
(b) LIMITATIONS ON PAYROLL WITHHOLDING. The amount of payroll
withholding with respect to the Plan for any Participant during any pay period
shall be in one percent (1%) increments not to exceed fifteen percent (15%) of
the Participant's Compensation for such pay period. Notwithstanding the
foregoing, the Board may change the limits on payroll withholding effective as
of a future Offering Date, as determined by the Board. Amounts withheld shall
be reduced by any amounts contributed by the Participant and applied to the
purchase of Company stock pursuant to any other employee stock purchase plan
qualifying under section 423 of the Code.
(c) PAYROLL WITHHOLDING. Payroll deductions shall commence on the
first payday following the Offering Date and shall continue to the end of
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<PAGE>
the Offering Period unless sooner altered or terminated as provided in the
Plan.
(d) PARTICIPANT ACCOUNTS. Individual accounts shall be maintained
for each Participant. All payroll deductions from a Participant's Compensation
shall be credited to such account and shall be deposited with the general
funds of the Company. All payroll deductions received or held by the Company
may be used by the Company for any corporate purpose.
(e) NO INTEREST PAID. Interest shall not be paid on sums withheld
from a Participant's Compensation.
(f) EXERCISE OF PURCHASE RIGHT. Subject to the limitations contained
in paragraph 10 of the Plan, on the Purchase Date of an Offering Period each
Participant who has not withdrawn from the Offering or whose participation in
the Offering has not terminated on or before such Purchase Date shall
automatically acquire pursuant to the exercise of the Participant's Purchase
Right the number of whole Shares arrived at by dividing the total amount of
the Participant's accumulated payroll deductions for the Purchase Period by
the Offering Exercise Price. No Shares shall be purchased on a Purchase Date
on behalf of a Participant whose participation in the Offering or the Plan has
terminated on or before such Purchase Date.
(g) RETURN OF CASH BALANCE. Any cash balance remaining in the
Participant's account shall be refunded to the Participant as soon as
practicable after the Purchase Date. In the event the cash to be returned to a
Participant pursuant to the preceding sentence is an amount less than the
amount necessary to purchase a whole Share, the Company may establish
procedures whereby such cash is maintained in the Participant's account and
applied toward the purchase of Shares in the subsequent Offering Period.
(h) TAX WITHHOLDING. At the time the Purchase Right is exercised, in
whole or in part, or at the time some or all of the Shares are disposed of,
the Participant shall make adequate provision for the foreign, federal and
state tax withholding obligations of the Company, if any, which arise upon
exercise of the Purchase Right and/or upon disposition of Shares,
respectively. The Company may, but shall not be obligated to (except as
required by federal or state law), withhold from the Participant's
Compensation the amount necessary to meet such withholding obligations.
(i) COMPANY ESTABLISHED PROCEDURES. The Company may, from time to
time, establish (i) a minimum required withholding amount for participation in
an Offering, (ii) limitations on the frequency and/or number of changes in the
amount withheld during an Offering, (iii) an exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, (iv) payroll
withholding in excess of or less than the amount designated by a Participant
in order to adjust for delays or mistakes in the Company's processing of
subscription agreements, and/or (v) such other limitations or procedures as
deemed advisable by the Company in the Company's sole discretion which are
consistent with the Plan and in accordance with the requirements of section
423 of the Code.
(j) EXPIRATION OF PURCHASE RIGHT. Any portion of a Participant's
Purchase Right remaining unexercised after the end of the Offering Period to
which such Purchase Right relates shall expire immediately upon the end of
such Offering Period.
LIMITATIONS ON PURCHASE OF SHARES: RIGHTS AS A STOCKHOLDER.
(a) FAIR MARKET VALUE LIMITATION. Notwithstanding any other
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<PAGE>
provision of the Plan, no Participant shall be entitled to purchase Shares
under the Plan (or any other employee stock purchase plan which is intended to
meet the requirements of section 423 of the Code sponsored by the Company) at
a rate which exceeds $25,000 in fair market value, which fair market value is
determined for Shares purchased during a given Offering Period as of the
Offering Date for such Offering Period (or such other limit as may be imposed
by the Code), for each calendar year in which Participant participates in the
Plan (or any other employee stock purchase plan described in this sentence).
(b) PRO RATA ALLOCATION. In the event the number of Shares which
might be purchased by all Participants in the Plan exceeds the number of
Shares available in the Plan, the Company shall make a pro rata allocation of
the remaining Shares in as uniform a manner as shall be practicable and as the
Company shall determine to be equitable.
(c) RIGHTS AS A STOCKHOLDER AND EMPLOYEE. A Participant shall have
no rights as a stockholder by virtue of the Participant's participation in the
Plan until the date of the issuance of a stock certificate(s) for the Shares
being purchased pursuant to the exercise of the Participant's Purchase Right.
No adjustment shall be made for cash dividends or distributions or other
rights for which the record date is prior to the date such stock
certificate(s) are issued. Nothing herein shall confer upon a Participant any
right to continue in the employ of the Company or interfere in any way with
any right of the Company to terminate the Participant's employment at any
time.
WITHDRAWAL.
(a) WITHDRAWAL FROM AN OFFERING. A Participant may withdraw from an
Offering by signing and delivering to the Company's payroll office, a written
notice of withdrawal on a form provided by the Company for such purpose. Such
withdrawal may be elected at any time prior to the end of an Offering Period.
Unless otherwise indicated, withdrawal from an Offering shall not result in a
withdrawal from the Plan or any subsequent Offerings. A Participant is
prohibited from again participating in the same Offering at any time after
withdrawing from such Offering. The Company may impose, from time to time, a
requirement that the notice of withdrawal be on file with the Company's
payroll office for a reasonable period prior to the effectiveness of the
Participant's withdrawal from an Offering.
(b) WITHDRAWAL FROM THE PLAN. A Participant may withdraw from the
Plan by signing a written notice of withdrawal on a form provided by the
Company for such purpose and delivering such notice to the Company's payroll
office. Withdrawals made after a Purchase Date for an Offering Period shall
not affect Shares acquired by the Participant on such Purchase Date. In the
event a Participant voluntarily elects to withdraw from the Plan, the
Participant may not resume participation in the Plan during the same Offering
Period, but may participate in any subsequent Offering under the Plan by again
satisfying the requirements of paragraphs 4 and 6(a) above. The Company may
impose, from time to time, a requirement that the notice of withdrawal be on
file with the Company s payroll office for a reasonable period prior to the
effectiveness of the Participant's withdrawal from the Plan.
(c) RETURN OF PAYROLL DEDUCTIONS. Upon withdrawal from an Offering
or the Plan, the Participant's accumulated payroll deductions which have not
been applied toward the purchase of Shares shall be returned as soon as
practicable after the withdrawal, without the payment of any interest, to the
Participant, and the Participant's interest in the Offering and/or the Plan,
as applicable, shall terminate. Such accumulated payroll deductions may not be
applied to any other Offering under the Plan following the Participant's
withdrawal.
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<PAGE>
(d) PARTICIPATION FOLLOWING WITHDRAWAL; RESALES OF SHARES BY SECTION
16 PERSONS. A Section 16 Person (as defined below) may not sell Shares
acquired by such Section 16 Person under the Plan until such Shares have been
held by such Section 16 Person for at least six (6) months. In addition, a
Section 16 Person who is deemed to "cease participation" in the Plan within
the meaning of either Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and amended from time to time or any
successor rule or regulation ("Rule 16b- 3"), as a consequence of his or her
withdrawal from an Offering pursuant to paragraph 11(a) above, withdrawal from
the Plan pursuant to paragraph 11(b) above, or reduction in withholding
pursuant to paragraph 9(a) above, shall not again participate in the Plan for
at least six (6) months after the date of such withdrawal. A "Section 16
Person" shall include an employee who is also an officer or director of the
Company subject to Section 16 of the Exchange Act.
(e) WAIVER OF WITHDRAWAL RIGHT. The Company may, from time to time,
establish a procedure pursuant to which a Participant may elect (an
"Irrevocable Election"), prior to the commencement of an Offering Period, to
have all payroll deductions accumulated in his or her Plan account as of one
or more subsequent Purchase Dates applied to purchase shares under the Plan,
and (i) to waive his or her right to withdraw from the Offering or the Plan,
and (ii) to waive his or her right to increase, decrease, or cease payroll
deductions from his or her Compensation for such Offering during the time such
election is in effect. Such election shall be made in writing on a form
provided by the Company for such purpose and must be delivered to the Company
not later than the close of business on a date prior to the first day of the
Offering Period for which such election is to first be effective, as
determined by the Company. (In order to comply with Rule 16b-3, a Section 16
Person (as defined in paragraph 11(d) above) who does not make such an
Irrevocable Election may be required to hold any Shares acquired on a Purchase
Date for at least six (6) months following such Purchase Date.)
TERMINATION OF EMPLOYMENT. Termination of a Participant's employment with
the Company for any reason, including retirement, disability or death, or the
failure of a Participant to remain an employee eligible to participate in the
Plan, shall terminate the Participant's participation in the Plan immediately.
In such event, the payroll deductions credited to the Participant's account
since the last Purchase Date shall, as soon as practicable, be returned to the
Participant or, in the case of the Participant's death, to the Participant's
legal representative, and all of the Participant's rights under the Plan shall
terminate. Interest shall not be paid on sums returned to a Participant
pursuant to this paragraph 12. A Participant whose participation has been so
terminated may again become eligible to participate in the Plan by again
satisfying the requirements of paragraphs 4 and 6(a) above.
TRANSFER OF CONTROL. A "Transfer of Control" shall be deemed to have
occurred in the event any of the following occurs with respect to the Company.
(a) any acquisition of the Company's stock or any reorganization as
defined in section 368(a)(1) of the Code to which the Company is a party as
defined in section 368(b) of the Code and in which the Company is not the
surviving corporation or is not immediately after the reorganization engaged
in the active conduct of a trade or business or in which the stockholders of
the Company will own less than fifty percent (50%) of the voting securities of
the surviving corporation; or
(b) any sale or conveyance of substantially all of the net assets of
the Company, unless immediately after such sale the Company is engaged in the
active conduct of a trade or business.
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<PAGE>
In the event of a Transfer of Control, the surviving, continuing,
successor, or purchasing corporation, as the case may be (the "Acquiring
Corporation"), shall either assume the Company's rights and obligations under
the Plan or substitute rights to purchase the Acquiring Corporation's stock
for outstanding Purchase Rights, unless the Company's Board otherwise agrees.
In the event that, with the Board's consent, the Acquiring Corporation elects
not to assume or substitute for such outstanding Purchase Rights in connection
with a merger in which the Company is not the surviving corporation or a
reverse triangular merger in which the Company is the surviving corporation
where the stockholders of the Company before such merger do not retain,
directly or indirectly, at least a majority of the beneficial interest in the
voting stock of the Company after such merger, the Board may, but shall not be
obligated to, provide that any outstanding Purchase Rights shall be exercised
as of the date of the Transfer of Control, as the Board so determines. The
exercise of any Purchase Right that was permissible solely by reason of this
paragraph 13 shall be conditioned upon the consummation of the Transfer of
Control. Any Purchase Rights which are neither assumed or substituted for by
the Acquiring Corporation nor exercised as of the date of the Transfer of
Control shall terminate effective as of the date of the Transfer of Control.
CAPITAL CHANGES. In the event of changes in the common stock of the
Company due to a stock split, reverse stock split, stock dividend,
recapitalization, combination, reclassification, or like change in the
Company's capitalization, or in the event of any merger (including a merger
effected for the purpose of changing the Company's domicile), sale or other
reorganization, appropriate adjustments shall be made by the Company in the
securities subject to purchase under a Purchase Right, the Plan's share
reserve, the number of shares subject to a Purchase Right, and in the purchase
price per share.
NON-TRANSFERABILITY. A Purchase Right may not be transferred in any
manner and shall be exercisable during the lifetime of the Participant only by
the Participant. The Company, in its absolute discretion, may impose such
restrictions on the transferability of the Shares purchasable upon the
exercise of a Purchase Right as it deems appropriate and any such restriction
shall be set forth in the respective subscription agreement and may be
referred to on the certificates evidencing such Shares.
REPORTS. Each Participant who exercised all or part of his or her
Purchase Right for an Offering Period shall receive, as soon as practicable
after the Purchase Date of such Offering Period, a report of such
Participant's account setting forth the total payroll deductions accumulated,
the number of Shares purchased, the fair market value of such Shares, the date
of purchase and the remaining cash balance to be refunded or retained in the
Participant's account pursuant to paragraph 9(g) above, if any.
PLAN TERM. This Plan shall continue until terminated by the Board or
until all of the Shares reserved for issuance under the Plan have been issued,
whichever shall first occur.
RESTRICTION ON ISSUANCE OF SHARES. The issuance of shares under the Plan
shall be subject to compliance with all applicable requirements of federal,
state or foreign law with respect to such securities. A Purchase Right may not
be exercised if the issuance of shares upon such exercise would constitute a
violation of any applicable federal, state or foreign securities laws or other
law or regulations. In addition, no Purchase Right may be exercised unless (i)
a registration statement under the Securities Act of 1933, as amended, shall
at the time of exercise of the Purchase Right be in effect with respect to the
shares issuable upon exercise of the Purchase Right,
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<PAGE>
or (ii) in the opinion of legal counsel to the Company, the shares issuable
upon exercise of the Purchase Right may be issued in accordance with the terms
of an applicable exemption from the registration requirements of said Act. As
a condition to the exercise of a Purchase Right, the Company may require the
Participant to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation, and
to make any representation or warranty with respect thereto as may be
requested by the Company.
LEGENDS. The Company may at any time place legends or other identifying
symbols referencing any applicable federal, state and/or foreign securities
restrictions or any provision convenient in the administration of the Plan on
some or all of the certificates representing shares of stock issued under the
Plan. The Participant shall, at the request of the Company, promptly present
to the Company any and all certificates representing shares acquired pursuant
to a Purchase Right in the possession of the Participant in order to carry out
the provisions of this paragraph.
NOTIFICATION OF SALE OF SHARES. The Company may require the Participant
to give the Company prompt notice of any disposition of Shares acquired by
exercise of a Purchase Right within two years from the date of granting such
Purchase Right or one year from the date of exercise of such Purchase Right.
The Company may direct that the certificates evidencing Shares acquired by
exercise of a Purchase Right refer to such requirement to give prompt notice
of disposition.
AMENDMENT OR TERMINATION OF THE PLAN. The Board may at any time amend or
terminate the Plan, except that such termination shall not affect Purchase
Rights previously granted under the Plan, nor may any amendment make any
change in a Purchase Right previous ly granted under the Plan which would
adversely affect the right of any Participant (except as may be necessary to
qualify the Plan as an employee stock purchase plan pursuant to section 423 of
the Code or to obtain qualification or registration of the Shares under
applicable federal, state or foreign securities laws). In addition, an
amendment to the Plan must be approved by the stockholders of the Company
within twelve (12) months of the adoption of such amendment if such amendment
would authorize the sale of more shares than are authorized for issuance under
the Plan.
A-8
<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 at the 1997 annual meeting of shareholders
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
said meeting to be held at The Penn Club of New York, 30 West 44th Street, New
York, New York 10036, on Wednesday, May 28, 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 PROPOSALS 1 AND 2 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>
Please mark
your vote
as this example
FOR WITHHOLD
1. Election [ ] [ ]
of Directors
Nominees: Richard T. Bueschel, Laurence C.Glazer
Harry Kaplowitz, Robert M. Leopold, Issac M. Pollak
and Millard H. Pryor, Jr.
FOR, except vote withheld from the following nominees:
___________________________________________________________
The Board of Directors recommends a vote FOR the nominees.
FOR AGAINST ABSTAIN
2. Approval of 1997 Employee [ ] [ ] [ ]
Stock Purchase Plan
Change of I plan to I do not plan
Address [ ] 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.
