<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, For use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
USDATA 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.
(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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO] USDATA(R)
Redefining Manufacturing Performance
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MONDAY, JUNE 1, 1998
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of USDATA
Corporation (the "Company") will be held at the offices of the Company at 2435
North Central Expressway, Richardson, TX 75080 on Monday, June 1, 1998 at 10:00
a.m., local time, for the following purposes:
1. To elect seven directors;
2. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has established the close of business on April 24,
1998, as the record date for the determination of stockholders entitled to
receive notice of, and to vote at, the meeting or any adjournments thereof. In
order that the meeting can be held and a maximum number of shares can be voted,
whether or not you plan to be present at the meeting in person, please fill in,
date and sign, and promptly return the enclosed Proxy in the return envelope
provided for your use. No postage is required if mailed in the United States.
By order of the Board of Directors,
/s/ Robert L. Drury
Robert L. Drury
Secretary
2435 North Central Expressway
Richardson, TX 75080
April 29, 1998
<PAGE>
USDATA CORPORATION
2435 North Central Expressway
RICHARDSON, TX 75080
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors (the "Board") of USDATA Corporation (the
"Company") for use at the Annual Meeting of Stockholders to be held on Monday,
June 1, 1998 (such meeting and any adjournment or adjournments thereof referred
to as the "Annual Meeting") for the purposes set forth in the accompanying
Notice of Annual Meeting of Stockholders and in this Proxy Statement. The
Company intends to mail this Proxy Statement and related form of Proxy to
stockholders on or about April 29, 1998.
VOTING SECURITIES
Only the holders of shares of common stock, par value $.01 per share (the
"Common Stock"), of the Company of record at the close of business on April 24,
1998 (the "Shares") are entitled to receive notice of, and to vote at, the
Annual Meeting. On that date, there were 11,483,326 Shares outstanding and
entitled to be voted at the Annual Meeting. It is the intention of the persons
named in the Proxy to vote as instructed by the stockholders or, if no
instructions are given, to vote as recommended by the Board. Each stockholder
has one vote per Share on all business of the Annual Meeting.
The seven nominees receiving the highest number of affirmative votes of the
Shares present or represented and entitled to be voted will be elected as
directors. Votes withheld from any director, abstentions and broker non-votes
will be counted for purposes of determining the presence of a quorum for the
transaction of business at the Annual Meeting. Abstentions are counted in
tabulations of the votes cast on proposals presented to stockholders. Broker
non-votes are not counted for purposes of determining whether a proposal has
been approved.
REVOCABILITY OF PROXY
Execution of the enclosed Proxy will not affect a stockholder's right to
attend the Annual Meeting and vote in person. A stockholder, in exercising his
right to vote in person at the Annual Meeting, effectively revokes all
previously executed Proxies. In addition, the Proxy is revocable at any time
prior to the effective exercise thereof by filing notice of a revocation with
the Secretary of the Company or by filing a duly executed Proxy bearing a later
date.
PERSONS MAKING THE SOLICITATION
The solicitation of this Proxy is made by the Company. The cost of soliciting
Proxies on behalf of the Company, including the actual expenses incurred by
brokerage houses, nominees and fiduciaries in forwarding Proxy materials to
beneficial owners, will be borne by the Company. In addition to solicitation by
mail, certain officers and other employees of the Company may solicit Proxies on
behalf of the Company in person or by telephone.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Stockholders intending to present proposals at the next Annual Meeting of
Stockholders to be held in 1999 must notify the Company of the proposal no later
than December 30, 1998.
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 24, 1998, the number of shares of
the Company's Common Stock, the only class of capital stock outstanding,
beneficially owned by each person known to the Company to be the beneficial
owner of more than 5% of the outstanding Shares. The table also shows the
number of Shares owned beneficially by each director, by each named executive
officer, and by all executive officers and directors as a group:
NUMBER OF SHARES PERCENT OF
OWNED (1) CLASS
---------- ------
Safeguard Scientifics, Inc.(2)
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087.................. 3,481,381 28.6%
Technology Leaders I(3)
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087................... 1,654,356 14.4%
Technology Leaders II(4)
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087................... 1,654,356 14.4%
Bob B. Midyett(5)
2211 Sutton Place
Richardson, TX 75080.............. 1,228,224 10.7%
Arthur R. Spector(6)................. 89,582 *
Gary J. Anderson, M.D. (7)........... 12,148 *
James W. Dixon(8).................... 14,450 *
Max D. Hopper(8)..................... 11,250 *
Jerry L. Johnson(9).................. 1,280 *
Robert A. Merry...................... 0 *
Jack L. Messman(10).................. 81,225 *
William G. Moore, Jr................. 0 *
Bill E. Newell(11)................... 20,000 *
Mark S. Grefer(8).................... 12,750 *
H. Kenneth Whitaker.................. 0 *
Named Executive officers and
directors as a group (11 persons)(12) 222,685 1.9%
- -----------------
* Less than 1% of the outstanding Common Stock
(1) Except as otherwise disclosed, the nature of beneficial ownership is the
sole power to vote and to dispose of the Shares (except for Shares held
jointly with spouse).
(2) Safeguard Scientifics (Delaware), Inc. ("Safeguard Delaware"), a wholly
owned subsidiary of Safeguard Scientifics, Inc. ("Safeguard"), is the
record owner of 2,701,843 of the Shares set forth above and Safeguard
Delaware, Inc., a wholly-owned subsidiary of Safeguard, is the record owner
of the remaining 81,300 Shares. Consequently, such Shares are beneficially
owned by Safeguard. Includes 698,238 Shares that may be acquired pursuant
to currently exercisable warrants held by Safeguard Delaware. All of the
Shares beneficially owned by Safeguard have been pledged by Safeguard as
collateral under its bank line of credit. Does not include 1,654,356
Shares beneficially owned by each of Technology Leaders I and Technology
Leaders II, venture capital partnerships in which Safeguard has a
beneficial interest. Safeguard disclaims beneficial ownership of the
Shares beneficially owned by each of Technology Leaders I and Technology
Leaders II.
<PAGE>
(3) Technology Leaders I consists of Technology Leaders L. P. and Technology
Leaders Offshore C.V. Technology Leaders Management L. P., the sole
general partner of Technology Leaders L. P. and the co-general partner of
Technology Leaders Offshore C.V., exercises, through its executive
committee, sole investment and voting power with respect to the Shares
owned by such entities. Of the 1,654,356 Shares owned by Technology
Leaders I, 772,418 Shares are owned by Technology Leaders L. P. and 881,938
Shares are owned by Technology Leaders Offshore C.V. Technology Leaders L.
P., Technology Leaders Offshore C.V., Technology Leaders Management L. P.,
Technology Leaders II L. P., Technology Leaders II Offshore C.V. and
Technology Leaders II Management L. P. are members of a group for purposes
of Sections 13(d) and 13(g) of the Securities Exchange Act of 1934.
Technology Leaders I disclaims beneficial ownership of the Shares
beneficially owned by Technology Leaders II.
(4) Technology Leaders II consists of Technology Leaders II L. P. and
Technology Leaders II Offshore C.V. Technology Leaders II Management L.
P., the sole general partner of Technology Leaders II L. P. and the co-
general partner of Technology Leaders II Offshore C.V., exercises, through
its executive committee, sole investment and voting power with respect to
the Shares owned by such entities. Of the 1,654,356 Shares owned by
Technology Leaders II, 921,972 Shares are owned by Technology Leaders II L.
P. and 732,384 Shares are owned by Technology Leaders II Offshore C.V.
Technology Leaders L. P., Technology Leaders Offshore C.V., Technology
Leaders Management L. P., Technology Leaders II L. P., Technology Leaders
II Offshore C.V. and Technology Leaders II Management L. P. are members of
a group for purposes of Sections 13(d) and 13(g) of the Securities Exchange
Act of 1934. Technology Leaders II disclaims beneficial ownership of the
Shares beneficially owned by Technology Leaders I.
(5) Includes for Mr. Midyett, 335,000 Shares held in a family partnership and
893,224 Shares held in a family trust.
(6) Includes for Mr. Spector, 12,000 Shares that may be acquired pursuant to
stock options that are currently exercisable or that will become
exercisable by June 24, 1998, and 77,582 Shares that may be acquired
pursuant to currently exercisable warrants.
(7) Excludes for Dr. Anderson, 1,654,356 Shares beneficially owned by
Technology Leaders I and 1,654,356 Shares beneficially owned by Technology
Leaders II, of which Dr. Anderson disclaims beneficial ownership.
(8) Includes for Messrs. Dixon, Hopper and Grefer, 12,000 Shares, 11,250 Shares
and 12,750 Shares, respectively, that may be acquired pursuant to stock
options that are currently exercisable or that will become exercisable by
June 24, 1998.
(9) Includes for Mr. Johnson, an aggregate of 200 Shares held in two trusts of
which Mr. Johnson is a co-Trustee. Mr. Johnson shares voting and
dispositive powers of the Shares held by these trusts.
(10) Includes for Mr. Messman, 12,000 Shares that may be acquired upon exercise
of stock options that are currently exercisable or that will become
exercisable by June 24, 1998, 6,620 Shares held in trust for Mr. Messman's
daughter, and 6,620 Shares held in trust for Mr. Messman's son. Mr.
Messman disclaims beneficial ownership of the securities held in trust for
his children.
(11) Includes for Mr. Newell, 20,000 Shares that may be acquired pursuant to
stock options that are currently exercisable or that will become
exercisable by June 24, 1998.
(12) Includes 60,000 Shares that may be acquired pursuant to stock options that
are currently exercisable or that will become exercisable by June 24, 1998,
and 77,582 Shares that may be acquired pursuant to currently exercisable
warrants.
<PAGE>
I. ELECTION OF DIRECTORS
It is intended that the persons named as proxies for this Annual Meeting
will vote in favor of the election of the following nominees as directors of the
Company to hold office until the Annual Meeting of Stockholders in 1999 and
until their successors are elected and have qualified. All of the nominees are
presently serving as directors of the Company. Proxies may not be voted for
more than seven directors. Each of the nominees has consented to serve if
elected. However, if any of the nominees should become unavailable prior to the
election, the holder of the Proxies may vote the Proxies for the election of
such other persons as the Board may recommend, unless the Board reduces the
number of directors to be elected.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF
THE NOMINEES SET FORTH IN THIS PROPOSAL. PROXIES RECEIVED BY THE BOARD WILL BE
SO VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE ON THEIR PROXY CARDS. THE SEVEN
NOMINEES RECEIVING THE HIGHEST NUMBER OF AFFIRMATIVE VOTES OF THE SHARES PRESENT
OR REPRESENTED AND ENTITLED TO BE VOTED SHALL BE ELECTED AS DIRECTORS.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND BUSINESS HAS BEEN A
NAME EXPERIENCE DURING LAST FIVE YEARS DIRECTOR SINCE AGE
- -------------------------------- ------------------------------------ -------------- ---------
<S> <C> <C> <C>
Max D. Hopper Principal and Chief Executive Officer,
Max D. Hopper Associates, an information
systems consulting firm(1)(2)(4).... 1995 63
Gary J. Anderson, M.D. Managing Director, TL Ventures LLC,
a venture capital management
company(5).......................... 1994 58
James W. Dixon Chief Executive Officer, Broadreach
Consulting, Inc. (formerly the Reohr
Group), an information technology staffing
and consulting company(3)(6)........ 1994 51
Jerry L. Johnson Senior Vice President, Operations,
Safeguard Scientifics, Inc., a strategic
information systems company(1)(3)(7) 1997 50
Robert A. Merry President and Chief Executive Officer
of the Company(1)(8)................ 1997 47
Jack L. Messman Chairman and Chief Executive Officer,
Union Pacific Resources Group Inc., an
energy company (2)(3)(9)............ 1994 58
Arthur R. Spector Managing Director, Safeguard
International Fund, L. P., a private
equity fund(1)(2)(10)............... 1994 57
- ---------
</TABLE>
(1) Member of the Executive Committee.
(2) Member of the Compensation Committee.
(3) Member of the Audit Committee.
(4) From December 1985 until January 1995, Mr. Hopper served as Senior Vice
President, Information Systems, of American Airlines, Inc. Mr. Hopper also
served as Chairman of the SABRE Group, the airline reservation system unit
of American Airlines, from April 1993 until January 1995. Mr. Hopper
serves as a Director of the Gartner Group, Inc., VTEL Corporation, SCOPUS
Technology Corporation, Worldtalk Corporation, Payless Cashways, Inc. and
Metrocall, Inc. Mr. Hopper was elected Chairman of the Board of the
Company effective April 1, 1998.
(5) Dr. Anderson has served as a managing director since 1991 and a general
partner since 1995 of Technology Leaders Management L. P., as a managing
director and a general partner of Technology Leaders II
<PAGE>
Management L. P. since 1994, and as a managing director of TL Ventures LLC
since 1997. Dr. Anderson also served as Executive Vice President, Fund
Management of Safeguard Scientifics, Inc. from November 1993 to December
1994. Dr. Anderson is a director of Quadrant Healthcare Inc.
(6) Prior to joining Broadreach Consulting, Inc. (formerly the Roehr Group),
Mr. Dixon served as President and Chief Executive Officer of Information
Technology Consulting, Inc. from September 1996 to October 1997. Mr. Dixon
served as Chairman and Chief Executive Officer of ClientLink, Inc., a
software development company, from March 1996 until August 1996. From June
1988 through February 1996, Mr. Dixon was an officer of CompuCom Systems,
Inc., most recently serving as Chairman of the Board. Mr. Dixon is a
director of AER Energy, Inc.
(7) From 1985 to 1995, Mr. Johnson served in various executive positions at US
West, including vice president of network technology services. Mr. Johnson
is Chairman of OAO Technology Solutions, Inc.
(8) From June 1995 to July 1997, Mr. Merry served as President, Process
Manufacturing Strategic Business Unit, for Electronic Data Systems (EDS).
From March 1992 to June 1995, Mr. Merry served as vice president of
manufacturing and Gulf Atlantic sales manager for EDS.
(9) Mr. Messman is a director of Cambridge Technology Partners (Massachusetts),
Inc., Novell, Inc., Safeguard Scientifics, Inc., Tandy Corp. and Union
Pacific Resources Group Inc.
(10) Mr. Spector has served as a Director of the Company since November 1994 and
Chairman until April 1, 1998. From January 1997 to March 1998, Mr. Spector
served as a managing director of TL Ventures LLC, a venture capital
management company organized to manage day-to-day operations of TL Ventures
III L. P. and TL Ventures III Offshore L. P. From January 1995 through
December 1996, Mr. Spector served as Director of Acquisitions of Safeguard
Scientifics, Inc. from July 1992 until May 1995, Mr. Spector served as Vice
Chairman and Secretary of Casino & Credit Services, Inc. From October 1991
to December 1994, Mr. Spector was Chief Executive Officer and a director of
Perpetual Capital Corporation, a merchant banking organization. Mr.
Spector serves as Chairman of the Board of Neoware Systems, Inc. (formerly
HDS Network Systems Inc.), a manufacturer of network computers and a
provider of desktop computing services, and is a director of DocuCorp
International, Inc.
DIRECTORS' COMPENSATION
Directors are elected annually and hold office until their successors
are elected and have qualified or until their earlier resignation or removal.
Directors are reimbursed for travel expenses incurred in connection with
attendance at meetings or other Company business, but directors are not
compensated for their services as directors.
DIRECTORS' STOCK OPTIONS
Directors who are not employees of the Company and its subsidiaries or
Safeguard and its wholly owned subsidiaries ("Eligible Directors") are entitled
to participate in the 1994 Equity Compensation Plan ("1994 Plan"). No options
were granted to Directors in 1997.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board held four meetings in 1997. The Company's Board has
appointed standing Compensation, Executive, and Audit Committees. The
Compensation Committee reviews and recommends the compensation arrangements for
senior management of the Company, including salaries, bonuses and grants of
options to purchase shares of Common Stock under the Company's stock option and
equity compensation plans. The Compensation Committee met two times during
1997. The Executive Committee, which did not meet during 1997, has the
authority to approve transactions on behalf of the Company that do not exceed $1
million in the aggregate, except where such functions are required by law to be
approved by the full Board of Directors. The Audit Committee recommends the
firm to be appointed as independent certified public accountants to audit the
Company's financial statements, discusses the scope and results of the audit
with the independent certified public accountants, reviews with management and
the independent certified public accountants the Company's interim and
<PAGE>
year-end operating results, considers the adequacy of the internal accounting
controls and audit procedures of the Company and reviews the non-audit services
to be performed by the independent certified public accountants. The Audit
Committee met once during 1997. All of the directors attended at least 75% of
the total number of Board and Committee meetings of which they were members
during the period in which they served as a director, except Mr. Johnson, who
attended 67% of the meetings.
REPORT OF THE BOARD COMPENSATION COMMITTEE
The Compensation Committee of the Board (the "Compensation Committee")
reviews and approves compensation levels recommended by management, including
incentive compensation, for the executives of the Company, and administers the
Company's stock option plans. Messrs. Hopper, Messman and Spector currently
constitute the Compensation Committee.
The Company's former acting Chief Executive Officer, Bill E. Newell,
is an executive of Safeguard and was compensated while acting as Chief Executive
Officer of the Company by Safeguard for services rendered to Safeguard and its
affiliated partnership companies, including the Company. Decisions regarding Mr.
Newell's cash compensation and other benefits paid or awarded to Mr. Newell
during 1997 were determined by the Compensation Committee of the Board of
Directors of Safeguard. Therefore, with respect to compensation issues relating
to Mr. Newell, this report relates only to options which have been granted to
Mr. Newell by the Company to purchase Shares of the Company.
EXECUTIVE COMPENSATION POLICIES
The Company is in a highly competitive industry. In order to succeed,
the Company believes that it must be able to attract and retain outstanding
executives, promote among them the economic benefits of stock ownership in the
Company, and motivate and reward executives who, by their industry, loyalty and
exceptional service, make contributions of special importance to the success of
the business of the Company. The Company has structured its executive
compensation program to support the strategic goals and objectives of the
Company.
Base compensation levels and benefits are initially established for
new executives on the basis of subjective factors, with reference to the
experience and achievements of the individual and the level of responsibility to
be assumed in the Company. Annual increases are determined subjectively based
on the achievement of financial and strategic objectives, levels of individual
responsibility and performance, and general levels of inflation. Annual cash
bonuses are intended to create an incentive for executives who significantly
contribute to and influence the Company's strategic plans and are responsible
for the Company's performance. The aims are to focus executives' attention on
areas such as profitability and asset management, to encourage teamwork and to
tie executive pay to corporate performance goals which are consistent with the
long-term goals of stockholders and other investors. Bonuses are awarded based
on the achievement of annual financial and strategic goals approved by the
Compensation Committee at the beginning of each year. These goals may include a
target range of pretax earnings, earnings per share, return on equity, or other
objective measurement consistent with long-term stockholder goals. The
Compensation Committee approves a target range for specific financial and/or
strategic goals and a range of potential bonus amounts for each executive,
stated as a percentage of base salary. Ranges of potential bonuses are
determined based upon the executive's ability to affect the Company's
performance. Actual bonuses are awarded following the year-end based on the
actual achievement level of the specified corporate goals compared to the target
range of achievement. For fiscal 1997, the Compensation Committee determined
that bonuses would be awarded based primarily upon the achievement of certain
strategic objectives and upon a target range for revenue growth and
<PAGE>
pretax earnings, with the ability to adjust the payout among the participants
based on individual performance.
Grants of Company stock options are intended to align the interests of
executives and key employees with the long-term interests of the Company's
stockholders and other investors and to encourage executives and key employees
to remain in the Company's employ. Grants are not made in every year, but are
awarded subjectively based on a number of factors, including the individual's
level of responsibility, the amount and term of options already held by the
individual, the individual's contributions to the achievement of the Company's
financial and strategic objectives as defined in the Company's annual plan, and
the Company's achievement of its financial and strategic objectives, which may
include the goals described above as well as developing strategic alliances,
identifying and exploiting markets, expanding existing market share and
penetration, expanding operating capabilities and improving net operating
margins and return on equity.
The Compensation Committee is aware that Internal Revenue Code section
162(m) provides that publicly held companies may not deduct in any taxable year
compensation in excess of one million dollars paid to any of the individuals
named in the Summary Compensation Table that is not "performance based" as
defined in section 162(m). The Company believes that stock options granted under
its 1994 Equity Compensation Plan meet the performance-based exception under
section 162(m). The Compensation Committee believes that annual levels of
executive compensation that are not performance based are not likely to exceed
one million dollars in the foreseeable future, and the benefit to the Company of
retaining the ability to exercise discretion under the Company's remaining
incentive compensation plans outweighs the limited risk of loss of tax
deductions under section 162(m). Therefore, the Company does not currently
intend to seek to qualify any of its other incentive compensation plans under
section 162(m).
CEO COMPENSATION
Mr. Merry's compensation upon joining the Company on July 28, 1997,
consisted of an annual base salary of $225,000 and a sign-on bonus of $63,000.
Mr. Merry was not eligible for any performance-based bonus in 1997.
OTHER EXECUTIVE COMPENSATION
The Compensation Committee did not award executive cash bonuses in 1997 due
to the Company's failure to meet the bonus objectives discussed previously.
During 1997, the Compensation Committee granted options under the Company's 1994
Plan to certain of its new executives and employees and to many of its current
executives and employees. The relative number of options granted to executives
and employees was based on each such individual's current responsibilities.
By the Compensation Committee:
Max D. Hopper Jack L. Messman Arthur R. Spector
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, the Compensation Committee consisted of Messrs. Hopper,
Messman and Spector. Mr. Spector served as Chairman of the Board of the Company
during that time.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning compensation paid
during the last three calendar years to the Chief Executive Officer and each of
the Company's other most highly compensated executive officers at December 31,
1997 (collectively, the "Named Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
- -----------------------------------------------------------------------------------------------------------------------------------
AWARDS
----------------------------
OTHER SECURITIES ALL OTHER
ANNUAL RESTRICTED UNDERLYING COMPEN-
COMPENS- STOCK OPTIONS/ SATION($)(6)
NAME AND PRINCIPAL YEAR SALARY ($)(1) BONUS ($)(2) ATION($)(3) AWARD(S)($) SARS (#)(5)
POSITION (4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert A. Merry 1997 $ 96,346 $ 63,000 -- -- -- --
President and
Chief Executive Officer (7)
- -----------------------------------------------------------------------------------------------------------------------------------
Bill E. Newell, former Chief 1997 $180,000 $145,432 -- 20,000 $50,296
Executive Officer (8)
5,000
- -----------------------------------------------------------------------------------------------------------------------------------
William G. Moore, Jr., former 1997 $275,000 $ 0 2,375
President and Chief Executive
Officer (9) 1996 274,017 0 -- -- -- --
1995 250,000 150,000 -- -- 114,000 --
- -----------------------------------------------------------------------------------------------------------------------------------
Mark S. Grefer, former Senior 1997 $145,625 $ 50,000 -- 1,913
Vice President of Worldwide
Sales (10) 1996 107,500 0 1,000 --
1995 62,884 50,750 75,000 --
- -----------------------------------------------------------------------------------------------------------------------------------
H. Kenneth Whitaker, former 1997 $170,250 $ 35,000 -- -- -- 2,375
Senior Vice President of
Product Development (11) 1996 160,813 0 -- -- 1,000 --
1995 148,750 55,394 -- -- 100,000 --
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Amounts shown do not include amounts expended by the Company pursuant to
plans (including group, disability, life, and health insurance) that do not
discriminate in scope, terms or operation in favor of executive officers or
directors and that are generally available to all salaried employees.
(2) With respect to Mr. Newell, the bonus paid in 1997 includes the value of
2,000 shares of common stock of ChromaVision Medical Systems, Inc. and
1,400 shares of common stock of Diamond Technology Partners Incorporated
awarded as a bonus.
(3) Perquisites and other personal benefits for fiscal year 1997 did not exceed
the lesser of $50,000 or 10% of any Named Officer's salary and bonus.
(4) Any dividends that become payable will be paid on restricted stock awards
at the same rate as paid to all stockholders. At December 31, 1996, Mr.
Moore held 273,910 shares of restricted stock, which were repurchased by
the Company in 1997. See "Certain Relationships and Related Transactions."
<PAGE>
(5) The option representing 5,000 shares was issued to Mr. Newell by
Safeguard.
(6) The amount stated represents for Mr. Newell $42,358 life insurance premium,
$738 contribution under Safeguard's 401(k) matched savings plan, and $7,200
pension plan contribution. For Messrs. Moore, Grefer and Whitaker, the
amounts stated represent matched contributions under the Company's 401(k)
Plan, which became effective on November 11, 1996.
(7) Mr. Merry joined the Company in August 1997.
(8) Mr. Newell is a Vice President of Safeguard and served as acting CEO from
March 1997 to August 1997. The cash compensation amounts reported in this
table with respect to Mr. Newell are monies which have been paid by
Safeguard and which represent compensation for services rendered to
Safeguard and its affiliated partnership companies, including the Company.
The Company has not directly reimbursed Safeguard for any part of the
compensation paid to Mr. Newell.
(9) Mr. Moore resigned as President and Chief Executive Officer in March 1997.
(10) Mr. Grefer joined the Company in May 1995 and served as an executive
officer of the Company from January 1996 until his resignation in January
1998.
(11) Mr. Whitaker served as an executive officer of the Company until his
resignation in August 1997.
STOCK OPTIONS
The following tables set forth information with respect to (i) individual
grants of stock options during 1997 to each of the Named Officers, (ii) options
exercised during fiscal year 1997, and (iii) the number of unexercised options
and the value of unexercised in-the-money options at December 31, 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(1)
- -------------------------------------------------------------------------------------------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS/
SECURITIES SARS
UNDERLYING OPTIONS/ GRANTED TO EXERCISE OR
SARS EMPLOYEES IN FISCAL BASE PRICE EXPIRATION 5% 10%
NAME GRANTED (#)(2) YEAR ($/SH)(3) DATE ($) ($)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert A. Merry 450,000 57.7 $ 3.8750 7/29/07 891,246 2,168,568
7/29/05
- -------------------------------------------------------------------------------------------------------------------------------
Bill E. Newell
Company Options 20,000 2.6 $ 3.6875 7/22/05 35,212 84,340
Safeguard Options 5,000(4) 1.7 $32.4375 12/11/05 77,437 185,476
- -------------------------------------------------------------------------------------------------------------------------------
William G. Moore, Jr. 0 -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Mark S. Grefer 50,000 6.4 $ 5.50 5/20/05 131,300 314,487
- -------------------------------------------------------------------------------------------------------------------------------
H. Kenneth Whitaker -- -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The potential realizable values are based on an assumption that the stock
price of the shares of Common Stock of the Company or Safeguard appreciate
at the annual rate shown (compounded annually) from the date of grant until
the end of the option term. These values do not take into account amounts
required to be paid as income taxes under the Code or any applicable state
laws or option provisions providing for termination of an option following
termination of employment, nontransferability or vesting over periods of up
to four years. These amounts are calculated based on the requirements
promulgated by the Securities and
<PAGE>
Exchange Commission and do not reflect the Company's estimate of future
stock price growth of the shares of Common Stock of the Company.
(2) Each option vests 25% each year commencing on the first anniversary of the
grant date, has an eight-year term and continues vesting and remains
exercisable so long as employment with the Company or one of its
subsidiaries continues. The option exercise price may be paid in cash or
by (i) delivery of previously acquired shares or (ii) same day sales, i.e.
cashless broker's exercises.
(3) All options have an exercise price at least equal to the fair market value
on the date of grant of the shares subject to each option.
(4) Options granted to Mr. Newell on December 11, 1997, to purchase shares of
Common Stock of Safeguard under Safeguard's 1990 Stock Option Plan. The
percentage of the total options granted is based on a total of 299,650
options granted by Safeguard to employees in 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARs IN-THE-MONEY OPTIONS/
SHARES ACQUIRED ON VALUE AT FISCAL YEAR-END (#) SARs AT FISCAL YEAR-END ($)(1)
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert A. Merry 0 -- 0 450,000 $ 0 $337,500
- -----------------------------------------------------------------------------------------------------------------------------------
Bill E. Newell 0
Company Options 0 -- 20,000 0 18,750 0
Safeguard Options 0 -- 2,500 12,500 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
William G. Moore, Jr. 0 -- 85,500 0 96,188 0
- ------------------------------------------------------------------------------------------------------------------------------------
Mark S. Grefer 0 -- 37,750 88,250 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
H. Kenneth Whitaker 58,412 $57,144 250 -- 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The value of unexercised in-the-money options is calculated based upon (i)
the fair market value per share of the stock at December 31, 1997, less the
option exercise price, multiplied by (ii) the number of shares subject to
an option. On December 31, 1997, the fair market value of a share of the
Company's common stock was $4.625 and the fair market value of Safeguard's
Common Stock was $31.375. This table is presented solely for the purpose
of complying with the rules of the Securities and Exchange Commission and
does not necessarily reflect the amounts optionees will actually receive
upon the sale of any shares acquired upon the exercise of the options.
<PAGE>
STOCK PERFORMANCE GRAPH
The following chart compares the cumulative total stockholder return on
the Company's Common Stock for the period beginning with the commencement of the
Company's initial public offering on June 16, 1995 through December 31, 1997
with the cumulative total return on the Nasdaq Index and the cumulative total
return for a peer group index for the same period. The peer group consists of
SIC Code 737--Computer Programming and Data Processing Services. The comparison
assumes that $100 was invested on June 16, 1995 in the Company's Common Stock
and in each of the comparison indices, and assumes reinvestment of dividends.
The Company has historically reinvested earnings in the growth of its business
and has not paid cash dividends on its Common Stock.
--------------------------------------------------------------
16-Jun-95 Dec-95 Dec-96 Dec-97
--------------------------------------------------------------
USDATA 100 290 113 93
--------------------------------------------------------------
Nasdaq 100 113 139 171
--------------------------------------------------------------
Peer Group 100 117 149 183
--------------------------------------------------------------
CERTAIN TRANSACTIONS
The Company and Safeguard are parties to an Administrative Services
Agreement pursuant to which Safeguard provides the Company with administrative
support services for a monthly fee of $30,000. The administrative support
services include consultation regarding the Company's general management,
investor relations, financial management, certain legal services, insurance
programs administration, audit administration and tax research and planning.
The annual administrative services fee does not cover extraordinary services
provided by Safeguard to the Company or services that are contracted out. The
initial term of the agreement expired on December 31, 1997, and has been
extended until December 31, 1998, with annual renewals thereafter by mutual
agreement between the parties. The Company expensed $360,000 during 1997 for
these services.
In connection with the purchase of 273,910 shares of Common Stock (the
"Restricted Stock") on February 20, 1995 at a purchase price of $3.50 per share,
William G. Moore, Jr., the former President and Chief Executive Officer of the
Company, borrowed $958,685 from the Company evidenced by a note (the "Note")
bearing interest at the rate of 7.75% per annum. Mr. Moore resigned as an
officer and director of the Company on March 10, 1997. Pursuant to the terms of
a Severance Agreement, Mr. Moore was employed by the Company as a consultant
until December 31, 1997 at a salary level of $275,000. In addition, the Company
has repurchased all of the Restricted Stock in exchange for the cancellation of
all outstanding principal and accrued interest under the Note, which totaled
$958,685 and $161,539, respectively, as of March 10, 1997.
On November 8, 1994, Safeguard and certain other investors acquired
6,198,808 shares of Common Stock from the Company's then majority shareholders
for an aggregate purchase price of approximately $18 million. In connection
therewith, the Company granted to Safeguard a warrant to purchase 698,238 shares
of Common Stock and to Arthur R. Spector, a director of the Company, a warrant
to purchase 77,582 shares of Common Stock. Each warrant is currently
exercisable at an exercise price of $3.02 per share.
The Company and Bob B. Midyett, Jr. were parties to an Employment
Agreement under which Mr. Midyett initially served as Chief Executive Officer
and served as Senior Advisor to the Company. The Employment Agreement had an
initial term of three years, commencing November 8, 1994. Pursuant to the
Employment Agreement, Mr. Midyett
<PAGE>
received annual compensation of $360,000 and reimbursement of certain expenses.
Effective November 8, 1997, the Employment Agreement expired and was not
renewed. For as long as he owns at least 5% of the outstanding Common Stock of
the Company, Mr. Midyett is entitled to serve on the Board of Directors of the
Company.
INDEPENDENT PUBLIC ACCOUNTANTS
Since 1992, the Company has retained Price Waterhouse LLP as its
independent public accountants, and it intends to retain Price Waterhouse LLP
for the current year ending December 31, 1998. A representative of Price
Waterhouse LLP is expected to be present at the Annual Meeting and will have an
opportunity at the meeting to make a statement if he desires to do so and will
be available to respond to appropriate questions.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own more than ten
percent of a registered class of the Company's equity securities ("10%
Stockholders") to file reports of ownership and changes in ownership of Common
Stock and other equity securities of the Company with the Securities and
Exchange Commission ("SEC"). Officers, directors and 10% Stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms that they file. Based solely on its review of the copies of such
forms received by it and written representations from certain reporting persons
that no other reports were required for those persons, the Company believes that
during the period from January 1, 1997 to December 31, 1997, all Section 16(a)
filing requirements applicable to its officers, directors and 10% Stockholders
were complied with, except for late Forms 4 filed by Mr. Midyett and Safeguard
Scientifics, Inc.
OTHER MATTERS
The Company is not aware of any other business to be presented at the
Annual Meeting. If any other matters should properly come before the Annual
Meeting, however, the enclosed Proxy confers discretionary authority with
respect thereto.
The President's Letter and the Company's 1997 Annual Report on Form
10-K, including financial statements and other information with respect to the
Company and its subsidiaries, is being mailed simultaneously to the stockholders
but is not to be regarded as proxy solicitation material.
Dated: April 29, 1998
<PAGE>
- -------------------------------------------------------------------------------
P R O X Y
USDATA CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I hereby constitute and appoint Arthur R. Spector, Robert A. Merry and Robert
L. Drury, and each of them, my true and lawful agents and proxies with full
power of substitution in each, to vote all shares held of record by me as
specified on the reverse side and, in their discretion, on all other matters
which may properly come before the 1998 Annual Meeting of Stockholders of
USDATA Corporation to be held on June 1, 1998, and at any adjournments
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES TO THE BOARD OF DIRECTORS AND AS THE PROXIES
MAY DETERMINE, IN THEIR DISCRETION WITH REGARD TO ANY OTHER MATTER PROPERLY
BROUGHT BEFORE THE MEETING.
PLEASE MARK, SIGN AND DATE THE PROXY CARD ON THE REVERSE SIDE
AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
- FOLD AND DETACH HERE -
<PAGE>
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1. [X] Please mark
your votes as
indicated in
this example
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WHILE VOTING FOR THE
REMAINDER, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST.
WITHHELD
1. ELECTION OF DIRECTORS FOR FOR ALL
Nominees: [_] [_]
Arthur R. Spector Jerry L. Johnson
Gary J. Anderson, M.D. Robert A. Merry
James W. Dixon Jack L. Messman
Max D. Hopper
- --
SIGNATURE(S) ______________ ______________ DATE: _________________________
THIS PROXY MUST BE SIGNED EXACTLY AS NAME APPEARS HEREIN. Joint tenants must
both sign. When signing as attorney, executor, administrator, trustee or
guardian, or for a corporation or partnership, please give full title.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
- FOLD AND DETACH HERE -
<PAGE>
- --------------------------------------------------------------------------------
Your Proxy vote is important,
regardless of the number of shares you own.
Whether or not you plan to attend the meeting in person, please complete, date
and sign the above Proxy card and return it without delay in the enclosed
envelope.
LOGO(R)
- --------------------------------------------------------------------------------
