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
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 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.
(1) Title of each class of securities to which transactions applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
INFODATA SYSTEMS INC.
Corporate Headquarters
12150 Monument Drive
Fairfax, Virginia 22033
--------------------------------
NOTICE OF THE 1999 ANNUAL MEETING OF SHAREHOLDERS
May 26, 1999
--------------------------------
The Annual Meeting of the Shareholders of Infodata Systems Inc. (the
"Company") will be held at the Company's Corporate Headquarters on Wednesday,
May 26, 1999, at 10:00 a.m. for the following purposes:
1. To elect nine directors to serve until their respective successors are
elected and qualified; and
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 March 15, 1999, 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
Curtis D. Carlson, Secretary
Dated: Fairfax, Virginia
April 15, 1999
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
Secretary of the Company before it is voted or it may be withdrawn at the
meeting and voted in person. If not revoked or withdrawn, the shares
represented by the Proxy will be voted in the manner directed therein. If a
choice is not specified, the Proxy will be voted FOR the election of the Board
of Directors' nominees.
A majority of the vote of shareholders present in person or by proxy is
required for the election of the nominees to the Board of Directors. On March
15, 1999, the record date for eligibility to vote, the Company had 4,526,747
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 of
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 nine meetings either in person or by telephone during the
year ended December 31, 1998. 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, Alan S. Fisher,
Harry Kaplowitz, Robert M. Leopold, Steven M. Samowich 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, 1998, either in-person or telephonic meetings of the Executive
Committee were held on the average of once 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;
and reviewing the scope of the audit and the results of the audit examination.
During 1998, the Audit Committee held two meetings.
The Finance Committee members, Messrs. Leopold, Fisher, Glazer, and
Pryor, are responsible for overseeing the Company's financing activities.
During 1998, the Finance Committee held five meetings either in person or by
telephone.
2
<PAGE>
The Nominating Committee held one meeting in 1998. 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 1998. 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, Fisher, Glazer and Pollak are the members of the
Compensation Committee.
During 1998, 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.
ELECTION OF DIRECTORS
Nine 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 nine nominees
of the Board of Directors listed below, unless the proxy instructs otherwise.
In the event that any of the nine 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 66 Director since 1992
Mr. Bueschel has been the Chairman of the Board of Directors and the
Chairman of the Executive Committee of the Company since January 1993 and was
acting Chief Executive Officer of the Company from April 1997 to November 1997
and again from July 1998 through October 1998. Since 1988, he has been the
Chief Executive Officer of Northern Equities, Inc., an investment and
management firm. Mr. Bueschel is Chairman of the Board of Communications
Management Systems, Inc. and a director of Study.Net Corporation, a provider
of internet-based software applications.
Alan S. Fisher Age 38 Director since 1997
Mr. Fisher has been a director of the Company since July 1997. In July
1994, he co-founded ONSALE, Inc., a company engaged in online retail. Mr.
Fisher has been the Vice President of Development & Operations, the Chief
Technology Officer, and director of ONSALE, Inc. since that time. Mr. Fisher
was a co-founder and, from 1988 to July 1997, President and Chairman of
Software Partners, Inc., a software development company and parent of Ambia
Corporation. Since August 1998 he has been a director of Fatbrain.com, an
online retailer.
Laurence C. Glazer Age 53 Director since 1993
Mr. Glazer has been a director of the Company since August 1993. In 1970,
Mr. Glazer founded Buckingham Properties, a real estate development firm
specializing in redevelopment and enhancement of urban property in Rochester,
New York. Since 1970, he has been a Partner of Buckingham Properties.
3
<PAGE>
Harry Kaplowitz Age 55 Director since 1980
Mr. Kaplowitz, a founder of the Company, has been Executive Vice
President of the Company since November 1997 and a director since 1980. From
1991 to 1993, Mr. Kaplowitz served as the Chairman of the Board of Directors
and from 1991 to November 1997 he served as President of the Company.
Robert M. Leopold Age 73 Director since 1992
Mr. Leopold has been a director of the Company since 1992. Since 1977,
Mr. Leopold has been President of Huguenot Associates, Inc., a financial and
business consulting firm. Currently, he is Chairman of the Board of
International Asset Management Group, Inc., a director of Standard Security
Life Insurance Company of New York, a wholly owned subsidiary of Independence
Holding Company, Inc., H.E.R.C. Products Incorporated, and Dental Services of
America, Inc. From 1988 to 1997, he was a director of Windsor Capital.
Isaac M. Pollak Age 48 Director since 1993
Mr. Pollak has been a director of the Company since 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 65 Director since 1992
Mr. Pryor has been a director of the Company since 1992. He has been
Managing Director of Pryor & Clark Company, an investment holding company,
since September 1970. He is a Director of CompuDyne Corporation, a
manufacturing and engineering firm; Wiremold Company, a manufacturer of wire
management products; Hoosier Magnetics, Inc., a producer of hard ferrite
magnetic powders; and The Hartford Funds, an investment company.
Steven M. Samowich Age 48 Director since 1998
Mr. Samowich has been the President, Chief Executive Officer, and a
director of the Company since November 1998. From January 1997 to October
1998, he served as Vice President and General Manager of the Time Data Systems
Division of Simplex Time Recorder Company. From December 1995 through 1996,
Mr. Samowich was the North American General Manager of Sales, Marketing &
Services for Visix Software and from 1984 to 1995 he was with Computervision
where he served as its National Sales Manager from 1993 to 1995.
Richard M. Tworek Age 42 Director since 1996
Mr. Tworek was elected Senior Vice President of the Company in October
1995. He has been Executive Vice President and a director since July 1996 and
Chief Technology Officer since April 1997. Mr. Tworek was the founder of
Merex, Inc. (a company primarily engaged in internet and client/server
document management technology that was acquired by Infodata in October 1995),
and served as its President from April 1987 to October 1995.
4
<PAGE>
EXECUTIVE COMPENSATION, TRANSACTIONS AND EMPLOYEE BENEFIT PLANS
The following Summary Compensation Table sets forth for the Company's
President and all other executive officers whose total annual salary and
bonuses exceeded $100,000, the amount and nature of all compensation awarded
to, earned by or paid to such individual for the fiscal year indicated for
services rendered in all capacities.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
Securities Long-Term
Restricted Underlying Incentive All Other
Name and Stock Options/SARs Plan Compensation
Principal Position Year Salary ($) Bonus($) Other ($) Awards(s)($) (#) Payouts($) ($)
- ------------------- ---- ---------- -------- -------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Steven M. Samowich(1) 1998 $ 28,000 $32,000 -- -- 220,000 -- --
President and Chief
Executive Officer
James A. Ungerleider(2) 1998 $116,000 $ -- -- -- 250,000 -- $164,000
President and Chief
Executive Officer 1997 $ 11,000 $50,000 -- -- 250,000 -- --
Harry Kaplowitz(3) 1998 $150,000 $24,000 -- -- -- -- --
Executive Vice 1997 $144,000 $27,500 -- -- 7,500 -- --
President 1996 $138,000 $ -- -- -- 20,000 -- --
Richard M. Tworek(4) 1998 $150,000 $55,000 -- -- -- -- --
Executive Vice
President and Chief 1997 $149,000 $55,000 -- -- 20,000 -- --
Technology Officer 1996 $131,000 -- -- -- 20,000 -- --
Dr. Robert J. Loane(5) 1998 $109,000 $ 8,400 -- -- 7,500 -- --
Senior Vice President 1997 $100,000 $ -- -- -- -- -- --
1996 $100,000 $ -- -- -- 6,000 -- --
Christopher P. Dettmar(6) 1998 $126,000 $ 6,500 -- -- 5,000 -- --
Chief Financial Officer 1997 $ 73,000 $ -- -- -- 15,000 -- --
Razi Mohiuddin(7) 1998 $120,000 $ -- -- -- -- -- --
Vice President 1997 $ 44,000 $11,000 -- -- -- -- --
5
<PAGE>
<FN>
(1) - The employment of Steven M. Samowich commenced on November 3, 1998.
The amount reported above for the 1998 bonus was paid in 1999.
(2) - The amount reported above for the 1997 bonus was paid in 1998. The
employment of James A. Ungerleider terminated on July 7, 1998.
(3) - The amount reported above for the 1998 bonus was paid in 1999. With
respect to the 1997 bonus amount reported above, $18,000 was paid in
1997 and the balance of $9,500 was paid in March 1998. Mr. Kaplowitz
served as the Company's president from 1991 to November 5, 1997.
(4) - The amount reported above for the 1998 bonus was paid in 1999. With
respect to the 1997 bonus amount reported above, $40,000 was paid in
1997 and the balance of $15,000 was paid in March 1998. The employment
of Richard M. Tworek commenced on October 11, 1995.
(5) - With respect to the 1998 bonus amount reported above, $2,500 was paid
in 1998 and the balance of $5,904 was paid in 1999.
(6) - The amount reported above for the 1998 bonus was paid in 1999. The
employment of Christopher P. Dettmar commenced on May 5, 1997.
(7) - The amount reported above for the 1997 bonus was paid in 1998. The
employment of Razi Mohiuddin commenced on July 22, 1997.
</FN>
</TABLE>
Stock Options
The following tables set forth certain information regarding the grant
and exercise of options to purchase the Company's Common Stock with respect to
the named executive officers during 1998.
OPTION GRANTS IN 1998
Individual Grants
<TABLE>
<CAPTION>
Number of
Securities % of Total
Underlying Options Granted
Name Options To Employees Exercise Expiration Date
---- Granted (#) During Year Price($/SH)
----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Steven M. Samowich 220,000(1) 17.84% $3.00 11/3/08
James A. Ungerleider 250,000(2) 20.28% $9.50 11/05/07
Harry Kaplowitz -- -- -- --
Dr. Robert J. Loane 7,500(3) 0.61% $3.53 8/12/08
Richard M. Tworek -- -- -- --
Christopher P. Dettmar 5,000(4) 0.41% $3.53 8/12/08
Razi Mohiuddin -- -- -- --
<FN>
(1) Exercisable as follows: 12.5% on May 3, 1999 and 6.25% every three
months thereafter. Option was repriced to $2.875 per share on February
25, 1999.
(2) Incentive stock option grant provided on March 4, 1998 replaced the
non-qualified grant provided to Mr. Ungerleider on November 5, 1997.
(3) Exercisable as follows: 12.5% on February 12, 1999 and 6.25% every three
months thereafter. Forty-five percent (45%) of this option was canceled
and the remainder was repriced to $2.875 per share on February 25, 1999.
(4) Option was canceled in its entirety on February 25, 1999.
</FN>
</TABLE>
6
<PAGE>
AGGREGATE OPTION EXERCISES IN 1998 AND
DECEMBER 31, 1998 OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
12/31/98(#) 12/31/98 ($)(1)
Name Shares Acquired Value Exercisable Exercisable
on Exercise (#) Realized Unexercisable Unexercisable
---- --------------- -------- ------------- ---------------
<S> <C> <C> <C> <C>
Steven M. Samowich -- -- 0/220,000 $0/$0
Harry Kaplowitz -- -- 110,214/7,500 $43,730/$0
Richard M. Tworek -- -- 20,000/20,000 $0/$0
Dr. Robert J. Loane -- -- 14,886/7,500 $2,241/$0
Christopher P. Dettmar -- -- 10,000/10,000 $0/$0
Razi Mohiuddin -- -- 0/0 $0/$0
<FN>
(1) Fiscal year ended December 31, 1998. The closing market price on that
date for the Company's Common Stock was $2.344.
</FN>
</TABLE>
Agreements With Executives
The Company entered into a letter employment agreement ("Letter
Agreement") with Steven M. Samowich on November 3, 1998. Pursuant to the
Letter Agreement, Mr. Samowich is serving as the Company's President and Chief
Executive Officer, and receives an annual base salary of $251,000 plus an
annual incentive bonus based on the achievement of certain management
objectives and financial performance measures. In addition, Mr. Samowich
received options to acquire 220,000 shares of the Company's Common Stock at a
price of $3.00 per share (repriced to $2.875 per share on February 25, 1999),
vesting over a four year period from the date of the Letter Agreement, a
$32,000 hiring bonus to be paid in January 1999, health insurance, life
insurance and $30,000 for relocation expenses. Mr. Samowich's employment with
the Company is terminable at will and is not for a definite term. However, if
Mr. Samowich is terminated by the Company, other than "for cause", as defined
in the Letter Agreement, he will continue to be paid his base salary in
monthly increments for a period of 12 months.
On November 4, 1998 the Company and Mr. Samowich entered into an
Agreement on Confidential Information, Inventions and Ideas (the
"Confidentiality Agreement"). The Confidentiality Agreement provides that Mr.
Samowich will not disclose any confidential information during and after his
employment and, if his employment is terminated by the Company with cause or
if he terminates his employment without cause, for a period of one year
following the termination of his employment with the Company, he will not
solicit clients, consultants or suppliers of the Company or otherwise compete
with the Company on the sale or licensing of any products or services that are
competitive with the products or services developed or marketed by the Company
in the United States. The Confidentiality Agreement also provides that Mr.
Samowich will not solicit any employee of the Company for a period of one year
following the date of termination of his employment.
As part of the acquisition by the Company of Merex, Inc. in October 1995,
the Company entered into an Employment and Non-compete Agreement ("Employment
Agreement"), dated October 11, 1995, with Richard M. Tworek. Pursuant to the
Employment Agreement, Mr. Tworek is serving as Executive Vice President of the
Company until October 11, 1999, and receives a minimum base salary of $125,000
per year, plus any bonus compensation as may be determined by the Company's
Board of Directors. The Employment Agreement also provides that Mr. Tworek may
terminate his employment upon 60 days' written notice. The Employment
Agreement also provides that, unless Mr. Tworek's employment is terminated by
7
<PAGE>
the Company without cause, for a period of two years following the expiration
or termination of the Employment Agreement or his earlier resignation, Mr.
Tworek may not (i) induce any then existing client, customer, or supplier of
the Company to curtail business with the Company, (ii) disturb any business
relationship between the Company and any third party, or (iii) make statements
to any third party likely to result in adverse publicity for the Company. The
Employment Agreement also provides that, unless Mr. Tworek's employment is
terminated by the Company without cause, he may not solicit any employee of
the Company, and for a period of one year following his termination may not
employ any person who is or was an employee of the Company or Merex.
As part of the acquisition of Ambia, on July 22, 1997, the Company and
Ambia entered into a two-year employment agreement with Razi Mohiuddin
("Mohiuddin Employment Agreement"). Pursuant to the Mohiuddin Employment
Agreement, Mr. Mohiuddin is serving as Vice President of the Company and
manager of the Company's West Coast facilities for a term of 24 months, unless
extended by the mutual agreement of the Company and Mr. Mohiuddin, with a base
salary of $110,000 per year, subject to adjustment based on performance
reviews. The Mohiuddin Employment Agreement provides that Mr. Mohiuddin may
terminate his employment with 60 days' written notice. The Mohiuddin
Employment Agreement also provides that Mr. Mohiuddin will be subject to a
non-competition provision for a period of two years and a non-solicitation
provision for a period of one year following the date of termination unless
Mr. Mohiuddin's employment is terminated by the Company without cause.
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 1998.
Director Compensation
During 1998, 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
4,666 shares of Common Stock at an exercise price of $4.625 per share. During
1998, non-employee directors received an annual fee amounting to $10,000,
payable quarterly in shares of the Company's Common Stock. Non-employee
directors also received $1,000 for each board meeting attended and $100 for
each committee meeting attended. The Company plans to compensate its
non-employee directors on the same basis in 1999. Any director who is an
employee of the Company receives no additional compensation for serving as a
director. During 1998, no Executive Committee meeting fees were accrued or
paid to Executive Committee members.
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 2,011,000 shares of Common Stock have been authorized for issuance
under options granted and to be granted under the 1995 Plan at exercise prices
that 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 March 15, 1999, options to
purchase a total of 1,108,302 shares of Common Stock under the 1995 Plan, at
prices ranging from $1.085 to $11.00 per share, were outstanding, including
the 13,998 shares referred to above, which underlie options granted in 1998 to
members of the Compensation Committee. As of March 15, 1999, a total of
593,194 shares were available for options not yet granted.
8
<PAGE>
Stock Option Repricing
On July 15, 1998, approximately 150,000 outstanding options with exercise
prices in excess of $3.50 per share, held by employees other than executives
and directors, were amended by the Compensation Committee to provide for an
option exercise price of $3.50 per share, being the fair market value of the
Company's Common Stock on that date. Options held by the officers and
directors of the Company were not eligible for repricing. All terms and
conditions of the existing options, including the vesting schedules, remained
unchanged.
On December 2, 1998, outstanding options with exercise prices in excess
of $2.875 per share, held by employees including Mr. Samowich, were amended by
the Compensation Committee to provide for an option exercise price of $2.875
per share, being the fair market value of the Company's Common Stock on that
date. All other terms of the existing options remained unchanged. Also in
December 1998, the Compensation Committee offered to amend options held by
Messrs. Carlson, Dettmar, Kaplowitz, Loane, and Tworek to provide for an
option exercise price of $2.875 per share in exchange for the cancellation of
25 percent of the shares underlying the adjusted options. Approximately
115,000 shares were exchanged pursuant to this offer for 86,000 shares with an
exercise price of $2.875.
The Compensation Committee authorized these actions because the decline
in the price of the Company's Common Stock made it appear unlikely that
outstanding options granted under the 1995 Plan would be significantly
in-the-money prior to their expiration, and, accordingly, the value of the
outstanding options as incentives to employee performance had been lost. In
approving each of the above actions, the Compensation Committee considered the
competitive environment for obtaining and retaining employees and the overall
benefit to the Company's stockholders of a highly motivated workforce, as well
as the importance to the Company of its employees and the importance to the
employees of stock options.
Other Information
For the year ended December 31, 1998, the Company made business
management consulting fee payments totaling $145,000 to Bermuda Capital for
the services of Mr. Richard T. Bueschel, the Company's Chairman.
For the year ended December 31, 1998, the Company made payments totaling
$92,500 to Huguenot Associates, Inc. for the consulting services of its
President, Robert M. Leopold, a director of the Company.
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 15, 1999, 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 perso 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.
9
<PAGE>
Based 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 1998 were timely
filed except that (i) a purchase and an acquisition of shares in December 1998
by Richard T. Bueschel, Chairman of the Board of the Company, which should
have been reported by January 10, 1999 were reported on January 25, 1999, (ii)
a stock option exercise in July 1998 by Richard T. Bueschel, Chairman of the
Board of the Company, which should have been reported by August 10, 1998 was
reported on August 19, 1998, (iii) acquisitions of shares related to
director's fees in June 1998 and October 1998 by Isaac M. Pollak, a director
of the Company, which should have been reported by July 10, 1998 and November
10, 1998, were reported on July 16, 1998 and November 11, 1998 respectively,
(iv) the acquisition of options in May 1998 by Millard H. Pryor, Jr., a
director of the Company, which should have been reported by June 10, 1998 was
reported on June 11, 1998, and (v) a purchase of shares in May 1998 by James
A. Ungerleider, a former officer and director of the Company, which should
have been reported by June 10, 1998 was reported on July 8, 1998.
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 March 15, 1999. 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 243,741(1) 5.18%
Northern Equities, Inc.
Balch Hill Road, Box 301
Hanover, NH 03755
Alan S. Fisher 428,981(2) 9.46%
ONSALE, Inc.
1350 Willow Road
Menlo Park, CA 94025
<FN>
(1) Includes 178,718 shares subject to presently exercisable stock options.
(2) Includes 25,287 shares subject to an Escrow Agreement, dated July 22,
1997, by and among Alan Fisher, Razi Mohiuddin, the Company and
SETTLEMENT CORP., as escrow agent, pursuant to which Mr. Fisher shall be
entitled to vote such shares. Includes 10,000 shares subject to
presently exercisable to stock options.
</FN>
</TABLE>
10
<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 March
15,1999 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 243,741(1) 5.18%
Curtis D. Carlson 4,374(2) 0.10%
Christopher P. Dettmar 16,031(3) 0.35%
Alan S. Fisher 428,981(4) 9.46%
Laurence C. Glazer 93,039(5) 2.05%
Harry Kaplowitz 149,637(6) 3.23%
Robert M. Leopold 136,901(7) 2.98%
Robert J. Loane 70,729(8) 1.56%
Razi Mohiuddin 172,121(9) 3.80%
Isaac M. Pollak 158,423(10) 3.48%
Millard H. Pryor, Jr. 53,797(11) 1.19%
Steven M. Samowich 27,500(12) 0.60%
Richard M. Tworek 203,750(13) 4.48%
All directors and
Executive officers as a group (13 1,759,024(14) 35.04%
persons)
<FN>
(1) Includes 178,718 shares subject to presently exercisable stock options.
(2) Includes 3,780 shares subject to presently exercisable stock options.
(3) Includes 10,000 shares subject to presently exercisable stock options.
(4) Includes 25,287 shares subject to an Escrow Agreement, dated July 22,
1997, by and among Alan S. Fisher, Razi Mohiuddin, the Company and
SETTLEMENT CORP., as escrow agent, pursuant to which Mr. Fisher shall be
entitled to vote such shares. Includes 10,000 shares subject to
presently exercisable stock options.
(5) Includes 9,332 shares subject to presently exercisable stock options.
(6) Includes 103,451 shares subject to presently exercisable stock options.
(7) Includes 69,270 shares subject to presently exercisable stock options.
(8) Includes 16,260 shares subject to presently exercisable stock options or
stock options exercisable within 60 days.
(9) Includes 14,713 shares subject to an Escrow Agreement, dated July 22,
1997, by and among Alan S. Fisher, Razi Mohiuddin, the Company and
SETTLEMENT CORP., as escrow agent, pursuant to which Mr. Mohiuddin shall
be entitled to vote such shares.
(10) Includes 12,200 shares owned by LGP Ltd. Profit Sharing Trust for which
Mr. Pollak has sole voting and investment power. Includes 31,106 shares
subject to presently exercisable stock options.
11
<PAGE>
(11) Includes 13,998 shares subject to presently exercisable stock options.
(12) Includes 27,500 shares subject to presently exercisable stock options.
(13) Includes 20,000 shares subject to presently exercisable stock options.
(14) Includes 493,415 shares subject to presently exercisable stock options
or stock options exercisable within 60 days.
</FN>
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP was engaged to perform an audit of the
Company's financial statements for the year ended December 31, 1998. A
representative of PricewaterhouseCoopers LLP is expected to be available
during the Company's Annual Meeting of Shareholders via telephone 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, 1999.
SOLICITATION OF PROXIES
The Company will bear the cost of solicitation of proxies. In addition to
solicitation by the use of mails, some officers, without extra compensation,
may solicit proxies personally and by telephone and telegraph. The Company may
request banks, brokers, nominees, custodians, and fiduciaries to forward
soliciting material to the beneficial owners of shares registered in their
names. The Company will reimburse such persons for their expense incurred in
such assistance.
SHAREHOLDERS' PROPOSALS
Proposals of shareholders intended to be presented at the 2000 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 1, 1999. A shareholder desiring to submit a proposal to be voted on
at next year's Annual Meeting, but not desiring to have such proposal included
in next year's Proxy Statement relating to that meeting, should submit such
proposal to the Company by February 15, 2000 (i.e., at least 45 days prior to
the expected mailing of the Proxy Statement). Failure to comply with that
advance notice requirement will permit management to use its discretionary
voting authority if and when the proposal is raised at the Annual Meeting
without having had a discussion of the proposal in the Proxy Statement.
12
<PAGE>
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 maintains directors and officers
liability insurance, $1,000,000 in the aggregate for the policy year, under an
agreement with Zurich Insurance Company effective June 3, 1998. This policy
covers each director and officer of the Company and requires the payment of
annual premiums totaling $30,200. During 1998, no sums were paid under this or
any other indemnification insurance contract.
By order of the Board of Directors
Curtis D. Carlson, Secretary
Dated: Fairfax, Virginia
April 15, 1999
13
<PAGE>
INFODATA SYSTEMS INC.
The undersigned hereby appoints STEVEN M. SAMOWICH and CURTIS D. CARLSON,
or either of them individually, with full power of substitution, to act as
proxy and to represent the undersigned at the 1999 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 Company's Corporate Headquarters,
12150 Monument Drive, Fairfax, Virginia, on Wednesday, May 26, 1999, 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 THE PROPOSAL 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 the reverse side)
<PAGE>
Please date, sign and mail your proxy
card back as soon as possible!
Annual Meeting of Shareholders
INFODATA SYSTEMS INC.
May 26, 1999
[X] Please mark your votes as in this example.
----------------------------------------------------------------------------
The Board of Directors Recommends a vote FOR the nominees
1. Election of Directors FOR [ ] WITHHOLD [ ]
Nominees: Richard T. Bueschel
Alan S. Fisher
Laurence C. Glazer
Harry Kaplowitz
Robert M. Leopold
Isaac M. Pollak
Steven M. Samowich
Millard H. Proyer, Jr.
Richard M. Tworek
----------------------------------------------------------------------------
Change of Address [ ]
I plan to attend the meeting [ ]
I do not plan to attend the 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.
