SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only
(as permitted by
[x] Definitive Proxy Statement Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Visual Data Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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computed pursuant to Exchange Act Rule 0-11 (Set forth the
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<PAGE>
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
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Visual Data Corporation
1291 SW 29 Avenue
Pompano Beach, Florida 33069
Telephone 954-917-6655 Facsimile 954-917-6660
June 15, 1999
Dear Stockholder:
You are cordially invited to attend the 1999 Annual Meeting of the
Stockholders of Visual Data Corporation to be held on Friday, July 16, 1999 at
10 a.m. at Westin Fort Lauderdale, 400 Corporate Drive, Fort Lauderdale, Florida
33334. The formal Notice of 1999 Annual Meeting of Stockholders and Proxy
Statement are attached.
The matters to be acted upon by our stockholders are set forth in the
Notice of 1999 Annual Meeting of Stockholders and include (i) the election of
the Board of Directors which includes an expansion of the Board with an
additional outside director, (ii) ratification of the engagement of Arthur
Andersen LLP as our independent auditors, and (iii) an amendment to the 1996
Stock Option Plan. It is important that your shares be represented and voted at
the meeting. Accordingly, after reading the attached Proxy Statement, please
sign, date and return the enclosed proxy card. Your vote is important regardless
of the number of shares you own.
I hope that you will attend the meeting in person, at which time I will
review the business and operations of Visual Data Corporation.
Sincerely,
/s/ Randy S. Selman
-------------------
Randy S. Selman
Chairman, President and
Chief Executive Officer
<PAGE>
VISUAL DATA CORPORATION
---------------------
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 16, 1999
The 1999 Annual Meeting of the Stockholders of Visual Data Corporation
(the "Company") will be held at 10 a.m., at the Westin Fort Lauderdale, 400
Corporate Drive, Fort Lauderdale, Florida 33334 on Friday, July 16, 1999. At the
1999 Annual Meeting, you will be asked to vote on the following matters:
1. To elect a Board of Directors consisting of six members.
2. To ratify the appointment of Arthur Andersen LLP as the
independent auditors of the Company to serve at the pleasure
of the Board of Directors.
3. To approve an amendment to the Company's 1996 Stock Option
Plan to increase the total number of shares of Common Stock
available for issuance under such plan from 200,000 shares to
2,500,000 shares.
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only stockholders of record, as shown by the transfer books of the
Company, at the close of business on May 25, 1999 will be entitled to notice of
and to vote at the meeting. A list of stockholders entitled to vote at the 1999
Annual Meeting will be available for examination by any stockholder for the
proper purpose during normal business hours at the offices of the Company for a
period of at least 10 days preceding the 1999 Annual Meeting.
The Board of Directors recommends that you vote FOR the Board's
nominees for director, the ratification of the appointment of the independent
auditors and the amendment to the 1996 Stock Option Plan.
By Order of the Board of Directors
/s/ Randy S. Selman
------------------------------------
Randy S. Selman, Chairman, President
June 15, 1999 and Chief Executive Officer
PLEASE FILL IN, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE
PROVIDED AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOU MAY DO SO
IN THE MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT.
<PAGE>
VISUAL DATA CORPORATION
---------------------
PROXY STATEMENT
DATED JUNE 15, 1999
1999 ANNUAL MEETING OF STOCKHOLDERS
JULY 16, 1999
------------------
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors (the
"Board") of Visual Data Corporation (the "Company") to be voted at the 1999
Annual Meeting of Stockholders to be held on July 16, 1999 (the "1999 Annual
Meeting"), and any adjournments thereof. When such proxy is properly executed
and returned, the shares it represents will be voted at the meeting as directed.
If no specification is indicated, the shares will be voted in accordance with
the recommendation of the Board with respect to each matter submitted to the
Company's stockholders for approval. Abstentions will not be voted, but will be
counted for determining the presence of a quorum. Broker non-votes will not be
counted for any purpose. Any stockholder giving a proxy has the power to revoke
it prior to its exercise by notice of revocation to the Company in writing, by
voting in person at the 1999 Annual Meeting or by execution of a subsequent
proxy; provided, however, that such action must be taken in sufficient time to
permit the necessary examination and tabulation of the subsequent proxy or
revocation before the vote is taken.
The shares entitled to vote at the 1999 Annual Meeting consist of
shares of the Company's Common Stock, with each share entitling the holder to
one vote. At the close of business on May 25, 1999, the record date for the 1999
Annual Meeting, there were 6,643,519 shares of the Company's Common Stock issued
and outstanding. This Proxy Statement and the accompanying form of proxy are
first being sent to stockholders on or about June 15, 1999.
In addition to the use of the mails, solicitations may be made by
employees of the Company by telephone, mailgram, facsimile, telegraph, cable and
personal interview. The Company shall bear all expenses for the solicitation of
proxies and has not retained a solicitation firm.
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Proposal 1
ELECTION OF DIRECTORS
NOMINEES AND DIRECTORS
The Company's Board of Directors currently consists of five members.
The Board of Directors wishes to expand its membership to include Mr. Robert J.
Wussler as an additional outside director and, accordingly, six members of the
Board will be elected at the 1999 Annual Meeting. Directors elected at the 1999
Annual Meeting will serve until the next annual meeting of stockholders or until
their successors are elected and qualified. The six nominees receiving the
greatest number of votes cast by the holders of the Common Stock entitled to
vote at the 1999 Annual Meeting will be elected directors of the Company
(assuming a quorum is present). The Company has no reason to believe that any
nominee of the Board will be unable to serve if elected. A vote FOR the nominees
includes discretionary authority to vote for a substitute nominee named by the
Board if any of the nominees becomes unable or unwilling to serve.
The following persons have been nominated by the Board for election to
the Board of Directors:
Name Age Position
---- --- --------
Randy S. Selman(1) 43 Chairman, President and
Chief Executive Officer
Alan M. Saperstein 40 Director,
Executive Vice President,
and Treasurer
Benjamin Swirsky(1)(2) 57 Director
Brian K. Service(1)(2) 51 Director
Eric Jacobs 52 Secretary and Director
Robert J. Wussler(3) 60 Director (nominee)
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
(3) Nominee to the Compensation Committee and Audit Committee
Randy S. Selman. Since the Company's inception in May 1993, Mr. Selman has
served as its Chief Executive Officer, President, and a director and since
September 1996, its acting Chief Financial Officer. Mr. Selman is also a member
of the Compensation Committee of the Board of Directors. Since July 1998 Mr.
Selman has been Chairman of the Board of the Company's majority owned
subsidiary, Entertainment Digital Network, Inc. ("EDnet"). From March 1985
through May 1993, Mr. Selman was Chairman of the Board, President and Chief
Executive Officer of SK Technologies Corporation (OTCBB: SKTC), a
publicly-traded software development company. SKTC develops and markets software
for point-of-sale with complete back office functions such as inventory, sales
analysis and communications. Mr. Selman founded SKTC in 1985 and was involved in
the company's initial public offering in 1989. Mr. Selman's responsibilities
included management of SKTC, public and investor relations, finance, high level
sales and general overall administration.
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Alan M. Saperstein. Mr. Saperstein has served as the Company's Executive Vice
President, Treasurer and a director since its inception in May 1993. Mr.
Saperstein also serves as an alternate member of the Compensation Committee of
the Board of Directors. Since July 1998 Mr. Saperstein has been a member of the
Board of Directors of EDnet. From March 1989 until May 1993, Mr. Saperstein was
a free-lance producer of video film projects. Mr. Saperstein has provided
consulting services for corporations which have set up their own sales and
training video departments. From 1983 through 1989, Mr. Saperstein was the
Executive Director/Entertainment Division of NFL Films where he was responsible
for supervision of all projects, budgets, screenings and staffing.
Benjamin Swirsky. Mr. Swirsky has been a member of the Board of Directors since
July 1997 and serves on the Audit and Compensation Committees of the Board of
Directors. Mr. Swirsky is the owner of Beswir Properties Inc., an investment
capital company. Since June 1998 Mr. Swirsky has been Chairman and CEO of
Zconnect, an e-commerce company, where he serves as Chairman. From June 1993
until January 1998, Mr. Swirsky was President and Chief Executive Officer of
Slater Steel, Inc., a publicly traded company listed on the Toronto Stock
Exchange (SSI) with investments in the steel, steel service, forging, pole-line
hardware and trucking industries. Mr. Swirsky is Chairman of P.C.Docs
International, Inc., a Canadian software company which is publicly-traded
(Nasdaq: DOCSF, TSE: DXX). Mr. Swirsky is also a member of the Board of
Directors of the Four Seasons Hotel Corp., a chain of first class hotels located
throughout the world, and serves on the Audit, Compensation and Governance
committees of the Board. Mr. Swirsky also sits on the Board of Directors of a
number of other companies, including (i) CamVec Corp., a Canadian
publicly-traded company (CAT.CV), (ii) MigraTEC Inc., a publicly-traded company
(Nasdaq: MIGR) where he currently serves as Chairman, (iii) Commercial Alcohols,
Inc., in which he is also a principal shareholder, (iv) Bee Line Monorail
Systems, Inc. (v) Peregrine Industries, Inc. (OTCBB: HVAC), (vi) Kaledon.com,
Inc., where he currently serves as Chairman and (vii) Don Bell Corporation.
Brian K. Service. Mr. Service has been a member of the Board of Directors of the
Company since July 1997 and serves on the Audit and Compensation Committees of
the Board of Directors. Since August 1998 Mr. Service has been a Director of
EDnet. Mr. Service is currently an international business consultant with
clients in North and South America, the United Kingdom, Asia, Australia and New
Zealand. From October 1992 to October 1994 Mr. Service was CEO and Managing
Director of Salmond Smith Biolad, a New Zealand publicly-traded company. From
October 1986 to October 1992 he was CEO and Executive Chairman of Milk Products
Holding (North America) Inc., a wholly-owned subsidiary of the New Zealand Dairy
Board in Santa Rosa California, which was the sole marketer of New Zealand dairy
products in North America.
Eric Jacobs. Mr. Jacobs has been a member of the Board of Directors since July
1997 and has served as Secretary since February 1999. From March 1996 until
August 1997, Mr. Jacobs was Vice President and General Manager of the Company's
wholly owned
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subsidiary, HotelView (R) Corporation and thereafter he has served as Vice
President and General Manager of the Company's wholly owned subsidiary,
ResortView Corporation. Since October 1998 Mr. Jacobs has been a member of the
Board of Directors of EDnet. Since 1976, Mr. Jacobs has served as the Chairman
of the Miami Beach Visitor and Convention Authority and since September 1993 as
Chairman of the Greater Miami and the Beaches Hotel Association. Since 1972 Mr.
Jacobs has been a member of Miami Beach Chamber of Commerce and has served as
its Chairman since September 1996. From 1972 through October 1993, Mr. Jacobs
was the owner of, and served as President and General Manager of, the Tarleton
Hotel, Miami Beach, Florida.
Robert J. Wussler. Mr. Wussler has served as a Director of EDnet since 1995.
From 1994 to the present, he has been the President and Chief Executive Officer
of Affiliate Enterprises, Inc., the company formed by ABC Television affiliates
to pursue new business opportunities, including emerging technology
applications. From 1990 to 1993, he was President and Chief Executive Officer of
COMSAT Video Enterprises, where he managed the acquisition of the NBA Denver
Nuggets. Previously, from 1980 to 1990, he was Senior Vice President of Turner
Broadcasting, where he oversaw the launch of CNN, Headline News and TNT, in
addition to serving as President of SuperStation TBS, and from 1974 to 1978, he
was the President of the CBS Television Network and CBS Sports.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors met seven times during the fiscal year ended
September 30, 1998 and took action an additional seven times by unanimous
written consent. None of the directors attended fewer than approximately 86% of
the total number of meetings of the Board of Directors or committees thereof
held during such period.
The Audit Committee of the Board recommends the firm to be employed as
the Company's independent public accountants and reviews the scope of the audit
and audit fees. In addition, the Audit Committee consults with the independent
auditors with regard to the plan of audit, the audit report and the management
letter, and confers with the independent auditors with regard to the adequacy of
internal accounting controls, as appropriate, out of the presence of management.
The members of the Audit Committee are Messrs. Service and Swirsky, and Mr.
Wussler will be appointed to the Audit Committee if he is elected to the Board
of Directors at the 1999 Annual Meeting. The Audit Committee held one meeting
during the fiscal year ended September 30, 1998 and all of its members attended
such meeting.
The Compensation Committee of the Board administers the Company's 1996
Stock Option Plan and is charged with monitoring, reporting and recommending to
the Board of Directors on all matters concerning compensation and benefits of
the Company's executive officers and senior staff. The Compensation Committee
consists of Messrs. Selman, Service and Swirsky; in matters considered by the
Compensation Committee which directly
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<PAGE>
relate to Mr. Selman, the Compensation Committee consists of Messrs. Service,
Swirsky and Saperstein. Mr. Wussler will be appointed to the Compensation
Committee if he is elected to the Board of Directors at the 1999 Annual Meeting.
The Compensation Committee held one meeting during the fiscal year ended
September 30, 1998 and all of its members attended such meeting.
The Board of the Company does not have a nominating committee.
EXECUTIVE COMPENSATION
Cash Compensation
The following table summarizes all compensation recorded by the Company
in each of the last three fiscal years for the Company's Chief Executive Officer
and each of the other executive officers serving as such whose annual
compensation exceeded $100,000.
<TABLE>
<CAPTION>
Long - Term
Annual Compensation Compensation Awards
------------------- -------------------
Name and Other Annual Restricted Options All Other
Principal Position Year Salary Bonus Compensation Stk Awds SARs(#) LTIP Compen.
- ------------------ ---- ------ ----- ------------ -------- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Randy S. Selman, 1998 $138,363 -0- $9,613(1) -0- -0- -0- -0-
President, Chief 1997 $117,950 -0- $7,500(2) -0- -0- -0- -0-
Executive Officer, 1996 $ 83,000 -0- $2,093(3) -0- 137,230 -0- -0-
acting Chief Financial
Officer, Director
Alan Saperstein, 1998 $138,363 -0- $13,969(4) -0- -0- -0- -0-
Executive Vice President, 1997 $117,950 -0- $10,830(5) -0- -0- -0- -0-
Treasurer and 1996 $ 83,000 -0- $ 5,927(6) -0- 137,230 -0- -0-
Director
David E. Goodman(7) 1998 $135,846 -0- $ 7,521(7) -0- -0- -0- -0-
Executive Vice 1997 $ 18,230 -0- $ 900(8) -0- -0- -0- -0-
President and 1996 $ -0- -0- $ -0- -0- -0- -0- -0-
Chief Operating Officer
</TABLE>
(1) Includes $511 for disability insurance, $1,902 for medical insurance and
a $7,200 automobile allowance.
(2) Includes $672 for disability insurance, $1,428 for medical insurance and
a $5,400 automobile allowance.
(3) Includes $569 for disability insurance and $1,524 for medical insurance.
(4) Includes $321 for disability insurance, $6,448 for medical insurance and
a $7,200 automobile allowance.
(5) Includes $424 for disability insurance, $5,006 for medical insurance and
a $5,400 automobile allowance.
(6) Includes $424 for disability insurance and $5,503 for medical insurance.
(7) Mr. Goodman served in such position from August, 1997 until October,
1998. Includes $321 for disability insurance and a $7,200 automobile
allowance.
(8) Includes a $900 automobile allowance.
6
<PAGE>
OPTION GRANTS IN YEAR ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------
No. of Securities % of Total Options
Underlying Granted to Employees Exercise Expiration
Name Options Granted in Fiscal Year Price Date
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Randy S. Selman,
President, Chief
Executive Officer,
Acting Chief
Financial Officer,
Director 375,000(1) 31.25% $2.125 (1)
Alan Saperstein,
Executive Vice President,
Secretary and
Director 375,000(2) 31.25% $2.125 (2)
David E. Goodman,
Executive Vice
President and
Chief Operating
Officer 400,000(3) 33.3% $2.50 (3)
</TABLE>
(1) Granted pursuant to the terms of the Amended and Restated Employment
Agreement between Mr. Selman and the Company. Of such amount 125,000
options vested on January 8, 1999 and the remaining options vest in
equal parts on each of January 8, 2000 and January 8, 2001. The options
are exercisable for four years from the vesting date. The options
automatically vest and are immediately exercisable in the event of a
change of control of the company, constructive termination of Mr.
Selman or termination of Mr. Selman by the Company other than for
cause. The initial exercise price of the options was $2.50; in November
1998 the Board of Directors reduced the exercise price to $2.125 as a
result of the decline in the market price of the Company's Common Stock
and to provide incentives to senior management.
(2) Granted pursuant to the terms of the Amended and Restated Employment
Agreement between Mr. Saperstein and the Company. Of such amount,
125,000 options vested on January 8, 1999 and the remaining options
vest in equal parts on each of January 8, 2000 and January 8, 2001. The
options are exercisable for four years from the vesting date. The
options automatically vest and are immediately exercisable in the event
of a change of control of the company, constructive termination of Mr.
Saperstein or termination of Mr. Saperstein by the Company other than
for cause. The initial exercise price of the options was $2.50; in
November 1998 the Board of Directors reduced the exercise price to
$2.125 as a result of the decline in the market price of the Company's
Common Stock and to provide incentives to senior management.
(3) Mr. Goodman served as the Company's Chief Operating Officer until
October 1998. The options are exercisable until October, 2002 at an
exercise price of $2.50 per share. In October 1998, pursuant to a
severance agreement, 300,000 of these options vested and the remaining
100,000 options were canceled.
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<PAGE>
In November 1998 the Company granted each of Messrs. Selman and
Saperstein options to acquire 700,000 shares of the Company's Common Stock at an
exercise price of $2.125 per share as part of the Company's executive bonus
program. Of these options, 250,000 vested as a result of the successful
completion of the acquisition of EDnet and the remaining 450,000 options shall
vest upon the earlier of November 19, 2004 or the occurrence of any of the
following: if the Company (i) sells or merges with another entity whereby more
than 25% of the Company's outstanding Common Stock changes ownership; (ii) sells
all, or substantially all, of its assets, or the assets of any of its divisions,
where the proceeds from such sale exceed $5 million; (iii) receives a
substantial financing from either private or public funding where the proceeds
from such financing exceed $5 million; or (iv) achieves certain goals and
objectives as determined by the Board of Directors.
Also in November 1998 the Company granted to each of Messrs. Swirsky
and Service options to acquire 50,000 shares of Common Stock at an exercise
price of $2.125 per share as part of the Company's executive bonus program. All
of such options shall vest on the earlier of November 19, 2004 or the occurrence
of any of the following: if the Company (i) sells or merges with another entity
whereby more than 25% of the Company's outstanding Common Stock changes
ownership; (ii) sells all, or substantially all, of its assets, or the assets of
any of its divisions, where the proceeds from such sale exceed $5 million; (iii)
receives a substantial financing from either private or public funding where the
proceeds from such financing exceed $5 million; or (iv) achieves certain goals
and objectives as determined by the Board of Directors.
All of these options were granted under the 1996 Stock Option Plan,
subject to stockholder approval of Proposal 3 hereunder to increase the number
of shares under the Plan.
The following table sets forth certain information regarding stock
options held as of September 30, 1998 by the named executive officers.
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AGGREGATE OPTION EXERCISES IN YEAR ENDED SEPTEMBER 30, 1998
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
No. of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
Shares September 30, 1998 September 30, 1998(1)
Acquired on Value -------------------- ----------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Randy S. Selman,
President, Chief
Executive Officer,
Acting Chief
Financial Officer -0- n/a 387,230(2) 375,000 $374,188 $46,875
Alan Saperstein,
Vice President,
Secretary and
Director -0- n/a 387,230(2) 375,000 $374,188 $46,875
David E. Goodman,
Executive Vice
President and
Chief Operating
Officer(3) -0- n/a 100,000 400,000 $ 12,500 $50,000
</TABLE>
(1) The dollar value of the unexercised in-the-money options is calculated
based upon the difference between the option exercise price and $2.625
per share, being the closing price of the Company's Common Stock on
September 30, 1998 as reported by The Nasdaq SmallCap Market(TM).
(2) Of such exercisable options, at September 30, 1998 137,230 options were
exercisable at $.00016 per share and the remaining 250,000 options were
exercisable at $2.50 per share. All unexercisable options had an
exercise price of $2.50 per share at September 30, 1998. See Option
Grants in Year Ended September 30, 1998 above.
(3) Mr. Goodman was the Company's Chief Operating Officer until October
1998. The options are exercisable at $2.50 per share. See Option Grants
in Year Ended September 30, 1998 above.
DIRECTORS' COMPENSATION
Directors who are not employees of the Company receive $1,000 per
meeting of the Board of Directors or a committee thereof as compensation for
serving on the Board of Directors or a committee of the Board, as well as
reimbursement of reasonable out-of-pocket expenses incurred in connection with
their attendance at Board of Directors' meetings. Pursuant to the Company's 1996
Stock Option Plan (the "Plan"), directors who
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are not 10% stockholders or employees may receive a grant of Common Stock and
non-qualified stock options as described under the Plan. In the alternative, at
the option of the Company, the Company may grant outside directors fair market
value options outside of the Plan.
On January 9, 1998, the Company granted Mr. Jacobs options to acquire
50,000 shares of Common Stock at an exercise price of $2.125 per share, as
adjusted. The term of these options is for five years. These options are fully
vested and remain exercisable until the expiration date thereof.
EMPLOYMENT AGREEMENTS
Effective January 9, 1998, the Company entered into amended and
restated employment agreements (the "Agreements") with Randy S. Selman, the
Company's Chief Executive Officer, President, acting Chief Financial Officer,
and a director, and with Alan Saperstein, the Company's Executive Vice
President, Treasurer and a director. The Agreements between the Company and each
of Messrs. Selman and Saperstein are substantially similar and superseded in
their entirety previous employment agreements between the Company and each of
Messrs. Selman and Saperstein. The term of the Agreement is for three years from
the effective date of the Agreements and is renewable for successive one year
terms unless terminated. The annual salary under each of the Agreements is
$137,500, which amount will be increased by 10% each year. Messrs. Selman and
Saperstein are also each eligible to receive an annual bonus in cash or stock
equal to 2% of the Company's earnings before income tax, depreciation and
amortization (EBITDA) on that portion of EBITDA that has increased over the
previous year's EBITDA. Additionally, each of Messrs. Selman and Saperstein were
granted options (which contain certain anti-dilution provisions) to purchase
375,000 shares of Common Stock at $2.125 per share, as adjusted, vesting 125,000
options on each anniversary date of the effective date of the Agreement. The
options, which are exercisable for a period of four years from the vesting date,
automatically vest upon the occurrence of certain events, including a change in
control of the Company, constructive termination (as defined in the Agreement)
of the employee, or the termination of the employee other than for cause.
The Agreements also provide, among other things, for (i) participation
in any profit-sharing or retirement plan and in other employee benefits
applicable to employees and executives of the Company, (ii) an automobile
allowance and fringe benefits commensurate with the duties and responsibilities
of Messrs. Selman and Saperstein, and (iii) benefits in the event of disability
and contain certain non-disclosure and non-competition provisions. Additionally,
Messrs. Selman and Saperstein may be granted certain bonus incentives by the
Company's Board of Directors. Furthermore, the Company has agreed to indemnify
each of them for any obligations or guaranties which either of them may have
undertaken on behalf of the Company.
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<PAGE>
Under the terms of the Agreements, the Company may terminate the
employment of Mr. Selman or Mr. Saperstein either with or without cause. If the
Agreement is terminated by the Company without good cause, or by Mr. Selman or
Mr. Saperstein, as applicable, the Company would be obligated to pay that
executive an amount equal to three times that executive's current annual
compensation (including base salary and bonus), payable in bi-weekly
installments (except in the case of a termination upon a change in control
wherein the executive may elect either a lump sum payment, discounted to present
market value or payment over a three year period in bi-weekly installments).
Additionally, the executive would be entitled to participate in and accrue
medical benefits for a period of two years after the date of termination without
cause (by the Company) or for good cause (by the executive). To the extent that
either Messrs. Selman or Saperstein are terminated for cause, no severance
benefits shall be paid.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of May 20, 1999 there are 6,630,019 shares of Common Stock issued
and outstanding. The following table sets forth, as of the close of business on
May 20, 1999, (a) the name, address and number of shares of each person known by
the Company to be the beneficial owner of more than 5% of any class of each the
Company's voting securities and (b) the number of shares of each class of voting
securities owned by each director and all officers and directors as a group,
together with their respective percentage holdings of such shares. A person is
deemed to be the beneficial owner of securities that can be acquired by such
person within 60 days from May 20, 1999 upon exercise of options, warrants or
convertible securities. Each beneficial owner's percentage ownership is
determined by assuming that options, warrants and convertibles securities that
are held by such a person (but not those held by any other person) and are
exercisable within 60 days from May 20, 1999 have been exercised. Unless
otherwise indicated, the address for each person is 1291 SW 29 Avenue, Pompano
Beach, FL 33069.
Name and Amount of Percentage
Address of Beneficial of
of Beneficial Owner Ownership of Stock Class
- ------------------- ------------------ -----
Randy S. Selman(1) 865,849 11.7%
Alan M. Saperstein(2) 887,173 12.0%
Benjamin Swirsky(3) 50,000 *
Brian K. Service(4) 110,938 1.6%
Eric Jacobs(5) 13,600 1.7%
Robert J. Wussler(6) 0 n/a
All Officers and
Directors(7) 2,027,560 24.2%
- --------------
* represents less than 1%
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(1) Includes options to acquire an aggregate of 137,230 shares of Common
Stock at an exercise price of $.00016 per share and options to acquire
an aggregate of 625,000 shares of Common Stock at an exercise price of
$2.125 per share. Excludes options to purchase 250,000 shares of Common
Stock at an exercise price of $2.125 per share and options to purchase
450,000 shares of Common Stock at an exercise price of $2.125 per
share, all of which have not yet vested.
(2) Includes options to acquire an aggregate of 137,230 shares of Common
Stock at an exercise price of $.00016 per share and options to acquire
an aggregate of 625,000 shares of Common Stock at an exercise price of
$2.125 per share. Excludes options to purchase 250,000 shares of Common
Stock at an exercise price of $2.125 per share and options to purchase
450,000 shares of Common Stock at an exercise price of $2.125 per
share, all of which have not yet vested.
(3) Includes options to purchase 50,000 shares at $2.125 per share.
Excludes options to acquire an aggregate of 100,000 shares of Common
Stock at an exercise price of $2.125 per share, of which 50,000 options
were granted in August 1997 immediately following the Company's initial
public offering and 50,000 options were granted in November 1998, all
of which have not yet vested. Mr. Swirsky's address is 350 Fairlawn
Avenue, Toronto, Ontario, Canada.
(4) Includes options to purchase 50,000 shares at $2.125 per share and
warrants to purchase an additional 25,000 shares at $3.00. Excludes
options to acquire an aggregate of 100,000 shares of common stock at an
exercise price of $2.125 per share of which 50,000 options were granted
in August 1997 immediately following the Company's initial public
offering and 50,000 options were granted in November 1998, all of which
have not yet vested. Mr. Service's address is 123 Red Hill Circle,
Tiburon, CA 94920.
(5) Includes options to acquire an aggregate of 100,000 shares of common
stock at an exercise price of $2.125 per share of which 50,000 were
granted in January 1998 and 50,000 were granted in November 1998 and
excludes options to purchase 25,000 shares of common stock at $2.125
that have not vested.
(6) Mr. Wussler is a nominee to the Board of Directors. His address is 7904
Sandalfoot Drive, Potomac, MD 20854.
(7) See footnotes (1) through (6) above.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In February 1997, as a bonus for achieving certain performance goals,
the Company granted each of Messrs. Selman and Saperstein, executive officers
and directors of the Company, options to acquire 137,230 shares of the Company's
common stock at an exercise price of $.00016 per share.
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In August 1998 Mr. Jacobs, a director of both the Company and EDnet,
lent EDnet $200,000 under a one year unsecured promissory note bearing interest
at 12% per annum. Such funds were used by EDnet for general working capital. As
additional consideration for such loan, Mr. Jacobs received a warrant to
purchase 50,000 shares of EDnet's common stock at an exercise price of $.20 per
share. Such loan was repaid in full by EDnet on January 8, 1999 and the warrants
were exercised on April 7, 1999.
Beginning March 1999, EDnet has paid the Company a management fee in
the amount of approximately $4,167 per month. Based upon the services provided
by Messrs. Selman and Saperstein, the Company is paying Messrs.
Selman and Saperstein a fee equal to the fee paid to the Company by EDnet.
The Company has adopted a corporate governance policy which requires
the approval of any transaction between the Company and any officer, director or
5% stockholder by a majority of the independent, disinterested directors. In
addition, pursuant to the inclusion of its securities on The Nasdaq(TM) SmallCap
Market, the Company is subject to compliance with certain corporate governance
standards adopted by The Nasdaq(TM) Stock Market, Inc.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company under Rule 16a-3(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") during the fiscal year ended September 30,
1998 and Forms 5 and amendments thereto furnished to the Company with respect to
the fiscal year ended September 30, 1998, as well as any written representation
from a reporting person that no Form 5 is required, the Company is not aware of
any person that failed to file on a timely basis, as disclosed in the
aforementioned Forms, reports required by Section 16(a) of the Exchange Act
during the fiscal year ended September 30, 1998, other than certain filings by
Messrs. Selman, Saperstein, Jacobs and David E. Goodman, the Company's former
Chief Operating Officer. As a result of ministerial errors, the Forms 4 related
to certain option grants in January 1998 to each of Messrs. Selman, Saperstein
and Jacobs were not filed until March 1998. Likewise, as the result of a
ministerial error, the Form 3 filing for Mr. Goodman related to the granting of
certain options in August 1997 was not filed until December 1997.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION OF THE DIRECTORS
NOMINEES.
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PROPOSAL 2
PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP
AS INDEPENDENT AUDITORS OF THE COMPANY
Arthur Andersen LLP has been the Company's independent auditors since
1997. On May 7, 1999, the Board of Directors approved the continued appointment
of Arthur Andersen LLP for 1999. If the stockholders fail to ratify the
appointment of Arthur Andersen LLP, the Board of Directors will reconsider its
selection.
Audit services of Arthur Andersen LLP during 1998 included the
examination of the consolidated financial statements of the Company and services
related to filings with the Securities and Exchange Commission.
The Audit Committee of the Company intends to meet with Arthur Andersen
LLP in 1999 on a quarterly or more frequent basis. At such times, the Audit
Committee will review the services preformed by Arthur Andersen LLP, as well as
the fees charged for such services.
A representative of Arthur Andersen LLP is expected to be present at
the 1999 Annual Meeting and will have an opportunity to make a statement if he
or she so desires. The representative also is expected to be available to
respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF ARTHUR
ANDERSEN LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
PROPOSAL 3
AMENDMENT OF 1996 STOCK OPTION PLAN
On November 19, 1998 the Board of Directors amended the 1996 Stock
Option Plan (the "Plan") to increase the number of shares of Common Stock
issuable under the Plan to the Company's employees, directors and advisors from
200,000 shares to 2,500,000 shares, subject to approval by the stockholders at
the 1999 Annual Meeting. A copy of the Plan may be obtained from the Corporate
Secretary at the Company's offices at 1291 SW 29 Avenue, Pompano Beach, Florida
33069; telephone 954-917-6655.
OVERVIEW
The stated purpose of the Plan is to increase the employees', advisors,
consultants' and non-employee directors' proprietary interest in the Company and
to align more closely their interests with the interests of the Company's
stockholders, as well as to enable the Company to attract and retain the
services of experienced and highly qualified employees and non-employee
directors. The Compensation Committee of the Board of Directors (the
"Committee") administers the Plan including, without limitation, the selection
of the persons who will be granted Plan Options under the Plan, the type of Plan
Options to be granted, the number of shares subject to each Plan Option and the
Plan Option price.
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Options to purchase Common Stock ("Plan Options") may be issued under
the Plan. Plan Options granted under the Plan may either be options qualifying
as incentive stock options ("Incentive Options") under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or options that do not
so qualify ("Non-Qualified Options"). In addition, the Plan also allows for the
inclusion of a reload option provision ("Reload Option"), which permits an
eligible person to pay the exercise price of the Plan Option with shares of
Common Stock owned by the eligible person and receive a new Plan Option to
purchase shares of Common Stock equal in number to the tendered shares. Any
Incentive Option granted under the Plan must provide for an exercise price of
not less than 100% of the fair market value of the underlying shares on the date
of such grant, but the exercise price of any Incentive Option granted to an
eligible employee owning more than 10% of the Company's Common Stock must be at
least 110% of such fair market value as determined on the date of the grant.
The term of each Plan Option and the manner in which it may be
exercised is determined by the Board of the Directors or the Committee, provided
that no Plan Option may be exercisable more than 10 years after the date of its
grant and, in the case of an Incentive Option granted to an eligible employee
owning more than 10% of the Company's Common Stock, no more than five years
after the date of the grant. In any case, the exercise price of any stock option
granted under the Plan will not be less than 85% of the fair market value of the
Common Stock on the date of grant. The exercise price of Non-Qualified Options
shall be determined by the Board of Directors or the Committee.
The per share purchase price of shares subject to Plan Options granted
under the Plan may be adjusted in the event of certain changes in the Company's
capitalization, but any such adjustment shall not change the total purchase
price payable upon the exercise in full of Plan Options granted under the Plan.
Officers, directors and key employees of and consultants to the Company and its
subsidiaries will be eligible to receive Non-Qualified Options under the Plan.
Only officers, directors and employees of the Company who are employed by the
Company or by any subsidiary thereof are eligible to receive Incentive Options.
All Plan Options are nonassignable and nontransferable, except by will
or by the laws of descent and distribution, and during the lifetime of the
optionee, may be exercised only by such optionee. If an optionee's employment is
terminated for any reason, other than his death or disability or termination for
cause, or if an optionee is not an employee of the Company but is a member of
the Company's Board of Directors and his service as a Director is terminated for
any reason, other than death or disability, the Plan Option granted to him shall
lapse to the extent unexercised on the earlier of the expiration date or 30 days
following the date of termination. If the optionee dies during the term of his
employment, the Plan Option granted to him shall lapse to the extent unexercised
on the earlier of the expiration date of the Plan Option or the date one year
following the date of
15
<PAGE>
the optionee's death. If the optionee is permanently and totally disabled within
the meaning of Section 22(c)(3) of the Code, the Plan Option granted to him
lapses to the extent unexercised on the earlier of the expiration date of the
option or one year following the date of such disability.
The Board of Directors or the Committee may amend, suspend or terminate
the Plan at any time, except that no amendment shall be made which (i) increases
the total number of shares subject to the Plan or changes the minimum purchase
price therefor (except in either case in the event of adjustments due to changes
in the Company's capitalization), (ii) affects outstanding Plan Options or any
exercise right thereunder, (iii) extends the term of any Plan Option beyond ten
years, or (iv) extends the termination date of the Plan.
Unless the Plan shall theretofore have been suspended or terminated by
the Board of Directors, the Plan shall terminate on approximately 10 years from
the date of the Plan's adoption. Any such termination of the Plan shall not
affect the validity of any Plan Options previously granted thereunder.
As of June 3, 1999, options for 1,062,450 shares of Common Stock have
been granted pursuant to the Plan. Of such amount, 450,000 options are granted
to each of Messrs. Selman and Saperstein and 50,000 options are granted to each
of Messrs. Swirsky and Service, all of which are subject to stockholder approval
of this Proposal 3 increasing the number of shares under the Plan. See Proposal
1. - Executive Compensation. The potential benefit to be received from a Plan
Option is dependent on increases in the market price of the Common Stock. The
ultimate dollar value of the Plan Options that have been or may be granted under
the Plan is not currently ascertainable. On June 3, 1999, the closing price of
the Company's Common Stock as reported on The Nasdaq SmallCap Market (TM) was
$19.375.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" AMENDMENT OF THE 1996 STOCK
OPTION PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UNDER SUCH
PLAN FROM 200,000 SHARES TO 2,500,000 SHARES.
STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be
presented by such stockholders at the 2000 Annual Meeting must be received by
the Company no later than February 15, 2000 in order to have them included in
the proxy statement and form of proxy relating to that meeting. In addition, the
proxy solicited by the Board of Directors for the 2000 Annual Meeting of
Stockholders will confer discretionary authority to vote on any stockholder
proposal presented at that meeting, unless the Company is provided with notice
of such proposal no later than May 1, 2000.
OTHER MATTERS
Management is not aware of any other matters to be presented for action
at the Meeting. However, if any other matter is properly presented, it is the
intention of the persons named in the enclosed form of proxy to vote in
accordance with their best judgment on such matter.
16
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ANNUAL REPORTS
The Company's 1998 Annual Report to Stockholders, which contains
selected information from the Company's Annual Report on Form 10-KSB and its
consolidated financial statements for the year ended September 30, 1998,
accompanies this proxy statement. The Company's Annual Report on Form 10-KSB for
the year ended September 30, 1998 will also be made available (without
exhibits), free of charge, to interested stockholders upon written or oral
request to Investor Relations, Visual Data Corporation, 1291 SW 29 Avenue,
Pompano Beach, Florida 33069; telephone 954-917-6655.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Randy S. Selman
-------------------
Randy S. Selman, Chairman, President and
Chief Executive Officer
June 15, 1999
<PAGE>
VISUAL DATA CORPORATION
1999 ANNUAL MEETING OF STOCKHOLDERS
JULY 16, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISUAL DATA
CORPORATION.
The undersigned hereby appoints Randy S. Selman proxy with power of
substitution and hereby authorizes him to represent and to vote, as designated
below, all of the shares of Common Stock of Visual Data Corporation (the
"Company") held of record by the undersigned on May 25, 1999 at the 1999 Annual
Meeting of Stockholders to be held in Fort Lauderdale, Florida on Friday, July
16, 1999, at 10 a.m., local time, and at all adjournments thereof, with all
powers the undersigned would possess if personally present. In his discretion,
the Proxy is authorized to vote upon such other business as may properly come
before the meeting.
1. Election of Directors
Nominees: Randy S. Selman, Alan M. Saperstein, Benjamin Swirsky, Brian
K. Service, Eric Jacobs and Robert J. Wussler.
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
[ ] FOR all nominees,
except as noted below:
--------------------
Nominee exception
2. Proposal to ratify the appointment of Arthur Andersen LLP as
independent auditors of the Company for the fiscal year ending
September 30, 1999 to serve at the pleasure of the Board of Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to amend the 1996 Stock Option Plan to increase the number of
shares of Common Stock issuable under such Plan from 200,000 shares to
2,500,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
<PAGE>
DIRECTED BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE THIS PROXY WILL
BE VOTED "FOR" PROPOSALS 1, 2 AND 3. THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT
OF THE NOTICE OF 1999 ANNUAL MEETING AND PROXY STATEMENT FURNISHED IN CONNECTION
THEREWITH AND HEREBY RATIFIES THAT THE SAID ATTORNEY AND PROXIES MAY DO BY
VIRTUE HEREOF.
DATED:_________________
__________________________________
(Signature)
__________________________________
(Signature if jointly held)
__________________________________
(Printed name(s))
Please sign exactly as name appears herein. When shares are held by Joint
Tenants, both should sign, and for signing as attorney, as executor, as
administrator, trustee or guardian, please give full title as such. If held by a
corporation, please sign in the full corporate name by the president or other
authorized officer. If held by a partnership, please sign in the partnership
name by an authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
IN THE ENCLOSED ENVELOPE. THANK YOU.
