TELESCAN INC, DEF 14A, 2000-07-10

TELESCAN INC
DEF 14A, 2000-07-10
COMPUTER PROGRAMMING, DATA PROCESSING, ETC.

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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 ss. 240.14a-11(c) or ss. 240.14a-12

Telescan, 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 transaction applies:

2. Aggregate number of securities to which transaction applies:

3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

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>
TELESCAN, INC.
5959 CORPORATE DRIVE, SUITE 2000
HOUSTON, TEXAS 77036

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AUGUST 9, 2000

The annual meeting of stockholders of Telescan, Inc. (the "Company") will be
held August 9, 2000 at 10:00 a.m. (local time) at the offices of the Company,
5959 Corporate Drive, Suite 2000, Houston, Texas 77036, for the following
purposes:

1. To elect five directors of the Company to hold office until the next
annual meeting of stockholders;

2. To ratify the Board of Directors' appointment of Arthur Andersen LLP
as the Company's independent auditors for the year ending December 31,
2000;

3. To approve the proposed 2000 Stock Option Plan; and

4. To transact such other business as may properly come before the
meeting or any adjournments thereof.

Further information regarding the meeting and the above proposals is set forth
in the accompanying Proxy Statement. The Board of Directors has fixed the close
of business on June 20, 2000 as the record date for the meeting, and only
holders of Telescan common stock of record at such time will be entitled to vote
at the meeting or any adjournments thereof.

Whether or not you plan to attend the meeting, we urge you to sign and return
the enclosed proxy so that your shares will be represented at the meeting.

By Order of the Board of Directors,

David L. Brown
Chairman of the Board

July 10, 2000

<PAGE>
TELESCAN, INC.
5959 CORPORATE DRIVE, SUITE 2000
HOUSTON, TEXAS 77036
-----------

PROXY STATEMENT
2000 ANNUAL MEETING OF STOCKHOLDERS

-----------

This Proxy Statement is being furnished to stockholders in connection with the
solicitation of proxies by the Board of Directors of Telescan, Inc., a Delaware
corporation (the "Company"), for use at the 2000 Annual Meeting of Stockholders
of the Company to be held at 5959 Corporate Drive, Houston, Texas, 77036 at
10:00 A.M. (local time) on Wednesday, August 9, 2000, and at any adjournments
thereof, for the purpose of considering and voting upon the matters set forth in
the accompanying Notice of Annual Meeting of Stockholders. This Proxy Statement
and the accompanying form of Proxy are first being mailed to stockholders on or
about July 10, 2000.

The close of business on June 20, 2000 has been fixed as the record date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting and any adjournments thereof. As of the record date, there were
16,813,033 shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), issued and outstanding. The presence, in person or by proxy, of
a majority of the outstanding shares of Common Stock on the record date is
necessary to constitute a quorum at the Annual Meeting. Each share is entitled
to one vote on all issues requiring a stockholder vote at the Annual Meeting.
Stockholders may not cumulate their votes for the election of Directors.
Directors shall be elected by a plurality of the votes of the shares present or
represented by proxy and entitled to vote at the Annual Meeting. The affirmative
vote of a majority of the shares of Common Stock present or represented by proxy
and entitled to vote at the Annual Meeting is required for the approval of Items
2 and 3 set forth in the accompanying Notice. Shares represented by proxy that
reflect abstentions and broker non-votes will be treated as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions will be counted as votes "against" a proposal in tabulations
of the votes cast on Items 1, 2, and 3 whereas broker non-votes will not be
counted in tabulations of the votes cast on Items 1, 2, and 3 and will have no
effect on the outcome of the vote.

All shares represented by properly executed proxies, unless such proxies
previously have been revoked, will be voted at the Annual Meeting in accordance
with the directions on the proxies. If no direction is indicated, the shares
will be voted (i) FOR THE ELECTION OF THE NOMINEES NAMED HEREIN, (ii) FOR THE
RATIFICATION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS, and
(iii) FOR THE APPROVAL OF THE PROPOSED 2000 STOCK OPTION PLAN. The enclosed
Proxy, even though executed and returned, may be revoked at any time prior to
the voting of the proxy (i) by the execution and submission of a revised proxy,
(ii) by written notice to the Secretary of the Company or (iii) by voting in
person at the Annual Meeting.

<PAGE>
--------------------------------------------------------------------------------
(1) ELECTION OF DIRECTORS FOR THE ENSUING YEAR
--------------------------------------------------------------------------------

NOMINEES FOR DIRECTORS

By resolution adopted by the Board of Directors, the number of directors of the
Company to be elected at the Annual Meeting has been reduced from twelve to
five. In keeping with the Company's announced plans for global expansion and
mergers and acquisitions, the Board of Directors believes that five members will
give the Company the flexibility needed in any future merger or acquisition
negotiations while still enabling the Board of Directors to efficiently and
effectively carry out its responsibilities to the Company and its stockholders.

The persons named in the enclosed proxy have been selected by the Board of
Directors to serve as Proxies and will vote the shares represented by valid
proxies at the 2000 Annual Meeting of Stockholders and any adjournments thereof.
They have indicated that, unless otherwise specified in the proxy, they intend
to elect as Directors the nominees listed below. All of the nominees are
currently members of the Board of Directors. Each duly elected Director will
hold office until the next annual meeting of stockholders or until his successor
shall have been elected and qualified. Although the Board of Directors of the
Company does not contemplate that any of the nominees will be unable to serve,
if such a situation arises prior to the Annual Meeting, the persons named in the
enclosed proxy will vote for the election of such other person(s) as may be
nominated by the Board of Directors.

The Board of Directors unanimously recommends a vote FOR the election of each of
the nominees listed below.

LEE K. BARBA, age 50, was appointed to the position of Chief Executive Officer
on February 29, 2000. Prior to joining the Company, he implemented the European
expansion of Open Link by forming strategic partnerships with several Fortune
500 companies. Mr. Barba joined Open Link after 22 years on Wall Street, where,
most recently, he was responsible for managing global trading businesses for
Bankers Trust Company. While based in London he was responsible for managing its
European offices, as well as the Global Risk Management Advisory practice which
had offices in Asia and Latin America. Upon returning to New York, Mr. Barba was
the senior executive of the bank responsible for managing and consolidating the
firm's technology and operations functions for the global capital markets
businesses, which included more than 2,100 in staff operating throughout Asia,
Europe and North America. Earlier in his career, Mr. Barba served as a co-head
of the Fixed Income Division at PaineWebber and as a Vice President of Lehman
Brothers Kuhn Loeb. He earned his M.B.A. from Columbia University and his B.A.
from the University of North Carolina.

DAVID L. BROWN, age 60, Chairman of the Board since 1990, has served as a
Director of the Company since 1989. Mr. Brown is co-author of CYBER-INVESTING:
CRACKING WALL STREET WITH YOUR PERSONAL COMPUTER, a best seller on computerized
investing, WALL STREET CITY, a guide to investing on the Internet, and GETTING
STARTED IN ONLINE INVESTING, the latest release in the Getting Started series,
all published by John Wiley and Sons, Inc. From 1978 to 1986, Mr. Brown was
President, and from 1992 to 1993 a Director, of Time Energy Systems, Inc., a
public company now known as the ACR Group, Inc. He has served as Chairman of the
U.S. Science and Technology Commission for the Emerging Leaders Summit
Conference series with the USSR. For the past ten years, he has served as a
Director of the Alliance for Aging Research, based in Washington, D.C. He has
also served as Chairman of the New Millennium Committee of the Planetary
Society, a group based in Pasadena, California, which supports space
exploration. He has served as Chairman of the Advisory Board of the Southwest
Council of Public CEOs and on the boards of several banks and financial
institutions. Mr. Brown began his career in the space program at NASA, where he
headed the team of engineers that designed the landing gear for the first lunar
module. Mr. Brown holds a B.S. degree in mechanical engineering from the
University of Pittsburgh and an M.B.A. from the University of Houston.

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<PAGE>
ELISABETH Y. SAMI, age 32, is Vice President of Strategic Partnership and
Business Development in NBC's Digital Media group. Ms. Sami was appointed to the
Board on June 23, 2000 to fill the position created after Christopher Glowacki's
resignation. Ms. Sami has been with NBC since March 1997, originally as Vice
President for International Business Development and Operations in New York, and
later as Vice President of Business Development for NBC West Coast in Burbank,
California. Before joining NBC, Ms. Sami served as Vice President of
International Business Development for Discovery Communications from March 1993
to February 1997. She started her career in international investment consulting.
Ms. Sami earned her B.A. from the University of Iowa, and received a Graduate
Diplome from the University of Stockholm.

WILLIAM D. SAVOY, age 35, currently serves as Vice President of Vulcan Ventures
Incorporated, a venture capital fund wholly owned by Paul G. Allen, co-founder
of Microsoft Corporation. From 1987 until November 1990, Mr. Savoy was employed
by Layered, Inc., a company controlled by Mr. Allen, and became its President in
1988. From November 1990 until the present, Mr. Savoy has served as President of
Vulcan Northwest Inc., a company that manages the personal financial activities
of Mr. Allen. Mr. Savoy serves on the Advisory Board of Dream Works SKG of Los
Angeles, California and serves on the Board of Directors of CNET, Inc. of San
Francisco, California; Harbinger Corporation of Atlanta, Georgia; Metricom, Inc.
of Los Gatos, California; Ticketmaster Online-CitySearch, Inc. of Pasadena,
California; USA Networks, Inc. of St. Petersburg, Florida; and U.S. Satellite
Broadcasting of Minneapolis, Minnesota. Mr. Savoy also represents Mr. Allen in a
wide variety of other personal financial transactions. Mr. Savoy holds a B.S. in
computer science, accounting and finance from Atlantic Union College. Mr. Savoy
has been a Director since 1993.

STEPHEN C. WOOD, age 48, is currently President and Chief Executive Officer of
Wireless Services Corporation based in Bellevue, Washington. Until March 1996,
Mr. Wood was President and Chief Executive Officer of Notable Technologies,
Inc., which filed for bankruptcy in 1996. From 1993 through 1994, Mr. Wood
served as Vice President of Information Broadcasting for McCaw Development
Corporation located in Kirkland, Washington. Until February 1993, he was
President of Starwave Corporation, a company he formed in 1991 with Microsoft
Corporation co-founder Paul G. Allen to develop and market data and information
products. From 1986 through 1991, Mr. Wood served in several executive positions
at Asymetrix Corporation, a software development and marketing firm founded by
Mr. Allen. From 1980 until 1985, Mr. Wood was in charge of building a
microcomputer software development organization for Datapoint Corporation in
Austin, Texas, after serving in research and development and marketing
positions. Mr. Wood began his career in 1976 when he became the sixth employee
of Microsoft Corporation, where he was general manager from 1977 to 1980. Mr.
Wood holds a B.S. in computer engineering from Case Western Reserve University
and an M.S. in electrical engineering from Stanford University. Mr. Wood has
been a Director since 1992.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Company has an Audit Committee and a Compensation Committee of the Board of
Directors. The Audit Committee and the Compensation Committee each currently
consist of all outside directors: Mr. Wood (Chairman), Dr. Ronald W. Hart, Mr.
Burt H. Keenan, Mr. Roy T. Rimmer, Jr., Ms. Sami and Mr. Savoy. The Company does
not presently have a standing nominating committee of the Board of Directors.

In June 2000, the Board of Directors approved and adopted of the Charter of the
Audit Committee of the Board of Directors giving the Audit Committee
responsibility for overseeing the Company's financial reporting process and
recommending for approval by the Board of Directors an independent firm of
certified public accountants. The Audit Committee monitors actual performance as
compared to budgeted goals and reviews accounting pronouncements that could
significantly impact the financial position of the Company. The Audit Committee
has the opportunity to meet with independent auditors to discuss audited results
and audit management letter recommendations. There was one Audit Committee
meeting during fiscal year 1999.

The Compensation Committee is responsible for recommending to the Board of
Directors the cash and non-cash remuneration for corporate officers and
directors. The Compensation Committee further recommends and approves grants
from the Company's stock option plans to officers, directors and employees.
There was one Compensation Committee meeting during fiscal year 1999.

3
<PAGE>
The Company held seven meetings of its Board of Directors during the fiscal year
ended December 31, 1999. Mr. Savoy attended 55% of the Board and committee
meetings in the fiscal year ended 1999 and Mr. Keenan attended 67% of such
meetings. Except as set forth in the previous sentence, no director attended
fewer than 75% of the aggregate of the meetings of the Board of Directors and
the meetings of any committee of the Board of Directors on which he served.

COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

As of June 15, 2000, the following persons were the executive officers of the
Company:

Name Position
---------------------------------- -------------------------------------
Lee K. Barba Chief Executive Officer
Ronald Warren President
David M. Berray Senior Vice President
Roger C. Wadsworth Senior Vice President
Paul A. Helbling Chief Financial Officer
Dennis L. Santiago Acting Chief Technology Officer
Joseph F. Frantz II Vice President, Chief
Information Officer
Greg E. Gensemer Vice President
Danny E. Hoover Vice President
William T. Melton Vice President
Jerrold B. Smith Vice President
Alexander T. Wyche Vice President, Corporate Counsel,
Corporate Secretary

Information concerning the business experience of Mr. Barba is provided under
the section entitled "Nominees for Directors."

RONALD WARREN, age 53, was appointed to the position of President in 1999 after
having served as Chief Financial Officer since 1996. From 1986 to 1996, Mr.
Warren served as Vice President and Chief Financial Officer of CogniSeis
Development, Inc., a multinational company that developed and sold computer
software, hardware and systems to a worldwide customer base. From 1975 to 1985,
Mr. Warren held various financial management positions at Sonat Offshore
Drilling, Inc., a large international drilling contractor, including Treasurer
and Controller. Mr. Warren holds M.B.A. and B.A. degrees from Hofstra University
and is a Certified Public Accountant.

DAVID M. BERRAY, age 38, was appointed Senior Vice President on March 14, 2000
to head up the Company's aggressive global expansion efforts. Prior to joining
the Company, Mr. Berray conducted research in technology strategy and
Internet-based business at the Massachusetts Institute of Technology ("MIT").
Mr. Berray spent ten years with Bankers Trust Company ("BT") most recently
headquartered in Hong Kong as business manager and chief operating officer of
BT's Investment Banking, Trading and Sales business lines throughout Asia. Mr.
Berray received a Master of Science degree in the Management of Technology from
MIT in June 2000 and, holds an M.B.A. from New York University and a B.A. in
Economics from Yale University.

4
<PAGE>
ROGER C. WADSWORTH, age 52, Senior Vice President since 1990, has served as a
Director since 1989. From 1988 to 1990, Mr. Wadsworth served as President of the
Company. From 1983 to 1988, Mr. Wadsworth was employed as Vice President of
Information Management Services, Inc., in Houston, Texas, where he provided
management services to investment vehicles such as limited partnerships and
joint ventures. From 1979 to 1983, he served as co-owner of D. Russell Smith
Associates, a restaurant and tenant finish general contractor. Mr. Wadsworth is
Corporate Secretary of IMS Securities, Inc., a full service NASD broker/dealer
owned by his wife. Mr. Wadsworth holds a B.B.A. degree from the University of
Houston.

PAUL A. HELBLING, age 47, joined the Company as Chief Financial Officer in
August 1999. From 1997 until joining Telescan, Mr. Helbling was Vice President
Finance at PCC Flow Technologies, Inc., a subsidiary of Precision Castparts
Corporation, a $350 million manufacturer of pumps and valves in the U.S. and
Europe. From 1991 to 1997 Mr. Helbling served as Vice President and Chief
Financial Officer of HydroChem Industrial Services, a $150 million provider of
industrial cleaning services to the petrochemical, refining, and utility
industries. Mr. Helbling became a Certified Public Accountant in 1978 and has
experience in Big 5 public accounting, and in the contract drilling and oil and
gas exploration and production industries. Mr. Helbling holds B.A. and M.A.
degrees from Rice University.

DENNIS L. SANTIAGO, age 42, was appointed Acting Chief Technology Officer on May
4, 2000. Previously, as Vice President of Corporate Development at Data
Broadcasting Corp. ("DBC"), Mr. Santiago was a leader in the development and
launch of CBS MarketWatch.com, a joint venture between DBC and CBS, Inc. Mr.
Santiago also served as Chief Strategy Officer for Zacks Investment Research,
where he was responsible for developing and defining products and service
strategies for the company's expansion. Additionally, he had responsibility for
Zack's Internet Development Department where he implemented the company's
Internet and broadband related business initiatives. Mr. Santiago holds a B.S.
degree in Electrical Engineering from the University of California, and an
M.B.A. from the University of California - Los Angeles, Anderson Graduate School
of Business.

JOSEPH F. FRANTZ II, age 36, has been a Vice President of the Company since May
1995, and was appointed to the position of Chief Information Officer in February
1999. Mr. Frantz previously held the positions of Computer Operations Manger,
End-User Software Product Manager and Senior Programmer after joining the
Company in 1987 as a Technical Support Representative. Mr. Frantz holds a B.S.
in Applied Mathematics from the University of Houston and an M.S. in management
computing and systems from Houston Baptist University. Mr. Frantz is co-inventor
of the technology for which the Company has been awarded two patents.

GREG E. GENSEMER, age 33, has been a Vice President since rejoining the Company
in April 1999. Prior to rejoining the Company, Mr. Gensemer was General Manager
for Paragon Software, a provider of streaming real-time quotes to individual
investors, money managers and brokers. When previously employed by the Company,
Mr. Gensemer held the positions of Director of Business Development, Project
Manager, Product Manager, Retail Sales Executive and Technical Support
Representative after originally joining the Company in 1990. Prior to joining
the Company, Mr. Gensemer was the Area Manager for Pilgrim Cleaners of Houston,
Texas from 1986 to 1990.

DANNY E. HOOVER, age 53, has been a Vice President since September 1996. Mr.
Hoover previously held the positions of Manager of Development, Manager of
Windows Development and Senior Windows Programmer. Before joining the Company in
1992, Mr. Hoover was employed as operations manager for Praxis Incorporated, a
supervisory control automation company in Houston, Texas. Mr. Hoover holds a
B.S. in Electrical Engineering from Texas A&M University.

WILLIAM T. MELTON, age 63, has been a Vice President since January 1995, and
previously held the position of Manager of Project Development. Before joining
the Company in October 1993, Mr. Melton served as a Project Manager with IBM,
having previously served in other sales positions as a 30-year employee of that
company. Mr. Melton holds both a B.S. in Business Administration and an M.B.A.
from the University of Arkansas.

JERROLD B. SMITH, age 47, has been a Vice President since March 1998, and
previously held the positions of Business Development Manager for the Company's
Internet site, Wall Street City, and Technical Support Supervisor after joining
the Company in 1995. Prior to joining the Company, Mr. Smith practiced financial
planning and asset management in Houston, Texas. From 1986 to 1988, Mr. Smith
was national Sales Manager for USOne Apparel of New York. From 1976 to 1986, Mr.
Smith was a salesman and ultimately regional Vice President of Donmoor, Inc.,

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<PAGE>
a wholesale apparel manufacturer, also of New York. Mr. Smith holds a B.S. in
Business Administration from the University of Houston.

ALEXANDER T. WYCHE, age 52, has been Vice President and Corporate Counsel since
he joined the Company in May 1999. In February 2000, he was appointed to the
additional position of Corporate Secretary. Mr. Wyche previously served as an
attorney for Koch Industries, Inc., a privately held international conglomerate
with interests in the natural gas industry, from 1997 to 1999. Prior to 1997,
Mr. Wyche held positions in the legal departments of Enron Corp. and Tenneco,
Inc., and served as a legal consultant to the natural gas industry. Mr. Wyche
holds a B.B.A. from Campbell University, a J.D. from North Carolina Central
University and is licensed to practice law in the states of Texas and North
Carolina.

SUMMARY COMPENSATION TABLE

The following table reflects all forms of compensation for services to the
Company for the years ended December 31, 1999, 1998, and 1997, of the Chief
Executive Officer and the Company's other most highly compensated executive
officers who were serving the Company at the end of 1999 and who earned $100,000
or more that year (the "named executive officers"). No other executive officers
of the Company received salary and bonus exceeding $100,000 during 1999.

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------- -----------------
SECURITIES
NAME YEAR SALARY BONUS UNDERLYING OPTIONS
---------------- ---- -------- -------- ------------------
<S> <C> <C> <C> <C>
David L. Brown . 1999 $158,750 -- 4,393
CHIEF EXECUTIVE 1998 $140,000 -- 28,800
OFFICER 1997 $138,425 -- 31,443

Dr. Richard K Carlin 1999 $116,925 -- 3,195
CHIEF TECHNOLOGY 1998 $107,700 -- 17,400
OFFICER 1997 $101,598 $ 2,911 15,941

Ronald Warren .. 1999 $118,269 -- 13,195
PRESIDENT ...... 1998 $100,000 -- 14,000
1997 $ 95,333 -- 9,416
</TABLE>

DIRECTOR COMPENSATION

The Company currently pays non-employee directors cash fees of $1,500 per Board
meeting attended and reimburses expenses incurred by directors to attend such
meetings. Directors who are not officers of the Company are typically granted
stock options annually, at an exercise price consistent with the fair market
value thereof.

STOCK OPTIONS

The following tables set forth information relating to the named executive
officers with respect to (i) stock options granted in 1999 and (ii) the total
number of exercised options through 1999 and the value of the unexercised
in-the-money options at the end of 1999.

6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENT OF POTENTIAL REALIZABLE
NUMBER OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS ANNUAL RATE OF STOCK
UNDERLYING GRANTED TO EXERCISE PRICE APPRECIATION FOR
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION OPTION TERM
NAME GRANTED FISCAL YEAR SHARE DATE 5% 10%
--------------------- --------- ----------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
David L. Brown ...... 4,393(2) 2.7% $ 14.13 10/21/2009 $ 39,037 $ 98,929

Dr. Richard K. Carlin 3,195(2) 2.0% $ 14.13 10/21/2009 $ 28,392 $ 71,950

Ronald Warren ....... 10,000(1) 6.2% $ 18.00 02/01/2009 $113,201 $286,874
3,195(2) 2.0% $ 14.13 10/21/2009 $ 28,392 $ 71,950
</TABLE>

(1) Options vest 25% annually beginning 12 months after the date of grant.
(2) Options vest immediately upon grant.

--------------------------------------------------------------------------------

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT FISCAL
FISCAL YEAR END YEAR END
SHARES --------------- -----------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
------------------ ----------- -------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
David L. Brown ... -- -- 77,266/31,100 $546,156/$357,527

Dr. Richard K. Carlin 20,000 $374,765 45,388/18,988 $333,371/$218,875

Ronald Warren .... -- -- 22,111/26,500 $241,914/$192,830
</TABLE>
--------------------------------------------------------------------------------

REPORT FROM THE COMPENSATION COMMITTEE REGARDING EXECUTIVE COMPENSATION

During 1999, the Compensation Committee of the Board of Directors consisted of
Christopher A. Glowacki, Dr. Hart, Mr. Keenan, Russell I. Pillar, Mr. Rimmer,
Mr. Savoy and Mr. Wood as Chairman. Messrs. Glowacki and Pillar have since
resigned from the Board.

The goal of the Compensation Committee is to develop compensation policies to
attract and retain highly qualified officers, directors and middle managers
whose skills are critical to the long-term success of the Company. Such policies
are intended to reward and motivate individual and team performance with the
common goal of maximizing total stockholder return.

Components of executive compensation include base salary, incentive bonus and
stock options. Salary levels for executive officer positions reflect the duties
and levels of responsibilities inherent in the position. Salaries of

7
<PAGE>
executive officers are reviewed annually and the primary criteria influencing
salary adjustments are the individual's performance, experience, contribution to
the Company and the competitive marketplace for executive talent.

In 1996, the Company implemented a cash bonus plan ("Officer Bonus Plan") based
on a combination of revenue and profit performance relative to budgeted goals.
Cash bonuses in the aggregate amount of $11,840 were paid in 1999.

Stock options are used by the Company as a long-term incentive and allow
executives the opportunity to acquire and build an ownership interest in the
Company. In 1999 executive officers were awarded stock options. The award level
was based upon the executive's performance and the executive's election to
receive bonus compensation in stock options in lieu of cash. The executive
officers' options vest on the date of the grant, have an option price equal to
the market price on the date of the grant, and are exercisable for ten years
from the date of grant.

As one of the factors in determining executive compensation, the Compensation
Committee considers the anticipated tax treatment to the Company and to the
executive officers of various types of compensation and benefits. From time to
time, interpretations of and changes in the tax laws affect the deductibility of
compensation. The Compensation Committee currently does not anticipate that
compensation paid to the executive officers in 1999 will exceed the amounts
specified as deductible pursuant to Section 162(m) of the Internal Revenue Code.

The compensation for the Chief Executive Officer is generally determined using
the same evaluation criteria used for other officers and managers of the
Company. The Chief Executive Officer received a base salary in fiscal 1998 of
$140,000. The Committee increased the Chief Executive Officer's base salary in
fiscal 1999 to $158,750. In addition, the Committee approved the grant of stock
options to acquire 4,393 shares to the Chief Executive Officer to provide him an
additional equity interest in the Company. The Chief Executive Officer has fully
met Board of Directors and Compensation Committee expectations with respect to
the growth and development of the Company.

By the Compensation Committee:

Stephen C. Wood, Chairman Burt H. Keenan
William D. Savoy Dr. Ronald W. Hart
Roy T. Rimmer, Jr.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1999, the Compensation Committee of the Board of Directors consisted of
Christopher A. Glowacki, Dr. Hart, Mr. Keenan, Russell I. Pillar, Mr. Rimmer,
Mr. Savoy and Mr. Wood as Chairman. Mssrs. Glowacki and Pillar have since
resigned from the Board.

No member of the Compensation Committee of the Board of Directors of the Company
was, during fiscal 1999, an officer or employee of the Company or any of its
subsidiaries, or was formerly an officer of the Company or any of its
subsidiaries or had any relationship requiring disclosure by the Company. During
1999, no executive officer of the Company served as (i) a member of the
Compensation Committee (or other board committee performing equivalent
functions) of another entity, one of whose executive officers served on the
Compensation Committee of the Board of Directors, (ii) a director of another
entity, one of whose executive officers served on the Compensation Committee of
the Board of Directors, or (iii) a member of the compensation committee (or
other board committee performing equivalent functions) of another entity, one of
whose executive officers served as a director of the Company.

EMPLOYMENT AGREEMENTS

In February 2000, the Company entered into an employment agreement with Mr.
Barba to serve as Chief Executive Officer. The term of the agreement is for
three years with an automatic one-year extension on the anniversary date. Mr.
Barba is to receive an annual base salary of $295,000 and received an option to
purchase 400,000 shares of Company Common Stock. This option vests over a period
ranging from six months to five years, which may be shortened to four years if
certain stock price goals are met. The option expires in ten years. Mr. Barba is
eligible to participate in the Officer Bonus Plan, the Company benefit plans,
and will be reimbursed for routine business and entertainment expenses and club
membership costs.

8
<PAGE>
In March 2000, the Company entered into an employment agreement with Mr. Berray
to serve as Senior Vice President. The term of the agreement is for one year
with an automatic one-year extension on the anniversary date. Mr. Berray
received an annual base salary of $112,500 through May 15, 2000 and will receive
an annual base salary of $225,000 for the remainder of the term of his
agreement. Mr. Berray received an option to purchase 125,000 shares of Company
Common Stock. This option vests over a period ranging from six months to five
years, which may be shortened to four years if certain stock price goals are
met. In addition, 25,000 of the 125,000 shares will vest on December 31, 2000 if
certain additional goals are met, as determined by the Chief Executive Officer.
The option expires in ten years. Mr. Berray is eligible to participate in the
Officer Bonus Plan, the Company benefit plans, and will be reimbursed for
routine business and entertainment expenses and relocation expenses.

In May 2000, the Company entered into an employment agreement with Mr. Santiago
to serve as Chief Technology Officer. The term of the agreement is for two years
with an automatic one-year extension on the anniversary date. Mr. Santiago is to
receive an annual base salary of $180,000 and received an option to purchase
60,000 shares of Company Common Stock. This option vests over a period ranging
from six months to five years, which may be shortened to four years if certain
stock price goals are met. The option expires in ten years. Mr. Santiago is
eligible to participate in the Officer Bonus Plan, the Company benefit plans,
and will be reimbursed for routine business and entertainment expenses.

All of the above agreements include covenants not to compete for 24 months after
termination from the Company. In the event of termination due to death or
disability, the executive, or his estate, will receive his salary and pro rata
bonus for six months after his death or disability and all options will vest
immediately and expire within one year. In the event of termination within 24
months of a change of control, as set forth in the agreements, the executive
will receive an amount equal to two times his current annual salary plus
projected bonuses, as set forth in the agreements; all options will vest
immediately and expire within one year of the change of control; and the
executive will receive an additional bonus for any additional taxes the package
would trigger. Any other termination, other than termination with cause, would
result in the executive receiving salary and bonuses, as set forth in the
agreements for one year, paid over a two year period and being eligible to
continue to participate in the Company benefit plan, if permitted, or being
compensated for the fair value of benefits from plans in which the executive
would not be able to participate.

Mr. Brown, who served as Chief Executive Officer through February 2000, has an
employment agreement under which he continues to serve as Chairman of the Board,
which renews automatically each year on March 10. Upon termination of the
agreement, Mr. Brown will be entitled to a continuation of his compensation and
related benefits for the remainder of the term or six months, whichever is
longer.

Mr. Foshay voluntarily terminated his employment agreement January 15, 2000.

9
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN

The following graph compares the Company's total stockholder return over the
last five years to the Standard & Poor's Computer Software and Service Index and
the Nasdaq Stock Market Index. Cumulative total return values are based on
annual total return values which assume reinvestment of dividends. The
stockholder return shown on the graph below is not necessarily indicative of
future performance.

[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]

<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
----- ----- ----- ----- ----- -----

<S> <C> <C> <C> <C> <C> <C>
TELESCAN, INC. COMMON STOCK .... 100 186 126 163 208 564
NASDAQ STOCK MARKET INDEX (U.S.) 100 141 174 213 300 558
S & P COMPUTER SOFTWARE &
SERVICE INDEX .................. 100 141 218 304 551 1,020
</TABLE>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who own more than ten percent of the
Company's Common Stock (collectively, "Filing Persons") to file with the SEC
initial reports of ownership (Form 3), reports in changes of ownership (Form 4),
or annual reports of ownership (Form 5). All Filing Persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.

To the Company's knowledge, based solely on its review of the copies of such
reports furnished to the Company and upon certain other representations made by
filing persons, Paul A. Helbling failed to timely file one (1) Form 3, which
form was subsequently filed. Richard K. Carlin and Laird G. Foshay failed to
timely file one (1) Form 4, which form was subsequently filed.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information, as of June 15, 2000 unless otherwise
indicated, with respect to the number of shares of Common Stock beneficially
owned by (1) each director, nominee for director, and/or named executive officer
individually, (2) all executive officers and directors of the Company as a group
and (3) each stockholder known by the Company to be the beneficial owner of more
than 5% of the Company's Common Stock. The number of shares is exclusive of
shares allocated to the person's account through the Company's 401(k) plan.

Except as noted below, each stockholder has sole voting and investment power
with respect to the shares shown.

10
<PAGE>

NUMBER OF SHARES
OWNERS BENEFICIALLY OWNED(1) % OF CLASS
------ -------------------- ----------
David L. Brown 828,725(2) 4.9%
Dr. Richard K. Carlin 5,540 *
Lee K. Barba - -
Ronald Warren 79,748 *
David M. Berray - -
Roger C. Wadsworth 114,510 *
Paul A. Helbling 4,324 *
Dennis L. Santiago - -
Joseph F. Frantz, II 3,833 *
Greg E. Gensemer 4,924 *
Danny E. Hoover 15,264 *
William T. Melton 8,003 *
Jerrold B. Smith 10,652 *
Alexander T. Wyche 5,050 *
Laird G. Foshay 357,919 2.1%
Dr. Ronald W. Hart 36,599 *
Burt H. Keenan 65,481 *
Roy T. Rimmer, Jr. 20,500 *
Elisabeth Y. Sami - -
William D. Savoy 32,973 *
Stephen C. Wood 44,950 *

National Broadcasting Company,
Inc. and GE Capital Equity
Investments, Inc.
120 Long Ridge Road
Stamford, Connecticut 06927 2,331,348 13.9%

Lacy J. Harber
LJH, Corp.
377 Neva Lane
Denison, Texas 75020 1,495,000 8.9%

Paul G. Allen
Vulcan Ventures Incorporated
110 110th Avenue N.E.,
Suite 550
Bellevue, Washington 98004-5840 1,290,000(3) 7.7%

G. Robert Friedman
Friedman & Associates
Five Post Oak Park, Suite 1800
Houston, Texas 77027 1,053,919 6.3%

All directors and executive
officers as a group
(21 persons) 1,638,995 9.7%

--------------------------------------------------------------------------------
* Less than 1%

(1) Each of the share amounts shown for the directors and officers includes
options to purchase additional shares, which are exercisable within the
next sixty days, as follows: Mr. Brown - 74,769; Dr. Carlin - 5,331; Mr.
Warren - 28,942; Mr. Wadsworth - 30,942; Mr. Helbling - 4,324; Mr. Frantz
- 3,833; Mr. Gensemer - 4,924; Mr. Hoover - 15,264; Mr. Melton - 8,003;
Mr. Smith - 10,652; Mr. Wyche - 5,050; Mr. Foshay - 6,875; Dr. Hart -
9,500; Mr. Keenan - 9,500; Mr. Rimmer - 6,500; Mr. Savoy - 26,973; Mr.
Wood - 5,000.

(2) Includes 636,318 shares owned by the Brown Family Partnership. David L.
Brown has shared voting and investment power in the Brown Family
Partnership along with other family members who are not officers and/or
directors of the Company. Includes 117,638 shares owned by David L. Brown
personally.

(3) Vulcan is owned 100% by Paul G. Allen.

11
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In the normal course of business some members of the Board of Directors have
proposed, and the Company has entered into, business alliances with companies
with which they are associated. In the opinion of management, each of these
transactions or arrangements were entered into on terms as favorable to the
Company as could have been obtained in transactions or arrangements with
unaffiliated third parties.

VULCAN VENTURES, INCORPORATED ("VULCAN")

Pursuant to the terms of a May 20, 1992 stock purchase agreement between Vulcan
and the Company, Vulcan has the right to designate one nominee director to the
Company's Board of Directors for as long as Vulcan (or its affiliate) owns at
least 540,000 shares of Common Stock of the Company. In addition, the Company
has agreed not to take any corporate action to increase its number of directors
without the unanimous written consent of all directors for as long as Vulcan (or
its affiliate) owns at least 540,000 shares of Common Stock of the Company.

KNOWLEDGE EXPRESS DATA SYSTEMS, L.C. ("KE")

KE, of which the Company owns 55.58%, is 30% owned by GRF Interests, Inc.
("GRF"), a company controlled by G. Robert Friedman, a stockholder and a former
director of the Company. The Company provides computer hardware, programming,
systems maintenance, data loading, telecommunications and certain administrative
services to KE. Non-personnel expenditures are billed at the Company's actual
cost. For the year ended December 31, 1999, KE had a net loss of $287,000. The
Company recognized its share of $159,000 plus an additional $72,000 ($231,000 in
total) attributable to the minority shareholders because the minority
shareholders' interest had been reduced to zero.

TELEBUILD, L.C.

Friedman Interests, Inc., a company controlled by G. Robert Friedman, owns
45.42% of Telebuild, L.C. ("Telebuild"). The Company and the Brown Family
Partnership own 15.834% and 25.44%, respectively, of Telebuild. The Brown Family
Partnership is owned by David L. Brown, the Company's Chairman, and other
members of the Brown family. The Company performs services under contract for
Telebuild, consisting primarily of the development, maintenance and operation of
the Telebuild database system and the provision of office space, equipment and
furniture. The Company charges Telebuild for its personnel at a stipulated rate,
which reflects the full absorption of overhead costs to the Company plus an
appropriate profit margin determined by management and approved by the outside
directors. Non-personnel expenditures under the agreement are billed at actual
cost. For the year ended December 31, 1999, $1,369,000, or 5.2%, of the
Company's total revenue was derived from services provided to Telebuild.

NATIONAL BROADCASTING COMPANY, INC.

In a letter agreement dated February 22, 1999 between the National Broadcasting
Company, Inc. ("NBC") and the Company, NBC was granted the right to have an
individual designated by NBC (the "NBC Designee") included as a nominee for the
Board of Directors of the Company. NBC shall have this right until GE Capital
Equity Investments, Inc. ("GE Equity") owns less than 5% of the outstanding
common stock of the Company or the license agreement with NBC terminates or
expires, whichever event occurs earlier. Pursuant to this agreement, NBC has
designated and the Board of Directors has approved Elisabeth Sami.

In addition, GE Equity has the right to designate an individual to be present at
all Board of Director meetings. Such individual will not be a participating or
voting member of the Board of Directors and may remain as a designee as long as
GE Equity owns at least 5% of the Company's outstanding common stock.

GRO CORPORATION

Mr. Greg E. Gensemer serves on the Board of Directors for GRO Corporation. The
Company has entered into licensing and servicing agreements with this company.
As of December 31, 1999, GRO Corporation owed the Company $64,000 in accrued
interest on two notes that were converted to stock during 1999. This accrued
interest was also converted to stock in the first quarter of 2000. The Company
owned 550 shares of GRO Corporation

12
<PAGE>
representing an ownership interest of 4.8% at December 31, 1999. After the first
quarter conversion, the Company's holdings increased to 603 shares.

INDEBTEDNESS OF MANAGEMENT

Roy T. Rimmer, Jr., a member of the Company's Board of Directors, was indebted
to the Company for $71,250 at December 31, 1999. The non-interest bearing
indebtedness arose from license fees and contract personnel reimbursement. The
maximum indebtedness during 1999 was $71,250.

13
<PAGE>
--------------------------------------------------------------------------------
(2) RATIFICATION OF INDEPENDENT AUDITORS FOR 2000
--------------------------------------------------------------------------------

PREVIOUS INDEPENDENT ACCOUNTANTS

On April 10, 2000, the Company dismissed Hein + Associates LLP as the Company's
independent accountant.

Neither of the reports of Hein + Associates LLP on the financial statements for
the past two years contained an adverse opinion or disclaimer of opinion or were
qualified or modified as to uncertainty, audit scope or accounting principles.

The dismissal of Hein + Associates LLP was recommended and approved by the Audit
Committee of the Board of Directors of the Company.

During the Company's two most recent fiscal years and through the period from
December 31, 1999 to April 10, 2000, there were no disagreements with Hein +
Associates LLP on any matters of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements if not
resolved to the satisfaction of Hein + Associates LLP would have caused them to
make reference thereto in their reports on the consolidated financial statements
for such years.

During the Company's two most recent fiscal years and through the period from
December 31, 1999 to April 10, 2000, there were no reportable events (as defined
in Regulation S-K Item 304 (a)(1)(v)).

The Company provided Hein + Associates LLP with a copy of the disclosure it made
in response to Item 304 (a) of Regulation S-K. The Company requested Hein +
Associates LLP to furnish, and Hein + Associates LLP furnished to, the Company a
letter addressed to the Commission stating that it agreed with the statements
made by the Company.

NEWLY ENGAGED INDEPENDENT ACCOUNTANTS

On April 10, the Company engaged Arthur Andersen LLP as its new independent
accountant. Through April 10, 2000, neither the Company nor anyone on its behalf
consulted Arthur Andersen LLP regarding (i) the application of accounting
principles to any transaction, either completed or proposed, or (ii) the type of
audit opinion that might be rendered by Arthur Andersen LLP on the Company's
financial statements. In addition, through April 10, 2000, neither the Company
nor anyone on its behalf consulted Arthur Andersen LLP regarding any matter that
was the subject of a disagreement (as defined in Regulation S-K Item 304 (a) (i)
(iv) ) or a reportable event (as defined in Regulation S-K Item 304 (a) (1) (v)
). In the event the appointment of Arthur Andersen LLP as independent auditors
for 2000 is not ratified by the stockholders, the adverse vote will be
considered as a direction to the Board of Directors to select other auditors for
the fiscal year ending December 31, 2000.

This appointment is hereby submitted to the stockholders for ratification. Such
ratification requires the affirmative vote of a majority of the shares of Common
Stock present or represented by proxy and entitled to vote at the Annual
Meeting.

A representative of Arthur Andersen LLP is expected to be present at the Annual
Meeting and will not make a statement, but will be available to respond to
appropriate stockholder questions.

RECOMMENDATION

The Board of Directors unanimously recommends a vote FOR ratification of the
Board's appointment of Arthur Andersen LLP as the Company's auditors for 2000.

14
<PAGE>
--------------------------------------------------------------------------------
(3) PROPOSED 2000 STOCK OPTION PLAN
--------------------------------------------------------------------------------

The Board of Directors of the Company has unanimously adopted resolutions
approving and submitting to a vote of the stockholders approval of a stock
option plan (the "2000 Stock Option Plan") (i) to authorize 1,000,000 shares of
Common Stock to be subject to the 2000 Stock Option Plan, and (ii) to give the
Compensation Committee of the Company's Board of Directors full discretion as to
the number of options to grant to employees and directors. The full text of the
proposed 2000 Stock Option Plan is attached to this Proxy Statement as Exhibit
A.

RECOMMENDATION AND REQUIRED VOTE

The affirmative vote of the holders of a majority of the Common Stock present or
represented by proxy and entitled to vote on this proposal is required for
approval of this proposal. The Board of Directors recommends a vote FOR approval
of the proposed 2000 Stock Option Plan.

15
<PAGE>
SUMMARY OF PROPOSED 2000 STOCK OPTION

While the Company has been successful in attracting and retaining qualified
personnel, the Company believes that its future success will depend in part on
its continued ability to attract and retain highly qualified personnel. The
Company pays wages and salaries which it believes are competitive, and it has
group health, and life insurance plans. The Company also believes that equity
ownership is an important factor in its ability to attract and retain skilled
personnel, and in the Board meeting held on February 9, 2000 the Board of
Directors adopted the Company's 2000 Stock Option Plan (the "Plan") pursuant to
which options to purchase 2,000,000 shares may be granted to employees and
directors. The maximum number of shares with respect to which options may be
granted each calendar year to an employee shall be 500,000. Cancelled options
are available to be regranted in the future. The discussion of the material
terms of the Plan herein is qualified in its entirety by reference to the Plan
set forth as Exhibit "A".

The purpose of the Plan is to further the interests of the Company, its
subsidiaries and its stockholders by providing incentives in the form of stock
options to key employees and directors who contribute materially to the success
and profitability of the Company. The grants will recognize and reward
outstanding individual performances and contributions and will give such persons
a proprietary interest in the Company, thus enhancing their personal interest in
the Company's continued success and progress. The Plan also assists the Company
and its subsidiaries in attracting and retaining key employees and directors.
The options granted under the Plan may be either Incentive Stock Options, as
that term is defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or nonstatutory options taxed under Section 83 of the
Code. The Plan is administered by the Compensation Committee of the Board of
Directors, which has the exclusive power to select the participants in the Plan,
to establish the terms of the options granted to each participant, and to make
all determinations necessary or advisable under the Plan. Each member of the
Committee must be an outside director, as defined in the Plan.

Options granted pursuant to the Plan generally are not subject to sale,
assignment or transfer other than by will or by the laws of descent and
distribution, or pursuant to a qualified domestic relations order, and may be
exercised during the optionee's lifetime only by him, or following the
optionee's death by his beneficiaries. The Committee may grant options that are
transferable to immediate family members or to trusts or partnerships for such
family members. The option price and number of shares subject to options granted
under the Plan are subject to adjustment upon a reorganization, merger,
consolidation, reclassification, recapitalization, stock split, stock dividend,
and certain other corporate transactions. In the event the optionee's employment
is terminated for any reason other than death, disability, or retirement on or
after the age of 65, unless otherwise agreed all options held by the optionee
shall lapse immediately following the last day of employment. In the event of
the optionee's death, the beneficiaries designated by the optionee shall have
until the earlier of the end of the option period or one year from the
optionee's death to exercise the option; provided, however that the option may
be exercised only for the number of shares for which it could have been
exercised at the time of the optionee's death. In the event of the optionee's
retirement on or after attaining age 65, the option shall lapse at the earlier
of the end of the option period or three months after the date of retirement;
provided, however, that the option may be exercised only for the number of
shares for which it could have been exercised on the retirement date. In the
event of termination of employment due to total and permanent disability, the
option shall lapse at the earlier of the end of the option period or twelve
months after the date of such termination of employment; provided, however that
the option may be exercised only for the number of shares for which it could
have been exercised at the time the optionee became disabled.

The exercise price of incentive stock options granted under the Plan may not be
less than 100% of the fair market value of the Common Stock of the Company on
the date of the grant. With respect to any optionee who owns more than 10% of
the Company's outstanding Common Stock, the exercise price of any incentive
stock option granted must be equal to at least 110% of fair market value on the
date of the grant and the maximum term of the option may not exceed ten (10)
years. The aggregate fair market value of the Common Stock (as determined on the
grant date) with respect to which incentive stock options are exercisable for
the first time by an optionee in any calendar year may not exceed $100,000. The
exercise price of non-qualified stock options granted under the Plan may be any
price determined by the Compensation Committee, but may not be less $1.50 per
share.

16
<PAGE>
Recipients of incentive stock options granted under the Plan will not realize
taxable gain for federal income tax purposes on the date of grant or the date of
exercise of an option. However, the difference between the fair market value of
the stock acquired (on the date of exercise of the option) and the option price
will be an adjustment for purposes of calculating the alternative minimum tax of
the optionee in the year the option is exercised. Recipients of incentive stock
options will incur taxable gain for federal income tax purposes on the
difference between the sales proceeds received and the option price when the
shares acquired through the exercise of incentive stock options have been sold.
If the optionee does not dispose of the shares so acquired until two years after
the date of the grant and one year after the date or exercise of the option, the
gain from the sale will be taxed as long term capital gain or loss and the
Company will not be entitled to a tax deduction in connection with the exercise
of the option. If the optionee does not dispose of the shares prior to the end
of this holding period, the optionee generally will recognize taxable gain in
the year of the disposition. An amount equal to the difference between the fair
market value of the stock (on the date of exercise) and the option price will be
recognized by the optionee as compensation income, and the excess of the sales
proceeds received upon the disposition over the fair market value of the stock
(on the date of exercise), if any, will be taxed as capital gain. The Company
will receive a compensation deduction in the amount of ordinary income
recognized by the optionee in the year of disposition.

For non-qualified stock options, the optionee will realize no income at the time
he is granted a non-qualified stock option. Ordinary income will be realized by
the optionee when the non-qualified stock option is exercised. The amount of
such income will be equal to the excess of the fair market value on the exercise
date of the shares of Common Stock issued to the optionee over the exercise
price of such shares. The optionee's holding period for federal income tax
purposes with respect to the shares acquired will begin on the date of exercise.
The tax basis of the stock acquired on the exercise of the option will be equal
to the sum of (i) the exercise price of such option and (ii) the amount included
in income with respect to the exercise of such option. Any gain or loss on the
subsequent sale of the stock will be either a long-term or short-term capital
gain or loss depending on the optionee's holding period for the Common Stock
disposed of by the optionee. The Company will receive a compensation deduction
for its taxable year within which the employee recognizes compensation with
respect to the nonqualified stock option in an amount equal to the difference
between the fair market value of the stock and the exercise price of the option.

No options have been granted under the Plan at this time. As of June 20, 2000,
the per share market value of the Common Stock was $7.81. Neither the number nor
the value of future option awards to particular participants or groups of
participants is presently determinable.

MATTERS TO BE PRESENTED

As of the date of this Proxy Statement, the only matters which management
intends to present, or is informed that others will present, for action at the
Annual Meeting, are (i) the election of the Board of Directors, (ii) the
ratification of Arthur Andersen LLP as the Company's independent auditors for
2000, and (iii) approval of the proposed 2000 Stock Option Plan. If any other
matters are presented at the Annual Meeting, the accompanying proxy will be
voted in accordance with the best judgment of the proxy holders.

STOCKHOLDER PROPOSALS

Any proposal of an eligible stockholder intended to be presented at the
Company's 2001 Annual Meeting must be received in writing by the Secretary of
the Company on or before March 12, 2001 if the proposal is to be considered by
the Board of Directors for inclusion in the Company's proxy material for that
meeting.

17
<PAGE>
EXPENSES OF SOLICITATION

The Company will bear the expenses of preparing and mailing this proxy material,
as well as the cost of any required solicitation. In addition to this
solicitation of proxies, the officers, directors and regular employees of the
Company, without receiving any additional compensation therefore, may solicit
proxies by mail, telephone, or personal contact. The Company will also request
stockholders, banks and other fiduciaries to forward proxy material to their
principals or customers who are the beneficial owners of shares and will
reimburse them for reasonable out-of-pocket expenses incurred.

BY ORDER OF THE BOARD OF DIRECTORS

David L. Brown
Chairman of the Board

July 10, 2000
Houston, Texas

18
<PAGE>
EXHIBIT A

PROPOSED 2000 STOCK OPTION PLAN

<PAGE>
TELESCAN, INC.
2000 STOCK OPTION PLAN

1. PURPOSE. The purpose of this Stock Option Plan ("the Plan") is to further
the interest of the Company, its subsidiaries and its stockholders by providing
incentives in the form of stock options to key employees and directors who
contribute materially to the success and profitability of the Company. The
grants will recognize and reward outstanding individual performances and
contributions and will give such persons a proprietary interest in the Company,
thus enhancing their personal interest in the Company's continued success and
progress. This Plan will also assist the Company and its subsidiaries in
attracting and retaining key employees and directors. The options granted under
this Plan may be either Incentive Stock Options, as that term is defined in
Section 422 of the Internal Revenue Code of 1986, as amended, or nonstatutory
options taxed under Section 83 of the Internal Revenue Code of 1986, as amended.

2. DEFINITIONS. The following definitions shall apply to this Plan:

(a) "Board" means the board of directors of the Company.

(b) "Change of Control" means the happening of any of the following
events:

(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person"), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either (A) the
then outstanding shares of Common Stock of the Company or (B) the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors;
provided, however, that the following acquisitions shall not
constitute a Change of Control: (I) any acquisition directly from the
Company (excluding an acquisition by virtue of the exercise of a
conversion privilege), (II) any acquisition by the Company, or (III)
any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled
by the Company; or

(ii) Individuals who, as of the effective date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the effective date of the Plan whose
election, or nomination for election by the Company's stockholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or

(iii) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company or the sale or other
disposition of all or substantially all of the assets of the Company.

(d) "Committee" means the Compensation Committee of the Board which shall
consist of two or more directors of the Company appointed by the Board.

(e) "Common Stock" means the Common Stock, par value $0.01 per share, of
the Company or such other class of share or securities as to which the Plan may
be applicable, pursuant to Section 13 herein.

(f) "Company" means Telescan, Inc., a Delaware corporation.

(g) "Continuous Service" means the absence of any interruption or
termination of employment with or service to the Company or any parent or
subsidiary of the Company that now exists or hereafter is organized or

1
<PAGE>
acquired by or acquires the Company. Continuous Service shall not be considered
interrupted in the case of sick leave, military leave, or any other leave of
absence approved by the Company or in the case of transfers between locations of
the Company or between the Company, its parent, its subsidiaries or its
successors.

(h) "Date of Grant" means the date on which the Committee grants an
Option.

(i) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

(k) "Employee" means any person employed on an hourly or salaried basis by
the Company or any parent or subsidiary of the Company that now exists or
hereafter is organized or acquired by or acquires the Company.

(l) "Fair Market Value" means (i) if the Common Stock is not listed or
admitted to trade on a national securities exchange and if bid and ask prices
for the Common Stock are not furnished through NASDAQ or a similar organization,
the value established by the Committee, in its sole discretion, for purposes of
the Plan; (ii) if the Common Stock is listed or admitted to trade on a national
securities exchange or a national market system, the closing price of the Common
Stock, as published in the Wall Street Journal, so listed or admitted to trade
on such day or, if there is no trading of the Common Stock on such date, then
the closing price of the Common Stock on the next preceding date on which there
was trading in such shares; or (iii) if the Common Stock is not listed or
admitted to trade on a national securities exchange or a national market system,
the mean between the bid and ask price for the Common Stock on such date, as
furnished by the National Association of Securities Dealers, Inc. through NASDAQ
or a similar organization if NASDAQ is no longer reporting such information.

(m) "Incentive Stock Option" means a stock option, granted pursuant to
either this Plan or any other plan of the Company, that satisfies the
requirements of Section 422 of the Code and that entitles the Optionee to
purchase stock of the Company or in a corporation that at the time of grant of
the option was a parent or subsidiary of the Company or a predecessor
corporation of any such corporation.

(n) "Non-Employee Director" means any member of the Board who is not an
Employee.

(o) "Nonstatutory Option" shall have the meaning as used in Section 9
herein.

(p) "Option" means a stock option granted pursuant to the Plan.

(q) "Option Period" means the period beginning on the Date of Grant and
ending on the day prior to the tenth anniversary of the Date of Grant or such
shorter termination date as set by the Committee.

(r) "Optionee" means an Employee or Non-Employee Director who receives an
Option.

(s) "Outside Director" means a member of the Board serving on the
Committee who satisfies the requirements of Section 162(m) of the Code.

(t) "Parent" means any corporation which owns 50% or more of the voting
securities of the Company.

(u) "Plan" means this 2000 Stock Option Plan.

(v) "Share" means the Common Stock, as adjusted in accordance with Section
13 of the Plan.

(w) "Subsidiary" means any corporation 50% or more of the voting
securities of which are owned directly or indirectly by the Company at any time
during the existence of this Plan.

3. ADMINISTRATION. This Plan will be administered by the Committee. Each
member of the Committee must be an Outside Director. A majority of the full
Committee constitutes a quorum for purposes of administering the Plan,

2
<PAGE>
and all determinations of the Committee shall be made by a majority of the
members present at a meeting at which a quorum is present or by the unanimous,
written consent of the Committee.

The Committee has the exclusive power to select the Employee participants
and Non-Employee Director participants in this Plan, to establish the terms of
the Options granted to each Employee participant or Non-Employee Director
participant, and to make all other determinations necessary or advisable under
the Plan. The Committee has the sole and absolute discretion to determine
whether the performance of an eligible Employee or Non-Employee Director
warrants an award under this Plan, and to determine the amount of the award. The
Committee has full and exclusive power to construe and interpret this Plan, to
prescribe and rescind rules and regulations relating to this Plan, and take all
actions necessary or advisable for the Plan's administration. Any such
determination made by the Committee will be final and binding on all persons. A
member of the Committee will not be liable for performing any act or making any
determination in good faith.

4. SHARES SUBJECT TO OPTION. Subject to the provisions of Section 13 of the
Plan, the maximum aggregate number of Shares that may be optioned and sold under
the Plan shall be 2,000,000. Such shares may be authorized but unissued, or may
be treasury shares. If an Option shall expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares that were
subject to the Option shall, unless the Plan has then terminated, be available
for other Options under the Plan. The maximum number of Shares with respect to
which Options may be granted each calendar year to an employee shall be 500,000,
subject to adjustment in accordance with Section 13 hereof.

5. EMPLOYEE PARTICIPATION.

(a) ELIGIBLE EMPLOYEES. Every Employee, as the Committee in its sole
discretion designates, is eligible to participate in this Plan. The Committee's
award of an Option to an Employee in any year does not require the Committee to
award an Option to that Employee in any other year. Furthermore, the Committee
may award different Options to different participants. The Committee may
consider such factors as it deems pertinent in selecting participants and in
determining the amount of their Option, including, without limitation: (i) the
financial condition of the Company or its Subsidiaries; (ii) expected profits
for the current or future years; (iii) the contributions of prospective
employees to the profitability and success of the Company or its Subsidiaries;
and (iv) the adequacy of the Employee's other compensation. Employees may
include persons to whom stock, stock options, or other benefits previously were
granted under this or another plan of the Company or any Subsidiary, whether or
not the previously granted benefits have been fully exercised.

(b) NO RIGHT OF EMPLOYMENT. An Optionee's right, if any, to continue to
serve the Company and its Subsidiaries as an Employee will not be enlarged or
otherwise affected by his designation as a participant under this Plan, and such
designation will not in any way restrict the right of the Company or any
Subsidiary, as the case may be, to terminate at any time the employment of any
participant.

(c) NON-TRANSFERABILITY. Each Option granted to Employees by its terms
shall not be transferable by the Optionee otherwise than by will or by the laws
of descent and distribution or pursuant to a qualified domestic relations order
as defined by the Code or Title I of ERISA, or the rules thereunder, and shall
be exercised during the lifetime of the Optionee only by him. Except as set
forth herein, no Option granted to Employees or interest therein may be
transferred, assigned, pledged or hypothecated by the Optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process. The Committee may grant Options that
are transferable, without payment of consideration, to immediate family members
of the Employee or to trusts or partnerships for such family members; the
Committee may also amend outstanding Options to provide for such
transferability.

6. NON-EMPLOYEE DIRECTOR PARTICIPATION.

(a) GRANTS OF AWARDS. The Committee shall have full discretion to grant
Options to Non-Employee Directors at such times as it deems appropriate, to
determine the number of shares of Common Stock underlying such Options, and to
determine the other terms and provisions thereof subject to the other terms of
the Plan.

3
<PAGE>
(b) NON-TRANSFERABILITY. Each Option granted to Non-Employee Directors by
its terms shall not be transferable by the Optionee otherwise than by will or by
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of ERISA, or the rules
thereunder, and shall be exercised during the lifetime of the Optionee only by
him. Except as set forth herein, no Option granted to Non-Employee Directors or
interest therein may be transferred, assigned, pledged or hypothecated by the
Optionee during his lifetime, whether by operation of law or otherwise, or be
made subject to execution, attachment or similar process. The Committee may
grant Options that are transferable, without payment of consideration, to
immediate family members of the Non-Employee Director or to trusts or
partnerships for such family members; the Committee may also amend outstanding
Options to provide for such transferability.

7. OPTION REQUIREMENTS. Each Option granted under this Plan shall satisfy the
following requirements.

(a) WRITTEN OPTION. An Option shall be evidenced by a written instrument
specifying (i) the number of Shares that may be purchased by its exercise, (ii)
the intent of the Committee as to whether the Option is to be an Incentive Stock
Option or a Nonstatutory Option, and (iii) such terms and conditions consistent
with the Plan as the Committee shall determine.

(b) DURATION OF OPTION. Each Option may be exercised only during the
Option Period designated for the Option by the Committee. At the end of the
Option Period the Option shall expire.

(c) OPTION EXERCISABILITY. Unless otherwise provided by the Committee,
each Option shall be exercisable only as to no more than one-fourth (1/4) of the
total number of shares covered by the Option during each twelve-month period
commencing twelve months after the date the Option is granted. Notwithstanding
the foregoing, an Option is exercisable only if the issuance of Shares pursuant
to the exercise would be in compliance with applicable securities laws, as
contemplated by Section 11 of this Plan. To the extent an Option is either
unexercisable or unexercised, the unexercised portion shall accumulate until the
Option both becomes exercisable and is exercised but in no case beyond the date
that is ten years from the date the Option is granted.

(d) ACCELERATION OF VESTING. Subject to the provisions of Section 8(b),
the Board may, in its discretion, provide for the exercise of Options either as
to an increased percentage of shares per year or as to all remaining shares.
Such acceleration of vesting may be declared by the Board at any time before the
end of the Option Period, including, if applicable, upon a Change of Control or
after termination of the Optionee's Continuous Service by reason of death,
disability, retirement or termination of employment.

(e) OPTION PRICE. Except as provided in Section 8(a) and 9, the Option
price of each Share subject to the Option shall equal the Fair Market Value of
the Share on the Option's Date of Grant. Notwithstanding the preceding sentence
or any other provision hereof, no Option granted hereunder shall be at an Option
price less than $1.50 per share.

(f) TERMINATION OF SERVICES. If the Optionee ceases Continuous Service for
any reason other than death, disability, or retirement on or after the age of 65
of the Optionee, all Options held by the Optionee shall lapse immediately
following the last day that the Optionee is employed by the Company, or the
effective date of the termination of his services to the Company. The Committee
may, in its discretion, extend the time during which the Option may be exercised
after termination of services. Any such option shall lapse at the end of the
period established by the Committee for exercise after termination of services.
The Option may be exercised on such termination date, subject to any adjustment
under Section 7(d) and 13.

(g) DEATH. Unless otherwise provided by the Committee, in the case of
death of the Optionee, the beneficiaries designated by the Optionee shall have
one year from the Optionee's demise or to the end of the Option Period,
whichever is earlier, to exercise the Option; provided, however, the Option may
be exercised only for the number of Shares for which it could have been
exercised at the time the Optionee died, subject to any adjustment under Section
7(d) and 13.

4
<PAGE>
(h) RETIREMENT. Unless otherwise provided by the Committee, if the
Optionee retires on or after attaining age 65, the Option shall lapse at the
earlier of the end of the Option Period or three months after the date of
retirement; provided, however, the Option may be exercised only for the number
of Shares for which it could have been exercised on the retirement date, subject
to any adjustment under Section 7(d) and 13.

(i) DISABILITY. In the event of termination of Continuous Service due to
total and permanent disability (within the meaning of Section 422 of the Code),
the Option shall lapse at the earlier of the end of the Option Period or twelve
months after the date of such termination; provided, however, the Option may be
exercised only for the number of Shares for which it could have been exercised
at the time the Optionee became disabled, subject to any adjustment under
Sections 7(d) and 13.

8. INCENTIVE STOCK OPTIONS. Any Options intended to qualify as an Incentive
Stock Option shall satisfy the following requirements in addition to the other
requirements of the Plan:

(a) TEN PERCENT STOCKHOLDERS. An Option intended to qualify as an
Incentive Stock Option granted to an individual who, on the Date of Grant, owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of either the Company or any Parent or Subsidiary, shall be granted at
a price of 110% of Fair Market Value on the Date of Grant and shall be exercised
only during the five-year period immediately following the Date of Grant. In
calculating stock ownership of any person, the attribution rules of Section
424(d) of the Code will apply. Furthermore, in calculating stock ownership, any
stock that the individual may purchase under outstanding options will not be
considered.

(b) MAXIMUM OPTION GRANTS. For Incentive Stock Options, the aggregate Fair
Market Value, determined on the Date of Grant, of stock in the Company
exercisable for the first time by any Optionee during any calendar year, under
the Plan and all other plans of the Company or its parent or Subsidiaries
(within the meaning of Subsection (d) of Section 422 of the Code) in any
calendar year shall not exceed $100,000; provided, however, that if the vesting
of Options is accelerated pursuant to Section 7(d), there shall be no upper
limit as to the Fair Market Value of stock in the Company exercisable for the
first time by any Optionee during any calendar year.

(c) EXERCISE OF INCENTIVE STOCK OPTIONS. No disposition of the shares
underlying an Incentive Stock Option may be made within two years from the Date
of Grant nor within one year after the exercise of such Incentive Stock Option.

9. NONSTATUTORY OPTIONS. Any Option not intended to qualify as an Incentive
Stock Option shall be a Nonstatutory Option. Nonstatutory Options shall satisfy
each of the requirements of Section 7 of the Plan, except the Nonstatutory
Options may be granted at any price at or above $1.50 per Share.

10. METHOD OF EXERCISE. An Option granted under this Plan shall be deemed
exercised when the person entitled to exercise the Option (i) delivers written
notice to the President of the Company of the decision to exercise, (ii)
concurrently tenders to the Company full payment for the Shares to be purchased
pursuant to the exercise, and (iii) complies with such other reasonable
requirements as the Committee establishes pursuant to paragraph 11 of the Plan.
During the lifetime of the Employee to whom an Option is granted, such Option
may be exercised only by him. Payment for Shares with respect to which an Option
is exercised may be in cash, or by certified check, or wholly or partially in
the form of Common Stock having a Fair Market Value equal to the aggregate
Option price. No Person will have the rights of a stockholder with respect to
Shares subject to an Option granted under this Plan until a certificate or
certificates for the Shares have been delivered to him.

An Option granted under this Plan may be exercised in increments of
not less than 10% of the full number of Shares as to which it can be exercised.
A partial exercise of an Option will not effect the holder's right to exercise
the Option from time to time in accordance with this Plan as to the remaining
Shares subject to the Option.

11. TAXES, COMPLIANCE WITH LAW; APPROVAL OF REGULATORY BODIES. The Company,
if necessary or desirable, may pay or withhold the amount of any tax
attributable to any Shares deliverable or amounts payable under this Plan, and
the Company may defer making delivery or payment until it is indemnified to its
satisfaction for the tax. Options are exercisable, and Shares can be delivered
and payments made under this Plan, only in compliance with all applicable
federal and state laws and regulations, including, without limitation, state and
federal securities laws, and the rules of

5
<PAGE>
all stock exchanges on which the Company's stock is listed at any time. An
Option is exercisable only if either (i) a registration statement pertaining to
the Shares to be issued upon exercise of the Option has been filed with and
declared effective by the Securities and Exchange Commission and remains
effective on the date of exercise, or (ii) an exemption from the registration
requirements of applicable securities laws is available. This Plan does not
require the Company, however, to file such registration statement or to assure
the availability of such exemptions. Any certificate issued to evidence Shares
issued under the Plan may bear such legends and statements, and shall be subject
to such transfer restrictions, as the Committee deems advisable to assure
compliance with federal and state laws and regulations and with the requirements
of Section 11 of the Plan. Each Option may not be exercised, and Shares may not
be issued under this Plan, until the Company has obtained the consent or
approval or every regulatory body, federal or state, having jurisdiction over
such matters as the Committee deems advisable.

Each person who acquires the right to exercise an Option by bequest
or inheritance may be required by the Committee to furnish reasonable evidence
of ownership of the Option as a condition to his exercise of the Option. In
addition, the Committee may require such consents and release of taxing
authorities as the Committee deems advisable.

12. AMENDMENT. (a) The Committee may without further action by the
stockholders of the Company and without receiving further consideration from the
Plan participants, amend this Plan or condition or modify Options awarded under
this Plan in response to changes in securities or other laws or rules,
regulations or regulatory interpretations thereof applicable to this Plan or to
comply with stock exchange rules or requirements.

(b) The Committee may at any time and from time to time terminate or
modify or amend the Plan in any respect. The termination or any modification or
amendment of the Plan, except as provided in subsection (a), shall not, without
the consent of a Plan participant, affect his or her rights under an Option
previously granted to him or her pursuant to this Plan.

13. ADJUSTMENT UPON CHANGE OF SHARES. If a reorganization, merger,
consolidation, reclassification, recapitalization, combination or exchange of
share, stock split, stock dividend, rights offering, or other expansion or
contraction of the Common Stock of the Company occurs, the number and class of
Shares for which Options are authorized to be granted under this Plan, the
number and class of Shares then subject to Options previously granted under this
Plan, and the price per Share payable upon exercise of each Option outstanding
under this Plan shall be equitably adjusted by the Committee to reflect such
changes. To the extent deemed equitable and appropriate by the Board, subject to
any required action by stockholders, in any merger, consolidation,
reorganization, liquidation or dissolution, any Option granted under the Plan
shall pertain to the securities and other property to which a holder of the
number of Shares of stock covered by the Option would have been entitled to
receive in connection with such event.

14. LIABILITY OF THE COMPANY. The Company, its parent and any Subsidiary that
is in existence or hereafter comes into existence shall not be liable to any
person for any tax consequences expected but not realized by an Optionee or
other person due to the exercise of an Option.

15. EXPENSES OF PLAN. The Company shall bear the expenses of administering
the Plan.

16. DURATION OF PLAN. Options may be granted under this Plan only within 10
years from the effective date of this Plan.

17. APPLICABLE LAW. The validity, interpretation, and enforcement of this
Plan are governed in all respects by the laws of Delaware and the United States
of America.

18. EFFECTIVE DATE. The effective date of this Plan shall be the date this
Plan is approved by the stockholders of the Company.

19. SECURITIES LAWS. The Plan and the administration of the Plan are intended
to comply with all applicable conditions of Rule 16b-3 or any successor
regulation or statute adopted under the federal securities laws. To the extent
any provision of the Plan or action by the Board or the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.

6
<PAGE>
<PAGE>

PROXY TELESCAN, INC.
SOLICITED BY THE BOARD OF DIRECTORS

The undersigned hereby appoint David L. Brown and Lee K. Barba, each with full
power of substitution as proxies and authorizes them to vote as designated below
all the shares of Common Stock of Telescan, Inc., held of record by the
undersigned on June 20, 2000, at the Annual Meeting of Stockholders to be held
on August 9, 2000, and at any adjournments thereof.
<PAGE>
This Proxy, when properly executed, will be voted in the manner directed herein
by the Stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE
NOMINEES LISTED IN ITEM 1, FOR ITEM 2, FOR ITEM 3, and IN THE DISCRETION OF THE
PROXIES, FOR SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. If
more than one of the proxies designated hereby shall be present in person at the
Annual Meeting, or at any adjournment thereof, either of said proxies present
and voting, either in person or by substitution shall exercise all the powers
herein given.

<TABLE>
<S> <C> <C>
ITEM 1. Election of Directors
[X] FOR all nominees listed below [X] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees below

NOMINEES: Lee K. Barba, David L. Brown, Elisabeth Y. Sami, William D. Savoy and Stephen C. Wood

INSTRUCTION: To withhold authority for any individual nominee, strike a line through the nominee's name above.

ITEM 2. Vote to ratify Arthur Andersen LLP as the Company's independent auditors for the year ending December 31, 2000.
</TABLE>

<TABLE>
<S> <C> <C> <C>
[X] FOR [X] AGAINST [X] ABSTAIN
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
</TABLE>
(CONTINUED FROM OTHER SIDE)
<TABLE>
<S> <C> <C>
ITEM 3. Vote to ratify the 2000 Stock Option Plan.
</TABLE>

<TABLE>
<S> <C> <C> <C>
[X] FOR [X] AGAINST [X] ABSTAIN
</TABLE>
<TABLE>
<S> <C> <C>
ITEM 4. In their discretion the proxies are authorized to vote upon such other business as may properly come before the
meeting.
</TABLE>
Date: ___________________, 2000

_______________________________

SIGNATURE

_______________________________

(TYPE OR PRINTED NAME)

_______________________________

SIGNATURE (IF HELD JOINTLY)

PLEASE SIGN EXACTLY AS NAME
APPEARS HEREON. WHEN SHARES ARE
HELD BY JOINT TENANTS, BOTH
SHOULD SIGN. WHEN SIGNING AS
ATTORNEY, ADMINISTRATOR,
TRUSTEE OR GUARDIAN,
<PAGE>
GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN
FULL CORPORATE NAME BY
PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP,
PLEASE SIGN IN PARTNERSHIP NAME
BY AUTHORIZED PERSONNEL.

THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE
IT IS VOTED AT THE MEETING. PLEASE MARK,
SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN
THE ENVELOPE PROVIDED.