Edgar Filing: MICROSTRATEGY INC

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 [_]

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[X] Preliminary Proxy Statement Commission Only
(as permitted by Rule 14a-
6(e)(2))

[_] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12

MICROSTRATEGY INCORPORATED
(Name of Registrant as Specified In Its Charter)

n/a
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

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June 29, 2001

Dear MicroStrategy Stockholder:

You are cordially invited to our 2001 Annual Meeting of Stockholders on
Monday, July 16, 2001, beginning at 9:00 a.m., local time, at the Marriott
Dulles Airport, 45020 Aviation Drive, Dulles, Virginia 20166. This will be
MicroStrategy's third Annual Meeting of Stockholders since our initial public
offering in June 1998.

The enclosed notice of annual meeting sets forth the matters that will be
presented at the meeting, which are described in more detail in the enclosed
proxy statement. The Board of Directors recommends that stockholders vote "FOR"
these proposals.

A reception for all stockholders will be held immediately following the
meeting. We look forward to seeing you there.

Very truly yours,

Michael J. Saylor
Chairman of the Board and Chief
Executive Officer

[LOGO]

1861 International Drive
McLean, Virginia 22102

Notice of Annual Meeting of Stockholders to

be Held on Monday, July 16, 2001

The Annual Meeting of Stockholders (the "Annual Meeting") of MicroStrategy
Incorporated, a Delaware corporation (the "Company"), will be held at the
Marriott Dulles Airport, 45020 Aviation Drive, Dulles, Virginia 20166 on
Monday, July 16, 2001 at 9:00 a.m., local time, to consider and act upon the
following matters:

1. To elect eight (8) directors for the next year;

2. To approve the Amended and Restated 1999 Stock Option Plan to increase
the number of shares of Class A Common Stock reserved for issuance
under the plan from 11,000,000 to 23,500,000 shares;

3. To approve the Amended and Restated 1997 Stock Option Plan for French
Employees to increase the number of shares of Class A Common Stock
reserved for issuance under the plan from 600,000 to 800,000 shares;

4. To approve the issuance of shares of Class A Common Stock upon
conversion of shares of Series A Convertible Preferred Stock and as
dividends thereon;

5. To approve the issuance of shares of Class A Common Stock (i) upon
exchange of shares of Series A Convertible Preferred Stock and (ii)
upon conversion of shares of Series B Convertible Preferred Stock,
Series C Convertible Preferred Stock, Series D Convertible Preferred
Stock and Series E Convertible Preferred Stock to be issued in
exchange for shares of Series A Convertible Preferred Stock (including
any shares of Class A Common Stock issuable in lieu of cash dividends
thereon);

6. To approve the issuance of shares of Class A Common Stock upon
conversion of 7 1/2% Series A Unsecured Notes to be issued to class
members pursuant to the settlement agreement among the Company,
certain of the Company's officers and directors and plaintiffs'
counsel, approved by the United States District Court for the Eastern
District of Virginia on April 2, 2001;

7. To ratify the selection of PricewaterhouseCoopers LLP as the Company's
independent auditors for the current fiscal year; and

8. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.

Stockholders of record at the close of business on May 17, 2001 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. The stock transfer books of the Company will remain open.

By Order of the Board of Directors,

Sanju K. Bansal,
Vice Chairman, Executive Vice
President, Chief Operating Officer
and Secretary

McLean, Virginia

June 29, 2001

A STOCKHOLDER MAY OBTAIN AN ADMISSION TICKET TO THE MEETING BY IDENTIFYING
HIMSELF OR HERSELF AT THE MEETING AS A STOCKHOLDER AS OF THE RECORD DATE. FOR
A RECORD OWNER, POSSESSION OF A PROXY CARD WILL BE ADEQUATE IDENTIFICATION.
FOR A BENEFICIAL-BUT-NOT-OF-RECORD OWNER, A COPY OF A BROKER'S STATEMENT
SHOWING SHARES HELD FOR HIS OR HER BENEFIT ON MAY 17, 2001 WILL BE ADEQUATE
IDENTIFICATION.

WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES AT THE ANNUAL MEETING. NO
POSTAGE NEED BE AFFIXED IF THE PROXY IS MAILED IN THE UNITED STATES.

MICROSTRATEGY INCORPORATED
1861 International Drive
McLean, Virginia 22102

Proxy Statement for the Annual Meeting of Stockholders

to be Held on Monday, July 16, 2001

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of MicroStrategy Incorporated (the
"Company") for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held on Monday, July 16, 2001 at the Marriott Dulles Airport,
45020 Aviation Drive, Dulles, Virginia 20166 at 9:00 a.m., local time, and at
any adjournment of the Annual Meeting. All executed proxies will be voted in
accordance with the stockholders' instructions, and if no choice is specified,
executed proxies will be voted in favor of the matters set forth in the
accompanying Notice of Meeting. Any proxy may be revoked by a stockholder at
any time before its exercise by delivery of written revocation or a
subsequently dated proxy to the Secretary of the Company or by voting in
person at the Annual Meeting.

On May 17, 2001, the record date for the determination of stockholders
entitled to vote at the Annual Meeting (the "Record Date"), there were
outstanding and entitled to vote an aggregate of 31,155,338 shares of Class A
Common Stock of the Company, par value $0.001 per share ("Class A Common
Stock"), and an aggregate of 50,975,642 shares of Class B Common Stock of the
Company, par value $0.001 per share ("Class B Common Stock," and together with
the Class A Common Stock, the "Common Stock"). Each share of Class A Common
Stock entitles the record holder thereof to one vote on each of the matters to
be voted on at the Annual Meeting and each share of Class B Common Stock
entitles the record holder thereof to ten votes on each of the matters to be
voted on at the Annual Meeting.

The Company's Annual Report to Stockholders for the fiscal year ended
December 31, 2000 ("Fiscal Year 2000") is being mailed to stockholders, along
with these proxy materials, on or about June 29, 2001.

Votes Required

The holders of a majority of the votes entitled to be cast by the shares of
Common Stock outstanding and entitled to vote at the Annual Meeting shall
constitute a quorum for the transaction of business at the Annual Meeting.
Shares of Common Stock represented in person or by proxy (including shares
which abstain or do not vote with respect to one or more of the matters
presented for stockholder approval) will be counted for purposes of
determining whether a quorum is present at the Annual Meeting.

The affirmative vote of the holders of a plurality of the votes cast by the
holders of Common Stock voting on the matter is required for the election of
directors. For each other matter voted upon at the Annual Meeting, the
affirmative vote of a majority of the votes cast by the holders of Common
Stock voting on the matter is required for approval.

Shares which abstain from voting as to a particular matter, and shares held
in "street name" by brokers or nominees who indicate on their proxies that
they do not have discretionary authority to vote such shares as to a
particular matter, will not be counted as votes in favor of such matter, and
will also not be counted as shares voting on such matter. Accordingly,
abstentions and "broker non-votes" will have no effect on the voting on
matters that come before the Annual Meeting.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of February 28, 2001 unless otherwise
indicated, the beneficial ownership of the Common Stock of the Company by (i)
each person known by the Company to beneficially own more than 5% of any class
of the Company's Common Stock, (ii) each director or nominee for director,
(iii) each of the executive officers (or former executive officers) named in
the Summary Compensation Table set forth under the caption "Executive
Compensation" below, and (iv) all directors and executive officers as a group:

Number of Shares Percentage of
Beneficially Class
Beneficial Owner(1) Owned(2)(3) Outstanding(3)(4)
------------------- ---------------- -----------------

Michael J. Saylor(5)....................... 43,534,865 53.4%
Sanju K. Bansal(6)......................... 8,698,958 10.7
Eric F. Brown(7)........................... 100,000 *
Jonathan F. Klein(8)....................... 68,946 *
Stephen S. Trundle(9)...................... 452,878 *
Eric D. Driscoll(10)....................... 17,274 *
Joseph P. Payne(11)........................ 30,936 *
Frank A. Ingari(12)........................ 45,000 *
Jonathan J. Ledecky(13).................... 38,000 *
Ralph S. Terkowitz(14)..................... 38,000 *
John W. Sidgmore(15)....................... 18,000 *
F. David Fowler(16)........................ 0 *
Stuart B. Ross(16)......................... 0 *
Thomas P. Spahr(17)........................ 1,582,242 2.0
Capital Group International, Inc.(18)...... 1,626,900 2.0
Citadel Investment Group, L.L.C.(19)....... 2,664,845 3.3
John Hancock Financial Services, Inc.(20).. 1,549,000 1.9
Nevis Capital(21).......................... 2,474,850 3.1
All executive officers and directors as a
group (9 persons)(2)...................... 52,944,647 64.8

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

(1) Each person named above (except as otherwise indicated in the footnotes
below) has an address in care of MicroStrategy Incorporated, 1861
International Drive, McLean, Virginia 22102.

(2) The shares of the Company listed in this table are shares of Class B
Common Stock, unless otherwise indicated or set forth in the footnotes
to this table. Shares held by the directors and executive officers as a
group include options to purchase 363,300 shares of Class A Common Stock
of the Company that are exercisable within 60 days after February 28,
2001.

(3) The inclusion of any shares of Common Stock deemed beneficially owned
does not constitute an admission of beneficial ownership of those
shares. In accordance with the rules of the SEC, each stockholder is
deemed to beneficially own any shares subject to stock options that are
currently exercisable or exercisable within 60 days after February 28,
2001, and any reference below to shares subject to outstanding stock
options held by the person in question refers only to such stock
options.

(4) The number of shares deemed outstanding as of February 28, 2001 includes
(i) 30,313,030 shares of Class A Common Stock and (ii) 51,165,624 shares
of Class B Common Stock, plus any shares of Common Stock subject to
outstanding stock options exercisable by the person in question within
60 days after February 28, 2001.

(5) Mr. Saylor's holdings of Common Stock consist of (i) 39,257,110 shares
of Class B Common Stock held beneficially by Mr. Saylor as a result of
his beneficial ownership in Alcantara LLC and 400,000 shares of Class B
Common Stock held in trust (an aggregate of approximately 77.5% of the
Class B Common Stock outstanding), and (ii) 3,030,000 shares of Class A
Common Stock held beneficially by Mr. Saylor as a result of his
beneficial ownership in Alcantara LLC, 535,155 shares of Class A Common
Stock held in his own name and 312,600 shares of Class A Common Stock
held beneficially by Mr. Saylor in a foundation (an aggregate of
approximately 12.8% of the Class A Common Stock outstanding).

(6) Mr. Bansal's holdings of Common Stock consist of (i) 8,059,681 shares of
Class B Common Stock held beneficially by Mr. Bansal as a result of his
beneficial ownership in Shangri-La LLC, 439,046 shares of Class B Common
Stock held in trust and 16,954 shares of Class B Common Stock held in
his own name (an aggregate of approximately 16.6% of the Class B Common
Stock outstanding), and (ii) 19,000 shares of Class A Common Stock held
beneficially by Mr. Bansal as a result of his beneficial ownership in
Shangri-La LLC, 106,277 shares of Class A Common Stock held in his own
name and 58,000 shares of Class A Common Stock held beneficially by Mr.
Bansal in a foundation (an aggregate of approximately 0.6% of the Class
A Common Stock outstanding).

(7) Mr. Brown's holdings of the Common Stock consist of options exercisable
within 60 days after February 28, 2001 for 100,000 shares of Class A
Common Stock.

(8) Mr. Klein's holdings of Common Stock consist of 42,646 shares of Class A
Common Stock and options exercisable within 60 days after February 28,
2001 for 26,300 shares of Class A Common Stock.

(9) Mr. Trundle's holdings of Common Stock consist of 230,878 shares of
Class A Common Stock, 100,000 Shares of Class B Common Stock
(approximately 0.002% of the Class B common stock outstanding), and
options exercisable within 60 days after February 28, 2001 for 122,000
shares of Class A Common Stock. Mr. Trundle resigned from the Company on
April 10, 2001.

(10) Mr. Driscoll's holdings of Common Stock consist of 15,274 shares of
Class A Common Stock and options exercisable within 60 days after
February 28, 2001 for 2,000 shares of Class A Common Stock. Mr. Driscoll
ceased serving in the capacity of an executive officer of the Company on
November 29, 2000.

(11) Mr. Payne's holdings of Common Stock consist of 936 shares of Class A
Common Stock and options exercisable within 60 days after February 28,
2001 for 30,000 shares of Class A Common Stock. Mr. Payne ceased serving
in the capacity of an executive officer of the Company on November 29,
2000 and resigned from the Company on February 28, 2001.

(12) Mr. Ingari's holdings of Common Stock consist of 20,000 shares of Class
A Common Stock and options exercisable within 60 days after February 28,
2001 for 25,000 shares of Class A Common Stock.

(13) Mr. Ledecky's holdings of Common Stock consist of 2,000 shares of Class
A Common Stock and options exercisable within 60 days after February 28,
2001 for 36,000 shares of Class A Common Stock.

(14) Mr. Terkowitz's holdings of Common Stock consist of 2,000 shares of
Class A Common Stock held beneficially by Mr. Terkowitz in trust and
options exercisable within 60 days after February 28, 2001 for 36,000
shares of Class A Common Stock.

(15) Mr. Sidgmore's holdings of Common Stock consist of options exercisable
within 60 days after February 28, 2001 for 18,000 shares of Class A
Common Stock.

(16) Mr. Fowler and Mr. Ross were each elected to the Company's Board of
Directors on June 7, 2001. Information regarding the number of shares of
Common Stock beneficially owned by Mr. Fowler and Mr. Ross is as of June
7, 2001.

(17) Mr. Spahr's holdings of Common Stock consist of 1,364,000 shares of
Class B Common Stock (approximately 2.7% of the Class B Common Stock
outstanding), 139,000 shares of Class A Common Stock in his own name,
50,000 shares of Class A Common Stock held beneficially by Mr. Spahr in
trust, 19,000 shares of Class A Common Stock held beneficially by Mr.
Spahr in a foundation and options exercisable within 60 days after
February 28, 2001 for 10,242 shares of Class A Common Stock.

(18) Information regarding the number of shares of Common Stock beneficially
owned by Capital Group International, Inc. includes shares beneficially
owned by a wholly-owned subsidiary, Capital Guardian Trust Company, and
is based on the most recent Schedule 13G of such entities received by
the Company, which reported such ownership as of December 29, 2000. All
shares beneficially held by Capital Group International consist of Class
A Common Stock (approximately 5.7% of the Class A Common Stock
outstanding as of December 29, 2000). The address of Capital Group
International, Inc. is 11100 Santa Monica Boulevard, Los Angeles,
California 90025.

(19) Information regarding the number of shares of Common Stock beneficially
owned by Citadel Investment Group, L.L.C. includes shares beneficially
owned by affiliates Citadel Limited Partnership, GLB Partners, L.P.,
Wellington Partners Limited Partnership, Kensington Global Strategies
Fund, Ltd., Wingate Capital Ltd., Fisher Capital Ltd. and Kenneth
Griffin, and is based on the most recent Schedule 13G of such

entities and individual received by the Company, which reported such
ownership as of December 31, 2000. All shares beneficially held by such
entities and individual consist of Class A Common Stock (approximately
8.8% of the Class A Common Stock outstanding as of December 31, 2000). The
address of Citadel Investment Group, L.L.C. is 225 W. Washington, 9th
Floor, Chicago, Illinois 60606.

(20) Information regarding the number of shares of Common Stock beneficially
owned by John Hancock Financial Services, Inc. includes shares
beneficially owned by affiliates John Hancock Life Insurance Company,
John Hancock Subsidiaries, Inc., The Berkeley Financial Group, Inc. and
John Hancock Advisers, Inc., and is based on the most recent Schedule
13G of such entities received by the Company, which reported such
ownership as of December 31, 2000. All shares beneficially held by such
entities and individual consist of Class A Common Stock (approximately
5.4% of the Class A Common Stock outstanding as of December 31, 2000).
The address of John Hancock Financial Services, Inc. is John Hancock
Place, P.O. Box 111, Boston, Massachusetts 02117.

(21) Information regarding the number of shares of Common Stock beneficially
owned by Nevis Capital includes shares beneficially owned by affiliates
Jon C. Baker and David R. Wilmerding, III, and is based on the most
recent Schedule 13G of such entity and individuals received by the
Company, which reported such ownership as of December 31, 2000. All
shares beneficially held by such entity and individuals consist of Class
A Common Stock (approximately 8.6% of the Class A Common Stock
outstanding as of December 31, 2000). The address of Nevis Capital is
1119 St. Paul Street, Baltimore, Maryland 21202.

Executive Officers of the Company

The Company's executive officers and their ages and positions as of May 31,
2001 are as follows:

Name Age Title
---- --- -----

Michael J. Saylor....... 36 Chairman and Chief Executive Officer
Sanju K. Bansal......... 35 Vice Chairman, Executive Vice President and Chief Operating Officer
Eric F. Brown........... 35 President and Chief Financial Officer
Jonathan F. Klein....... 34 Vice President, Law and General Counsel
Jeffrey A. Bedell....... 32 Vice President, Technology and Chief Technology Officer

Set forth below is certain information regarding the professional experience
of each of the above-named persons.

Michael J. Saylor has served as chief executive officer and chairman of the
Board of Directors since founding MicroStrategy in November 1989, and as
president from November 1989 to November 2000. Prior to that, Mr. Saylor was
employed by E.I. du Pont de Nemours & Company as a Venture Manager from 1988
to 1989 and by Federal Group, Inc. as a consultant from 1987 to 1988. Mr.
Saylor received an S.B. in Aeronautics and Astronautics and an S.B. in
Science, Technology and Society from the Massachusetts Institute of
Technology.

Sanju K. Bansal has served as executive vice president and chief operating
officer since 1993 and was previously vice president, consulting since joining
MicroStrategy in 1990. He has been a member of the Board of Directors of
MicroStrategy since September 1997 and has served as vice chairman since
November 2000. Prior to joining MicroStrategy, Mr. Bansal was a consultant at
Booz Allen & Hamilton, a worldwide technical and management consulting firm,
from 1987 to 1990. Mr. Bansal received an S.B. in Electrical Engineering from
the Massachusetts Institute of Technology and an M.S. in Computer Science from
The Johns Hopkins University.

Eric F. Brown has served as president since November 2000 and chief
financial officer since August 2000. Mr. Brown originally joined the Company
as chief financial officer of the Company's Strategy.com subsidiary in
February 2000. Prior to that, Mr. Brown served as division chief financial
officer and then chief operating officer of Electronic Arts from October 1998
until February 2000. Prior to that, Mr. Brown was co-founder and chief
financial officer of DataSage, Inc. from 1995 until October 1998. Mr. Brown
also held several senior financial positions with Grand Metropolitan from 1990
until 1995. Mr. Brown received his M.B.A. from the Sloan School of Management
of Massachusetts Institute of Technology and a B.S. in Chemistry from the
Massachusetts Institute of Technology.

Jonathan F. Klein has served as vice president, law and general counsel
since November 1998 and as corporate counsel from June 1997 to November 1998.
From September 1993 to June 1997, Mr. Klein was an appellate litigator with
the United States Department of Justice. Mr. Klein received a B.A. in
Economics from Amherst College and a J.D. from Harvard Law School.

Jeffrey A. Bedell has served as vice president, technology and chief
technology officer since April 2001 and was previously vice president,
platform technology since December 1999. From December 1992 to December 1999,
Mr. Bedell served as senior program manager and director of technology
programs with MicroStrategy. Mr. Bedell received a B.A. in Religion from
Dartmouth College.

PROPOSAL 1

ELECTION OF DIRECTORS

The persons named in the enclosed proxy will vote to elect as directors the
eight nominees named below, all of whom are presently directors of the
Company, unless authority to vote for the election of any or all of the
nominees is withheld by marking the proxy to that effect. All of the nominees
have indicated their willingness to serve, if elected, but if any should be
unable or unwilling to serve, proxies may be voted for a substitute nominee
designated by the Board of Directors. Each director will be elected to hold
office until the next annual meeting of stockholders (subject to the election
and qualification of his successor or to his earlier death, resignation or
removal).

Nominees

Set forth below, for each nominee, are his name and age, his positions with
the Company, his principal occupation and business experience during the past
five years and the year of the commencement of his term as a director of the
Company:

Michael J. Saylor (36) has served as chief executive officer and chairman of
the Board of Directors since founding MicroStrategy in November 1989, and as
president from November 1989 to November 2000. Prior to that, Mr. Saylor was
employed by E.I. du Pont de Nemours & Company as a Venture Manager from 1988
to 1989 and by Federal Group, Inc. as a consultant from 1987 to 1988. Mr.
Saylor received an S.B. in Aeronautics and Astronautics and an S.B. in
Science, Technology and Society from the Massachusetts Institute of
Technology.

Sanju K. Bansal (35) has served as executive vice president and chief
operating officer since 1993 and was previously vice president, consulting
since joining MicroStrategy in 1990. He has been a member of the Board of
Directors of MicroStrategy since September 1997 and has served as vice
chairman since November 2000. Prior to joining MicroStrategy, Mr. Bansal was a
consultant at Booz Allen & Hamilton, a worldwide technical and management
consulting firm, from 1987 to 1990. Mr. Bansal received an S.B. in Electrical
Engineering from the Massachusetts Institute of Technology and an M.S. in
Computer Science from The Johns Hopkins University.

F. David Fowler (67) has been a member of the Board of Directors of
MicroStrategy since June 2001. Mr. Fowler was the dean of the School of
Business and Public Management at The George Washington University from July
1992 until his retirement in June 1997 and a member of KPMG LLP from 1963
until his retirement in June 1992. As a member of KPMG, Mr. Fowler served as
managing partner of the Washington, DC office from 1987 until 1992, as partner
in charge of human resources for the firm in New York City, as a member of the
firm's board of directors, operating committee and strategic planning
committee and as chairman of the KPMG Foundation and the KPMG personnel
committee. Mr. Fowler currently serves as a member of the board of directors
for the mutual funds of FBR Funds and Rushmore Funds, both located in
Alexandria, Virginia. Mr. Fowler received a B.A./B.S. in Business from the
University of Missouri at Columbia in 1955.

Frank A. Ingari (51) has been a member of the Board of Directors of
MicroStrategy since October 1997. Mr. Ingari founded Wheelhouse Corporation, a
marketing infrastructure services provider, in April 1999 and served as its
chief executive officer from April 1999 until May 2000 and as its chairman of
the board from April 1999 until the present. Prior to Wheelhouse, Mr. Ingari
founded Growth Ally, LLC, a start-up consultancy dedicated to helping pre-
public technology companies accelerate their development, and served as its
president from November 1997 until April 1999. Mr. Ingari was chairman and
chief executive officer of Shiva Corporation from 1993 to 1997. Prior to
joining Shiva Corporation, Mr. Ingari was vice president of worldwide
marketing at Lotus Development Corporation. Mr. Ingari received a B.A. in
Creative Writing and U.S. Foreign Relations from Cornell University.

Jonathan J. Ledecky (43) has been a member of the Board of Directors of
MicroStrategy since June 1998. Mr. Ledecky is currently vice chairman of
Lincoln Holdings LLC, which owns the Washington Capitals, the Washington
Wizards and the Washington Mystics sports teams, and has served in this
position since July 1999. Mr. Ledecky founded U.S. Office Products Company in
October 1994 and served as its chairman of the board and chief executive
officer from inception through November 1997 and thereafter as a director
until May 1998.

In February 1997, Mr. Ledecky founded Building One Services Corp., now
Encompass Services Corporation, and served as its chairman until February 2000
and chief executive officer until June 1999. Mr. Ledecky is also a director of
publicly traded School Specialty, Inc.

Stuart B. Ross (64) has been a member of the Board of Directors of
MicroStrategy since June 2001. Mr. Ross held various positions with the Xerox
Corporation from 1966 until December 1999, including corporate executive vice
president, senior vice president of finance and chief financial officer, vice
president/corporate controller and chairman and chief executive officer of
Xerox Financial Services. Mr. Ross is currently a trustee for the Hansberger
Institutional Series, a mutual fund, an advisor to Fairfax Financial Holdings,
an insurance holding company, a member of the board of directors of The World
Affairs Forum and a member of the International Executive Service Corporation
Advisory Council. Mr. Ross received his B.S. in Accounting from New York
University in 1958 and his M.B.A. from Bernard Baruch College of the City
College of New York in 1966. Mr. Ross has been a C.P.A. in the State of New
York since 1963.

John W. Sidgmore (50) has been a member of the Board of Directors of
MicroStrategy since February 2000. Mr. Sidgmore is currently the vice chairman
of the board of directors of WorldCom, Inc., a provider of long distance,
Internet and telecommunications services, where he has served in such position
since December 1996. Mr. Sidgmore was the president and chief executive
officer of UUNET Technologies, Inc., a provider of worldwide Internet
services, from June 1994 until December 1996. Prior to joining UUNET, Mr.
Sidgmore was president and chief executive officer of Intelicom Solutions, now
CSC Intelicom, a telecommunications software company. Mr. Sidgmore is also a
member of the board of directors of WorldCom.

Ralph S. Terkowitz (50) has been a member of the Board of Directors of
MicroStrategy since September 1997. Mr. Terkowitz is currently chief
technology officer for The Washington Post Company, a position he has held
since April 2001. From 1992 until April 2001, Mr. Terkowitz was vice
president, technology for The Washington Post Company. Until February 1996,
Mr. Terkowitz was chief executive officer, president and publisher of Digital
Ink, an Internet publishing venture that launched, among other ventures,
WashingtonPost.com and PoliticsNow. In 1998, he was co-chief executive officer
of HireSystems and instrumental in the formation of BrassRing.com. Mr.
Terkowitz is a director of BigStep.com, OutTask and Moai. Mr. Terkowitz
received an A.B. in Chemistry from Cornell University and an M.S. in Chemical
Physics from the University of California, Berkeley.

Involvement in Certain Legal Proceedings

On December 14, 2000, Mr. Saylor and Mr. Bansal each entered into a
settlement with the Securities and Exchange Commission ("SEC") in connection
with the Company's restatement of its financial results for 1999, 1998 and
1997. In the settlement, each of Mr. Saylor and Mr. Bansal consented, without
admitting or denying the allegations in the SEC's complaint, to the entry of a
judgment enjoining him from violating the antifraud and recordkeeping
provisions of the federal securities laws and ordering him to pay a civil
penalty and disgorge certain profits.

Board and Committee Meetings

The Company has a standing Audit Committee of the Board of Directors, which
provides the opportunity for direct contact between the Company's independent
auditors and the Board of Directors. The Audit Committee met ten times during
Fiscal Year 2000. During Fiscal Year 2000 and until June 2001, the Audit
Committee members were Mr. Ingari and Mr. Terkowitz. In June 2001, Mr. Fowler
and Mr. Ross were appointed to the Audit Committee and Mr. Ingari discontinued
his committee membership. The current members of the Audit Committee are Mr.
Fowler, Mr. Ross and Mr. Terkowitz.

The Company has a standing Compensation Committee of the Board of Directors,
which makes compensation decisions regarding the officers of the Company and
provides recommendations to the Board of Directors regarding compensation
programs of the Company. The Compensation Committee met once during Fiscal
Year 2000. The current members of the Compensation Committee are Mr. Terkowitz
and Mr. Ingari.

The Board of Directors met thirteen times during Fiscal Year 2000. Each
director attended at least 75% of the number of Board of Directors meetings
and the number of meetings held by all committees on which he then served.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's Class A Common Stock to file with
the SEC initial reports of ownership of the Company's Class A Common Stock and
other equity securities on a Form 3 and reports of changes in such ownership
on a Form 4 or Form 5. Officers, directors and holders of 10% of the Company's
Class A Common Stock are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file. To the Company's knowledge,
based solely on a review of the Company's records, all Section 16(a) filing
requirements were satisfied with respect to Fiscal Year 2000 except that (i)
one Form 4 that was timely filed by Michael J. Saylor to report a series of
gift transactions included four share conversions by Mr. Saylor that were
reportable in two prior months in connection with those gift transactions, and
(ii) one Form 4 filed by Stephen S. Trundle included a sale of shares by his
spouse that was inadvertently omitted from a prior reporting period.

Directors' Compensation

Directors do not receive any fees or other cash compensation for serving on
the Company's Board of Directors or any committee thereof. Directors of the
Company who are not employees of the Company or any subsidiary ("Outside
Directors") are entitled to receive options to purchase shares of the
Company's Class A Common Stock.

In 2000, options for 120,000 shares of Class A Common Stock were granted to
Outside Directors under the 1997 Director Option Plan. Subsequent to 2000, the
Company will grant options to Outside Directors under the 1999 Stock Option
Plan. Pursuant to this plan, Outside Directors are granted options on the
following terms: (i) each new Outside Director of the Company is granted an
option to purchase 100,000 shares of Class A Common Stock upon his or her
initial election or appointment to the Board of Directors ("First Options")
and (ii) each Outside Director is granted an option to purchase 30,000 shares
of Class A Common Stock on the day immediately following each annual meeting
of stockholders ("Subsequent Options"). Each option granted to an Outside
Director under the 1999 Stock Option Plan has an exercise price equal to the
last reported sale price of Class A Common Stock as reported on the Nasdaq
National Market for the most recent trading day prior to the date of grant.
First Options granted under the 1999 Stock Option Plan become exercisable in
equal annual installments over a five-year period and Subsequent Options are
exercisable in full upon grant. In the event of a merger of the Company with
or into another corporation or another qualifying acquisition event, each
option will be assumed or an equivalent option will be substituted by the
successor corporation. If the successor corporation does not assume
outstanding options or such options are not otherwise exchanged, the
exercisability of all outstanding options will accelerate.

Executive Compensation

The compensation information set forth below relates to compensation paid by
the Company to its Chief Executive Officer, the Company's four other most
highly compensated executive officers who were serving as executive officers
of the Company as of December 31, 2000, and the two other most highly
compensated executive officers who served as executive officers during the
Fiscal Year 2000, but who were not serving as executive officers at the end of
Fiscal Year 2000 (collectively, the "Named Executive Officers").

Option awards relating to the Class A Common Stock of Strategy.com
Incorporated, a majority-owned subsidiary of the Company ("Strategy.com"), are
designated in the tables set forth below by the term "SDC." Unless so
designated, all option information set forth below refers to option awards
relating to the Class A Common Stock of the Company.

The following table sets forth certain information concerning the
compensation of the Named Executive Officers for each of the last three fiscal
years:

SUMMARY COMPENSATION TABLE

Long-Term
Compensation
Annual Compensation Awards
----------------------------- ------------
Number of
Shares
Name and Principal Fiscal Other Annual Underlying
Position Year Salary Bonus Compensation Options
------------------ ------ -------- ------- ------------ ------------

Michael J. Saylor........ 2000 $150,000 $ -- $ -- --
Chairman of the Board and
Chief Executive Officer 1999 150,000 50,000 -- --
1998 127,500 -- -- --

Sanju K. Bansal.......... 2000 115,000 -- -- --
Vice Chairman of the
Board, Executive Vice 1999 115,000 40,000 -- --
President and Chief
Operating Officer 1998 115,000 -- -- --

Eric F. Brown(1)......... 2000 131,250 10,000 96,962(2) 500,000
President and Chief
Financial Officer 100,000 (SDC)
1999 -- -- -- --
1998 -- -- -- --

Jonathan F. Klein........ 2000 135,417 60,000 -- 75,000
Vice President, Law and
General Counsel 75,000 (SDC)
1999 115,000 30,000 -- 30,000
1998 91,500 15,000 -- 80,500

Stephen S. Trundle(3).... 2000 125,000 -- -- 125,000
Vice President,
Technology and Chief
Technology 150,000 (SDC)
Officer 1999 125,000 -- -- 100,000
1998 115,000 20,000 -- --

Eric D. Driscoll(4)...... 2000 153,750 72,365 -- 125,661
Vice President, Corporate
Development 50,000 (SDC)
1999 -- -- -- 10,000
1998 -- -- -- --

Joseph P. Payne(5)....... 2000 175,000 75,000 -- 75,000
Vice President, Marketing
and Chief Marketing 50,000 (SDC)
Officer 1999 121,307 15,000 -- 250,000
1998 -- -- -- --

--------
(1) Mr. Brown joined the Company in February 2000 as Chief Financial Officer
of Strategy.com, a business unit of the Company at the time, and became
Chief Financial Officer and President of the Company on August 1, 2000
and November 14, 2000, respectively. Accordingly, the 2000 information
for Mr. Brown is for the period from February 2000 to December 31, 2000,
and there is no information for 1999 and 1998.

(2) This amount represents relocation expenses paid by the Company.

(3) Mr. Trundle resigned from the Company on April 10, 2001.

(4) Mr. Driscoll became the Company's Vice President, Corporate Development
in June 2000. From March 1999 until June 2000, Mr. Driscoll was Vice
President, Americas Consulting and from October 1998 until March 1999 was
Director, North American Consulting. The information in the table for Mr.
Driscoll reflects the aggregate compensation received during 2000 as an
employee of MicroStrategy Services Corporation and as an employee of the
Company. Mr. Driscoll did not serve as an executive officer of the
Company during 1999 or 1998. Mr. Driscoll ceased serving in the capacity
of an executive officer of the Company on November 29, 2000.

(5) Mr. Payne joined the Company in April 1999 as Vice President, Marketing
and Chief Marketing Officer. Accordingly, the 1999 information for Mr.
Payne is for the period from April 22, 1999 to December 31, 1999, and
there is no information for 1998. Mr. Payne ceased serving in the capacity
of an executive officer of the Company on November 29, 2000 and resigned
from the Company on February 28, 2001.

Option Grants Table

The following table contains information concerning grants of stock options
made to each of the Named Executive Officers during Fiscal Year 2000:

OPTION GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS

Potential Realizable
Number of Value at Assumed
Shares of Annual Rates of
Class A % of Stock
Common Stock Total Options Price Appreciation
Underlying Granted to Exercise for Option Term(3)
Options Employees Price Per Expiration --------------------
Name Granted(1) in 2000 Share(2) Date 5% 10%
---- ------------ ------------- --------- ---------- --------- ----------

Michael J. Saylor....... -- -- % $ -- -- $ -- $ --

Sanju K. Bansal......... -- -- -- -- -- --

Eric F. Brown........... 500,000 6.504 21.000 8/21/2010 6,603,394 16,734,296
100,000 (SDC) 2.124 2.750 12/20/2010 172,946 438,279

Jonathan F. Klein....... 50,000 0.650 23.625 9/27/2010 742,882 1,882,608
25,000 0.325 21.500 10/17/2010 338,031 856,637
75,000 (SDC) 1.593 2.750 12/20/2010 129,710 328,709

Stephen S. Trundle...... 50,000 0.650 44.125 6/09/2010 1,387,499 3,516,194
75,000 0.976 21.500 10/17/2010 1,014,093 2,569,910
150,000 (SDC) 3.186 2.750 12/20/2010 259,419 657,419

Eric D. Driscoll........ 661 0.009 17.938 5/30/2010 7,457 18,897
75,000 0.976 39.313 6/16/2010 1,854,280 4,699,110
50,000 0.650 21.500 10/17/2010 676,062 1,713,273
50,000 (SDC) 1.062 2.750 12/20/2010 86,473 219,140

Joseph P. Payne......... 50,000 0.650 23.625 9/27/2010 742,882 1,882,608
25,000 0.325 21.500 10/17/2010 338,031 856,637
50,000 (SDC) 1.062 2.750 12/20/2010 86,473 219,140

--------

(1) These options generally vest over a five-year period and expire on the
tenth anniversary of the date of grant. SDC options, irrespective of
vesting, are not exercisable until the earlier of an underwritten initial
public offering of SDC, the closing of an acquisition transaction
resulting in a change of control of SDC or sixty months from the date of
grant.

(2) The exercise price of options of the Company or SDC may be paid in cash or
in shares of Class A Common Stock of the Company or SDC, as the case may
be, valued at fair market value on the exercise date. All stock options
were granted with an exercise price equal to the fair market value of such
stock as determined by the Board of Directors of the Company or SDC, as
applicable, on the grant date.

(3) The potential realizable value is calculated based on the term of the
option at its time of grant (ten years). It is calculated assuming that
the fair market value of the Class A Common Stock of the Company or of
SDC, as the case may be, on the date of grant appreciates at the indicated
annual rate compounded annually for the entire term of the option and that
the option is exercised and sold on the last day of its term for the
appreciated stock price.

Option Exercises and Holdings

The following table sets forth information concerning each exercise of a
stock option during Fiscal Year 2000 by each of the Named Executive Officers
and the number and value of unexercised options held by each of the Named
Executive Officers on December 31, 2000.

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

Number of Shares of
Class A Common Stock Value of Unexercised
Number of Underlying Unexercised In-the-Money Options
Shares Options at Fiscal Year-End at Fiscal Year-End(2)
Acquired Value -------------------------- -------------------------
Name on Exercise Realized(1) Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- ----------- -------------------------- -------------------------

Michael J. Saylor....... -- $ -- --/-- $ --/$--

Sanju K. Bansal......... -- -- --/-- --/--

Eric F. Brown........... -- -- 0/500,000 --/--
0/100,000 (SDC) --/--

Jonathan F. Klein....... 20,000 2,049,000 10,200/155,300 35,270/429,905
0/75,000 (SDC) --/--

Stephen S. Trundle...... 100,000 16,025,000 81,600/245,400 569,800/373,700
0/150,000 (SDC) --/--

Eric D. Driscoll........ 10,000 318,750 2,000/153,661 0/170,000
0/50,000 (SDC) --/--

Joseph P. Payne......... 20,000 380,000 30,000/275,000 18,750/125,000
0/50,000 (SDC) --/--

--------
(1) Represents the difference between the exercise price and the fair market
value of the Class A Common Stock of the Company on the date of exercise.
(2) Value of unexercised options is determined by subtracting the exercise
price per share from the fair market value per share for the underlying
shares as of December 31, 2000, multiplied by the number of shares
underlying the options. The fair market value of the Company's Class A
Common Stock is based upon the last reported sale price as reported on the
Nasdaq National Market on December 31, 2000 ($9.50 per share). No public
market for the shares underlying the SDC options existed as of December
31, 2000, and accordingly no value in excess of the exercise price has
been attributed to these options.

Employment Agreements

Employees of the Company, including the Company's executive officers, are
generally required to enter into confidentiality agreements prohibiting the
employees from disclosing any confidential or proprietary information of the
Company. In addition, the agreements generally provide that upon termination,
an employee will not provide competitive products or services and will not
solicit Company customers and employees for a period of one year. At the time
of commencement of employment, the Company's employees also generally sign
offer letters specifying certain basic terms and conditions of employment.
Otherwise, employees of the Company are generally not subject to written
employment agreements.

Compensation Committee Interlocks and Insider Participation

As discussed below under "Certain Relationships and Related Transactions,"
Wheelhouse Corporation, a company for which Frank A. Ingari, a director and a
member of the Compensation Committee of the Company, is a founding stockholder
and chairman of the board of directors, paid the Company in Fiscal Year 2000
an

aggregate of $374,363 relating to license and support fees and education
services under a business alliance agreement between the Company and
Wheelhouse. Also during Fiscal Year 2000, the Company paid Wheelhouse an
aggregate of $86,274 for consulting services which were unrelated to the
business alliance agreement.

Certain Relationships and Related Transactions

Michael J. Saylor and Sanju K. Bansal were named as defendants in a class
action lawsuit and shareholder derivative action and were subjects of an SEC
investigation, discussed under "Involvement in Certain Legal Proceedings"
above, relating to the restatement of the Company's financial results for
1999, 1998 and 1997. Mr. Saylor and Mr. Bansal each retained separate legal
counsel to defend their individual interests in these legal proceedings. Using
a portion of the proceeds that the Company received from insurance in
connection with those proceedings, the Company paid the legal fees of such
separate counsel in the amounts of $1,009,360 and $334,553 on behalf of Mr.
Saylor and Mr. Bansal, respectively, during 2000.

On December 30, 1999, the Company entered into a business alliance agreement
with Wheelhouse Corporation, a company for which Frank A. Ingari, a director
and a member of the Compensation Committee of the Company, is a founding
stockholder and chairman of the board of directors. Pursuant to the agreement,
Wheelhouse acquired from the Company certain development software and training
technology and the right to offer Company products in the marketplace as a
sales agent. In addition, Wheelhouse is entitled to a finders fee of 1.5% of
the license fees paid to the Company by any company referred to the Company by
Wheelhouse. During Fiscal Year 2000, Wheelhouse paid an aggregate of $374,363
to the Company relating to license and support fees and education services in
connection with the development software acquired from the Company under the
agreement. Also during Fiscal Year 2000, the Company paid Wheelhouse an
aggregate of $86,274 for consulting services which were unrelated to the
business alliance agreement.

AUDIT COMMITTEE REPORT

The Audit Committee of the Company's Board of Directors acts under a written
charter first adopted and approved on September 15, 1997 and amended on July
3, 2000. A copy of this charter is attached to this proxy statement as
Appendix A. During Fiscal Year 2000 and until June 2001, the members of the
Audit Committee were Mr. Ingari and Mr. Terkowitz. In June 2001, Mr. Fowler
and Mr. Ross were appointed to the Audit Committee and Mr. Ingari discontinued
his committee membership. The current members of the Audit Committee are Mr.
Fowler, Mr. Ross and Mr. Terkowitz. The members of the Audit Committee are
independent directors, as defined by its charter and the rules of the Nasdaq
Stock Market.

The Audit Committee reviewed the Company's audited financial statements for
Fiscal Year 2000 and discussed these financial statements with the Company's
management. Management is responsible for the Company's internal controls and
the financial reporting process. The Company's independent auditors are
responsible for performing an independent audit of the Company's financial
statements in accordance with auditing standards generally accepted in the
United States of America and to issue a report on those financial statements.
The Audit Committee is responsible for monitoring and overseeing these
processes. As appropriate, the Audit Committee reviews and evaluates, and
discusses with the Company's management, internal accounting, financial and
auditing personnel and the independent auditors, the following:

. the plan for, and the independent auditors' report on, each audit of the
Company's financial statements;

. the Company's financial disclosure documents, including all financial
statements and reports filed with the Securities and Exchange Commission
or sent to shareholders;

. changes in the Company's accounting practices, principles, controls or
methodologies;

. significant developments or changes in accounting rules applicable to
the Company; and

. the adequacy of the Company's internal controls and accounting,
financial and auditing personnel.

The Audit Committee and management have discussed the Company's internal
audit approach; the relationship among the Internal Audit Director, the Audit
Committee and management; and the Audit

Committee's support for internal audit personnel. In addition, through
periodic meetings during 2000 and the first quarter of 2001, the Audit
Committee discussed the following significant items with management and the
Company's independent auditors: material revenue contracts, financing
transactions, the restatement of prior period financial results, the Company's
restructuring during 2000, development of comprehensive accounting and
contracts policy and procedure manuals, and development of an annual internal
audit plan in connection with the hiring of an Internal Audit Director.

Management represented to the Audit Committee that the Company's financial
statements had been prepared in accordance with accounting principles
generally accepted in the United States of America.

The Audit Committee also reviewed and discussed the audited financial
statements and the matters required by Statement on Auditing Standards 61
(Communication with Audit Committees) with PricewaterhouseCoopers LLP, the
Company's independent auditors. SAS 61 requires the Company's independent
auditors to discuss with the Company's Audit Committee, among other things,
the following:

. methods to account for significant unusual transactions;

. the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative guidance or
consensus;

. the process used by management in formulating particularly sensitive
accounting estimates and the basis for the auditors' conclusions
regarding the reasonableness of those estimates; and

. disagreements, if any, with management over the application of
accounting principles, the basis for management's accounting estimates
and the disclosures in the financial statements.

The Company's independent auditors also provided the Audit Committee with
the written disclosures and the letter required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees).
Independence Standards Board Standard No. 1 requires auditors to disclose
annually in writing all relationships that in the auditor's professional
opinion may reasonably be thought to bear on independence, confirm their
perceived independence and engage in a discussion of independence. In
addition, the Audit Committee discussed with the independent auditors their
independence from the Company. The Audit Committee also considered whether the
independent auditors' provision of the other, non-audit related services to
the Company, which are referred to below under the caption "Independent
Auditors Fees and Other Matters", is compatible with maintaining such
auditors' independence.

Based on its discussions with management and the Company's independent
auditors as well as its review of the representations and information provided
by management and the independent auditors, the Audit Committee recommended to
the Company's Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000.

By the Audit Committee of the Board of Directors of MicroStrategy
Incorporated.

Frank A. Ingari(/1/)
Ralph S. Terkowitz

(/1/Mr.)Ingari discontinued his membership on the Audit Committee following
the appointment of Messrs. Fowler and Ross to the Audit Committee in June
2001. Messrs. Fowler and Ross did not participate in the preparation of
this Audit Committee Report.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

This report addresses the compensation policies of the Company applicable to
its executive officers during Fiscal Year 2000. The Company's executive
compensation program is administered by the Compensation Committee of the
Board of Directors (the "Committee"), which is comprised of two non-employee
directors. The Committee is responsible for determining the compensation
package of each executive officer, including the Chief Executive Officer.

Executive Compensation Policy

The objectives of the Committee in determining executive compensation are
(i) to recognize and reward exceptional performance by the Company's
executives, (ii) to provide incentives for high levels of current and future
performance, and (iii) to align the objectives and rewards of Company
executives with those of the stockholders of the Company. The Committee
believes that an executive compensation program that achieves these objectives
will not only properly motivate and compensate the Company's current officers,
but will enable the Company to attract other officers that may be needed by
the Company in the future. The executive compensation program is implemented
through three principal elements--base salary, bonus and stock option grants.

Executive Officer Compensation

In setting base salaries for Fiscal Year 2000, the Committee used a
subjective evaluation process considering the performance of the Company, the
officer's position, level and scope of responsibility, as well as the
recommendations of management with respect to base salary for such executive
officer. The Committee also generally sought to set salaries at levels that,
in the opinion of the members of the Committee, approximate the salary levels
for executives of companies that are comparable to the Company, except in the
case of the Chief Executive Officer as described below.

Bonuses are awarded principally on the basis of the Company's performance
during the period and on the Committee's assessment of the extent to which the
executive officer contributed to the overall performance of the Company or a
particular department of the Company for a specific period. In awarding
performance-based bonuses for Fiscal Year 2000, the Committee sought to set
such bonuses at a level that would provide executive officers eligible to
receive such bonuses with a strong incentive to contribute to the success and
profitability of the Company. During Fiscal Year 2000, a total of $217,365 was
paid in bonuses to seven executive officers of the Company.

In a further attempt to link compensation to the long-term performance of
the Company, stock options to purchase Class A Common Stock of the Company and
Class A Common Stock of Strategy.com Incorporated, a majority-owned subsidiary
of the Company, were awarded to certain executive officers. In Fiscal Year
2000, option awards were made based principally on the recommendations of
management. All of the options to purchase Class A Common Stock of the Company
were granted under the 1999 Stock Option Plan in Fiscal Year 2000 with an
exercise price that was equal to the fair market value of the Class A Common
Stock on the option grant date. All of the options to purchase Class A Common
Stock of Strategy.com were granted under the 2000 Stock Option Plan of
Strategy.com with an exercise price equal to the fair market value of the
Class A Common Stock on the option grant date as determined by the board of
directors of Strategy.com. Generally, the options granted to executive
officers under the 1999 Stock Option Plan and the Strategy.com 2000 Stock
Option Plan vest ratably over a four to five-year period; provided, however,
that Strategy.com options, irrespective of vesting, are not exercisable until
the earlier of an underwritten initial public offering of Strategy.com, the
closing of an acquisition transaction resulting in a change of control of
Strategy.com or sixty months from the date of grant. During Fiscal Year 2000,
options to purchase an aggregate of 900,661 shares of the Company's Class A
Common Stock and 425,000 shares of Strategy.com's Class A Common Stock were
granted to seven executive officers of the Company.

Chief Executive Officer Compensation

The Committee believes that the base salary and bonus paid to Mr. Saylor in
Fiscal Year 2000 were justified in light of the significant and material
contributions of Mr. Saylor to the day-to-day business operations of the

Company and to the implementation of several strategic initiatives, including
completion of additional Company financing transactions, a corporate
restructuring to better align the Company's costs with its revenues, an equity
financing of Strategy.com in 2000 and the roll out of the MicroStrategy 7
software platform. The Committee did not make any stock option or other stock-
based incentive awards to Mr. Saylor during Fiscal Year 2000. In the view of
the Committee, Mr. Saylor's base salary and bonus are below the base salary
and bonuses generally awarded by comparable companies to their chief executive
officers. The Committee determined that, given Mr. Saylor's substantial
beneficial ownership of the Company's Common Stock, his long-term interests in
the performance and profitability of the Company are aligned with those of
other stockholders and, accordingly, no additional financial or stock-based
incentives were warranted.

Section 162(m) of the Internal Revenue Code

Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to its chief executive officer and its four other most highly compensated
executive officers. However, qualifying performance-based compensation will
not be subject to the deduction limit if certain requirements are met. The
Committee takes into account, to the extent it believes appropriate, the
limitations on the deductibility of executive compensation imposed by Section
162(m) in determining compensation levels and practices.

By the Compensation Committee of the Board of Directors of MicroStrategy
Incorporated.

Ralph S. Terkowitz
Frank A. Ingari

STOCK PERFORMANCE GRAPH

The following graph compares the cumulative total stockholder return on the
Class A Common Stock of the Company from June 11, 1998 (the date the Company's
shares of Class A Common Stock were first offered to the public) to December
31, 2000 (the end of Fiscal Year 2000) with the cumulative total return of (i)
the CRSP Total Return Index for the Nasdaq National Market (U.S. Companies)
(the "Nasdaq Index") and (ii) a peer group of companies consisting of Business
Objects, Cognos, Inc., Brio Technology, Inc. and Actuate Software Corporation
(the "Peer Index"). This graph assumes the investment of $100.00 on June 11,
1998 in the Company's Class A Common Stock, the Nasdaq Index and the Peer
Index, and assumes any dividends are reinvested. Measurement points are June
11, 1998, December 31, 1998, December 31, 1999 and December 31, 2000.

[GRAPH]

Comparison of Cumulative Total Return
Assumes Initial Investment of $100

6/11/98 12/31/98 12/31/99 12/31/00

MicroStrategy Incorporated $100 $262.50 $1,750.00 $158.34
Nadaq Index $100 $125.00 $ 233.17 $140.29
Peer Index $100 $116.55 $ 327.06 $235.86

PROPOSAL 2

TO APPROVE THE AMENDED AND RESTATED 1999 STOCK OPTION PLAN TO INCREASE THE
NUMBER OF SHARES OF CLASS A COMMON STOCK RESERVED FOR ISSUANCE UNDER THE PLAN
FROM 11,000,000 TO 23,500,000 SHARES.

Introduction

A proposal will be presented at the Annual Meeting that the stockholders
approve the Company's Amended and Restated 1999 Stock Option Plan (the "1999
Plan") to increase the number of shares of Class A Common Stock reserved for
issuance under the plan from 11,000,000 to 23,500,000 shares (subject to a
proportionate adjustment for certain changes in the Company's capitalization,
such as a stock split). The proposed increase in the number of shares
available for grant under the 1999 Plan requires the approval by the
affirmative vote of a majority of the votes cast by the holders of Common
Stock present, or represented, and entitled to vote at the Annual Meeting.

As of April 20, 2001, the Company had granted options to purchase 17,046,204
shares of Class A Common Stock under the 1999 Plan. Of such option grants,
options for 10,577,329 shares were made subject to stockholder approval of the
increase in the number of shares available under the 1999 Plan. On December
21, 2000 and April 17, 2001, the Board of Directors adopted, subject to
stockholder approval, the proposed aggregate increase in the number of shares
available for issuance under the 1999 Plan to ensure that the Company will
have a sufficient number of shares of Class A Common Stock available under the
1999 Plan to continue to provide option grants to attract, retain and motivate
personnel.

Description of the 1999 Plan

The following is a brief summary of the 1999 Plan. The following summary is
qualified in its entirety by the 1999 Plan.

Types of Awards

The 1999 Plan provides for the grant of incentive stock options intended to
qualify as such under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), and non-statutory stock options (collectively,
"Awards").

Incentive Stock Options and Non-statutory Stock Options.

Optionees receive the right to purchase a specified number of shares of
Class A Common Stock at a specified option price and subject to such other
terms and conditions as are specified in connection with the option grant.
Options may be granted at an exercise price which may be less than, equal to
or greater than 100% of the fair market value of the Class A Common Stock on
the date of grant. Under present law, however, incentive stock options and
options intended to qualify as performance-based compensation under Section
162(m) of the Code may not be granted at an exercise price less than the fair
market value of the Class A Common Stock on the date of grant (or less than
110% of the fair market value in the case of incentive stock options granted
to optionees holding more than 10% of the total combined voting power of the
Company or of any parent or subsidiary corporation). The 1999 Plan permits the
following forms of payment of the exercise price of options: (i) payment by
cash, check, or in connection with a "cashless exercise" through a broker,
(ii) surrender to the Company of shares of Class A Common Stock, (iii)
delivery to the Company of a promissory note, or (iv) by any other lawful
means.

Eligibility to Receive Awards

Officers, employees, directors, consultants and advisors (and any
individuals who have accepted an offer of employment) of the Company and its
subsidiaries are eligible to be granted Awards under the 1999 Plan. Under
present law, however, incentive stock options may only be granted to employees
of the Company and its

subsidiaries. The maximum number of shares with respect to which Awards may be
granted to any participant under the 1999 Plan is 1,000,000 shares per
calendar year.

Plan Benefits

As of April 20, 2001, approximately 1,404 persons were eligible to receive
Awards under the 1999 Plan, including the Company's five executive officers.
The granting of Awards under the 1999 Plan is discretionary, and the Company
cannot now determine the number or type of Awards to be granted in the future
to any particular person or group. On April 20, 2001, the last reported sale
price of the Company's Class A Common Stock on the Nasdaq National Market was
$5.64.

Administration

The 1999 Plan is administered by the Board of Directors. The Board of
Directors has the authority to adopt, amend and repeal the administrative
rules, guidelines and practices relating to the 1999 Plan and to interpret the
provisions of the 1999 Plan. Pursuant to the terms of the 1999 Plan, the Board
of Directors may delegate authority under the 1999 Plan to one or more
committees of the Board of Directors, and subject to certain limitations, to
one or more executive officers of the Company. The Board of Directors has
authorized the Compensation Committee to administer certain aspects of the
1999 Plan, including the granting of options to executive officers, and has
also authorized an Option Committee of the Board of Directors, consisting of
Mr. Saylor, to grant options subject to certain limitations set by the Board
of Directors. Subject to any applicable limitations contained in the 1999
Plan, the Board of Directors, the Compensation Committee, the Option
Committee, or any other committee or executive officer to whom the Board of
Directors delegates authority, as the case may be, selects the recipients of
Awards and determines (i) the number of shares of Class A Common Stock covered
by options and the dates upon which such options become exercisable, (ii) the
exercise price of options and (iii) the duration of options.

The Board of Directors is required to make appropriate adjustments in
connection with the 1999 Plan and any outstanding Awards to reflect stock
dividends, stock splits and certain other events. In the event of a merger or
other Acquisition Event (as defined in the 1999 Plan), the Board of Directors
must provide for outstanding options to be assumed, or substituted for, by the
acquiring or succeeding corporation. In the event that the acquiring or
succeeding corporation does not agree to assume, or substitute for, such
options, the exercisability of all outstanding options will accelerate. In
certain circumstances, the Board of Directors may also provide for a cash out
of the value of any outstanding options. If any Award expires or is
terminated, surrendered, canceled or forfeited, the unused shares of Class A
Common Stock covered by such Award will again be available for grant under the
1999 Plan subject, however, to any limitations under the Code.

Amendment or Termination

No Award may be made under the 1999 Plan on or after April 21, 2009, but
Awards previously granted may extend beyond that date. The Board of Directors
may at any time amend, suspend or terminate the 1999 Plan, except that no
Award designated as subject to Section 162(m) of the Code by the Board of
Directors after the date of such amendment shall become exercisable,
realizable or vested (to the extent such amendment was required to grant such
Award) unless and until such amendment shall have been approved by the
Company's stockholders.

Federal Income Tax Consequences

The following is a summary of the United States federal income tax
consequences that generally will arise with respect to Awards granted under
the 1999 Plan and with respect to the sale of Class A Common Stock acquired
under the 1999 Plan. This summary is based on the federal tax laws in effect
as of the date of this proxy statement. Changes to the laws could alter the
tax consequences described below.

Incentive Stock Options

In general, a participant will not recognize taxable income upon the grant
or exercise of an incentive stock option. Instead, a participant will
recognize taxable income with respect to an incentive stock option only upon
the sale of Class A Common Stock acquired through the exercise of the option
("ISO Stock"). The exercise of an incentive stock option, however, may subject
the participant to the alternative minimum tax.

Generally, the tax consequences of selling ISO Stock will vary with the
length of time that the participant has owned the ISO Stock at the time it is
sold. If the participant sells ISO Stock after having owned it for more than
two years from the date the option was granted (the "Grant Date") and one year
from the date the option was exercised (the "Exercise Date"), then the
participant will recognize long-term capital gain in an amount equal to the
excess of the sale price of the ISO Stock over the exercise price.

If the participant sells ISO Stock for more than the exercise price prior to
having owned it for more than two years from the Grant Date and one year from
the Exercise Date (a "Disqualifying Disposition"), then all or a portion of
the gain recognized by the participant will be ordinary compensation income
and the remaining gain, if any, will be a capital gain. This capital gain will
be a long-term capital gain if the participant has held the ISO Stock for more
than one year prior to the date of sale.

If a participant sells ISO Stock for less than the exercise price, then the
participant will recognize capital loss in an amount equal to the excess of
the exercise price over the sale price of the ISO Stock. This capital loss
will be a long-term capital loss if the participant has held the ISO Stock for
more than one year prior to the date of sale.

Non-statutory Stock Options

As in the case of an incentive stock option, a participant will not
recognize taxable income upon the grant of a non-statutory stock option.
Unlike the case of an incentive stock option, however, a participant who
exercises a non-statutory stock option generally will recognize ordinary
compensation income in an amount equal to the excess of the fair market value
of the Class A Common Stock acquired through the exercise of the option ("NSO
Stock") on the Exercise Date over the exercise price.

With respect to any NSO Stock, a participant will have a tax basis equal to
the exercise price plus any income recognized upon the exercise of the option.
Upon selling NSO Stock, a participant generally will recognize capital gain or
loss in an amount equal to the difference between the sale price of the NSO
Stock and the participant's tax basis in the NSO Stock. This capital gain or
loss will be a long-term gain or loss if the participant has held the NSO
Stock for more than one year prior to the date of the sale.

Tax Consequences to the Company

The grant of an Award under the 1999 Plan generally will have no tax
consequences to the Company. Moreover, in general, neither the exercise of an
incentive stock option nor the sale of any Class A Common Stock acquired under
the 1999 Plan will have any tax consequences to the Company. However, the
Company generally will be entitled to a business-expense deduction with
respect to any ordinary compensation income recognized by a participant under
the 1999 Plan, including as a result of the exercise of a non-statutory stock
option or a Disqualifying Disposition. Any such deduction will be subject to
the limitations of Section 162(m) of the Code.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDED AND
RESTATED 1999 STOCK OPTION PLAN.

PROPOSAL 3

TO APPROVE THE AMENDED AND RESTATED 1997 STOCK OPTION PLAN FOR
FRENCH EMPLOYEES TO INCREASE THE NUMBER OF SHARES OF CLASS A COMMON STOCK
RESERVED FOR ISSUANCE UNDER THE PLAN FROM 600,000 TO 800,000 SHARES.

Introduction

A proposal will be presented at the Annual Meeting that the stockholders
approve the Company's Amended and Restated 1997 Stock Option Plan for French
Employees (the "1997 French Plan") to increase the number of shares of Class A
Common Stock reserved for issuance under the plan from 600,000 to 800,000
shares (subject to a proportionate adjustment for certain changes in the
Company's capitalization, such as a stock split). The proposed increase in the
number of shares available for grant under the 1997 French Plan requires the
approval by the affirmative vote of a majority of the votes cast by the
holders of Common Stock present, or represented, and entitled to vote at the
Annual Meeting.

As of April 20, 2001, options to purchase 304,486 shares of the 600,000
shares currently authorized under the 1997 French Plan were outstanding. On
April 17, 2001, the Board of Directors adopted, subject to stockholder
approval, the proposed increase in the number of shares available for issuance
under the 1997 French Plan to ensure that the Company will have a sufficient
number of shares of Class A Common Stock available under the 1997 French Plan
to continue to provide option grants to attract, retain and motivate French
personnel.

Description of the 1997 French Plan

The following is a brief summary of the 1997 French Plan. The following
summary is qualified in its entirety by the 1997 French Plan.

The 1997 French Plan provides for the grant to employees of a subsidiary of
the Company located in the Republic of France of options to purchase up to
800,000 shares of Class A Common Stock, subject to stockholder approval. The
Board of Directors, as the administrator of the 1997 French Plan, has the
absolute discretion to determine the level of and terms and conditions of
stock option awards consistent with the 1997 French Plan. Pursuant to the
terms of the 1997 French Plan, the Board of Directors may delegate authority
under the 1997 French Plan to one or more committees of the Board of
Directors. The Board of Directors has authorized the Compensation Committee to
administer certain aspects of the 1997 French Plan, including the granting of
options to executive officers, and has also authorized an Option Committee of
the Board of Directors, consisting of Mr. Saylor, to grant options, subject to
certain limitations set by the Board of Directors. The 1997 French Plan allows
for the grant of options which are exercisable at not less than 100% of the
fair market value of the Class A Common Stock on the date of grant.

Awards Under the 1997 French Plan

The 1997 French Plan provides that the Administrator (as defined below under
"Administration") may determine which employees are granted options to
purchase Class A Common Stock. The Administrator may also determine the number
of shares to be subject to, and the terms and conditions of, such options
consistent with the 1997 French Plan. In addition, the Administrator may
impose such conditions on the grant of such options as it deems appropriate.

Each option is evidenced by a written stock option agreement executed by the
Company and the optionee. At the time an option is granted, the Administrator
will determine the terms and conditions to be satisfied before shares shall be
deemed vested, as well as the dates on which the option shall be exercisable.

Payment for Shares

Options that are vested may be exercised in whole or in part, but an option
may not be exercised for a fraction of a share. The Administrator determines
the acceptable form of consideration for exercising an option, including the
method of payment. Such consideration may consist of (i) cash or check
(denominated in U.S. dollars); (ii) wire transfer (denominated in U.S.
dollars); (iii) consideration received by the Company under a cashless
exercise program; or (iv) any combination of the foregoing methods of payment.

Eligibility to Receive Awards

Options under the 1997 French Plan may be granted only to salaried employees
of the Company's French subsidiary who do not own more than 10% of the voting
power of all classes of stock of the Company, or any parent or subsidiary, and
who are residents of the Republic of France.

Plan Benefits

As of April 20, 2001, approximately 16 persons were eligible to receive
option grants under the 1997 French Plan. The granting of options under the
1997 French Plan is discretionary and the Company cannot now determine the
number or value of options to be granted in the future to any particular
person or group. On April 20, 2001, the last reported sales price of the
Company's Class A Common Stock on the Nasdaq National Market was $5.64.

Administration

The 1997 French Plan is administered by the Board of Directors, which may
delegate its decision making responsibility with respect to the 1997 French
Plan to a committee (the Board of Directors or such committee thereof being
the "Administrator"). The Board of Directors has authorized the Compensation
Committee to administer certain aspects of the 1997 French Plan, including the
granting of options to executive officers, and has also authorized an Option
Committee of the Board of Directors, consisting of Mr. Saylor, to grant
options, subject to certain limitations set by the Board of Directors. Under
the 1997 French Plan, the Administrator has the power to interpret the 1997
French Plan and the options, and to adopt such rules for the administration,
interpretation and application of the 1997 French Plan as are consistent with
the 1997 French Plan.

The 1997 French Plan provides for appropriate adjustments in the number and
kind of shares subject to the 1997 French Plan and to outstanding grants
thereunder in the event that the outstanding shares of stock subject to the
options are changed into or exchanged for a different number or kind of shares
of the Company or securities of the Company by reason of a merger,
consolidation, stock split, stock dividend or certain other types of
recapitalizations or combination of shares.

Options to acquire Class A Common Stock granted under the 1997 French Plan
may provide for termination of the options upon the liquidation or dissolution
of the Company. In the event of a merger of the Company with or into another
corporation, the sale of substantially all of the assets of the Company or a
"change in control" (as defined in the 1997 French Plan), each outstanding
option shall be assumed or an equivalent option substituted by the successor
corporation. In the event that the successor corporation does not agree to
assume the option or to substitute an equivalent option, the option shall be
deemed exercisable to the extent of the greater of (i) 40% of the number of
shares subject to the option or (ii) the number of shares then vested
immediately prior to the occurrence of the "change of control."

No option granted under the 1997 French Plan may be assigned or transferred
by the optionee, except by will or the laws of intestate succession. During
the lifetime of the holder of any option, the option may be exercised only by
the holder.

Amendment and Termination

The 1997 French Plan may be wholly or partially amended or otherwise
modified, suspended or terminated at any time by the Administrator. The
Company is required to obtain stockholder approval of any amendment to the
extent necessary or desirable to comply with applicable laws. Neither the
amendment, suspension, nor termination of the 1997 French Plan will impair any
rights or obligations under any previously granted option without the consent
of the holder of the option.

Income Tax Consequences

The following is a summary of the United States federal income tax
consequences that generally will arise with respect to options granted under
the 1997 French Plan and with respect to the sale of Class A Common Stock
acquired under the 1997 French Plan. This summary does not provide applicable
income tax consequences with respect to option grants or sale of Class A
Common Stock acquired under the 1997 French Plan under state or foreign law.

Tax Consequences to Participants

A participant will not recognize taxable income upon the grant of an option
under the 1997 French Plan. Nevertheless, a participant generally will
recognize ordinary compensation income upon the exercise of the option in an
amount equal to the excess of the fair market value of the Class A Common
Stock acquired through the exercise of the option (the "Option Stock") on the
exercise date over the exercise price.

A participant will have a tax basis for any Option Stock equal to the
exercise price plus any income recognized with respect to the option. Upon
selling Option Stock, a participant generally will recognize capital gain or
loss in an amount equal to the difference between the sale price of the Option
Stock and the participant's tax basis in the Option Stock. This capital gain
or loss will be a long-term capital gain or loss if the participant has held
the Option Stock for more than one year prior to the date of the sale and will
be a short-term capital gain or loss if the participant has held the Option
Stock for a shorter period.

Tax Consequences to the Company

The grant of an option under the 1997 French Plan will have no direct tax
consequences to the Company. However, the Company's French subsidiary may be
entitled to a business-expense deduction under certain circumstances with
respect to any ordinary compensation income recognized by a participant under
the 1997 French Plan, and such a deduction may have an indirect effect on the
Company's federal income tax situation.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDED AND
RESTATED 1997 STOCK OPTION PLAN FOR FRENCH EMPLOYEES.

PROPOSAL 4

TO APPROVE THE ISSUANCE OF SHARES OF CLASS A COMMON STOCK UPON CONVERSION OF
SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK AND AS DIVIDENDS THEREON.

On June 19, 2000, the Company issued 12,500 shares of Series A Convertible
Preferred Stock, $10,000 stated value per share (the "Series A Preferred
Shares"), in a private placement to institutional investors. The net proceeds
of the offering, after expenses, were approximately $119.5 million.

On June 14, 2001, the Company and the holders of the Series A Preferred
Shares agreed to a refinancing of 11,850 of the Series A Preferred Shares. The
Company redeemed or exchanged 11,850 Series A Preferred Shares for shares of
Class A Common Stock, Series B Convertible Preferred Stock, Series C
Convertible Preferred Stock, Series D Convertible Preferred Stock and Series E
Convertible Preferred Stock, leaving 650 Series A Preferred Shares
outstanding. In addition, the Company has the option to redeem for cash $1.2
million stated value of its outstanding Series A Preferred Shares, or 120
shares, until December 11, 2001, if such shares have not been converted into
Class A Common Stock.

In accordance with Nasdaq Rule 4350, which generally requires stockholder
approval for the issuance of securities representing 20% or more of an
issuer's outstanding listed securities, and under the terms of the agreement
pursuant to which we sold the Series A Preferred Shares, we must solicit
stockholder approval of the issuance of shares of Class A Common Stock upon
conversion of or in lieu of cash dividends on the Series A Preferred Shares,
if the issuance thereof would have otherwise been limited by the rules of the
Nasdaq Stock Market. If we obtain stockholder approval, there is no limit on
the number of shares that could be issued upon conversion of or in lieu of
cash dividends on the Series A Preferred Shares and such issuance of shares of
Class A Common Stock will no longer be subject to stockholder approval under
Nasdaq Rule 4350. If we do not obtain stockholder approval and, therefore, are
not obligated to issue shares representing 20% or more of the number of shares
outstanding due to restrictions relating to Nasdaq Rule 4350 that we are
otherwise contractually required to issue, we may be required to redeem all or
a portion of the outstanding Series A Preferred Shares.

The Company may require the holders to convert their Series A Preferred
Shares into shares of Class A Common Stock on June 19, 2002, which date may be
extended under some circumstances. If the Company does not require the holders
to convert their Series A Preferred Shares, then the Company must redeem them.
The holders have the right to convert their Series A Preferred Shares into
shares of Class A Common Stock at any time and from time to time, subject to
certain limitations on their percentage ownership of outstanding shares of
Class A Common Stock. The number of shares of Class A Common stock issuable on
conversion of a Series A Preferred Share is determined by dividing the sum of
$10,000 plus accrued and unpaid dividends by the applicable conversion price.
If conversion occurs at the election of the holder of the Series A Preferred
Shares, then the applicable conversion price will be the conversion price then
in effect, as it may have been adjusted annually based on the market price of
our Class A Common Stock. If the Company requires conversion at the maturity
date pursuant to the terms of the Certificate of Designations, Preferences and
Rights (the "Series A Certificate of Designations"), the applicable conversion
price will be 95% of the average of the dollar volume-weighted average prices
of the Class A Common Stock during the 30 consecutive trading days immediately
prior to the date the Company requires such conversion.

To the extent the Series A Preferred Shares are converted or dividends on
the Series A Preferred Shares are paid in shares of Class A Common Stock
rather than cash, a significant number of additional shares of Class A Common
Stock may be sold into the market, which could decrease the price of the
shares of Class A Common Stock. In that case, the Company could be required to
issue an increasingly greater number of shares of Class A Common Stock upon
future conversions of the Series A Preferred Shares, sales of which could
further depress the price of our Class A Common Stock. If the sale of a large
number of shares of Class A Common Stock upon conversion of or payment of
dividends in lieu of cash on the Series A Preferred Shares results in a
decline in

the price of the Class A Common Stock, this event could encourage short sales
by the holders or others. Short sales could place further downward pressure on
the price of the Class A Common Stock.

The conversion of and the payment of dividends in shares of Class A Common
Stock in lieu of cash on the Series A Preferred Shares may result in
substantial dilution to the interest of other holders of the Class A Common
Stock. Even though no holder may convert its Series A Preferred Shares if upon
such conversion such holder, together with its affiliates, would have acquired
a number of shares of Class A Common Stock during the 60-day period ending on
the date of conversion which, when added to the number of shares of Class A
Common Stock held at the beginning of such 60-day period, would exceed 9.99%
of our then outstanding Class A Common Stock (excluding, for purposes of such
determination, shares of Class A Common Stock issuable upon conversion of
Series A Preferred Shares which have not been converted), this restriction
does not prevent a holder from selling a substantial number of shares in the
market. By periodically selling shares into the market, an individual holder
could eventually sell more than 9.99% of the Company's Class A Common Stock
while never holding more than 9.99% at any specific time.

The following table illustrates the number of shares of Class A Common Stock
the Company would be required to issue upon conversion of (1) the 120 Series A
Preferred Shares that may remain outstanding if the Company does not elect to
redeem such 120 shares and (2) the 530 Series A Preferred Shares that will
remain outstanding, at an assumed conversion price of $33.39 per share of
Class A Common Stock as of April 20, 2001, and the resulting percentage of the
Company's total shares of Class A Common Stock outstanding after such
conversion. The table also illustrates the number of shares of Class A Common
Stock the Company would be required to issue assuming (i) increases of 25%,
50%, 75% and 90% in the assumed conversion price and (ii) decreases of 25%,
50%, 75% and 90% in the assumed conversion price.

Assumed
Conversion Number of
Price Per Shares of
Share of Class A Percentage of
Class A Common Stock Common Stock
Series A Preferred Shares Common Stock Issuable(1) after Conversion(2)
------------------------- ------------ ------------ -------------------

Conversion of 120 Series A
Preferred Shares.............. $63.43 (+90%) 18,918 0.02%
$58.42 (+75%) 20,539 0.03%
$50.08 (+50%) 23,963 0.03%
$41.73 (+25%) 28,755 0.04%
$33.39 (0%) 35,944 0.04%
$25.04 (-25%) 47,925 0.06%
$16.69 (-50%) 71,888 0.09%
$ 8.35 (-75%) 143,775 0.17%
$ 3.34 (-90%) 359,439 0.44%

Conversion of 530 Series A
Preferred Shares.............. $63.43 (+90%) 83,554 0.10%
$58.42 (+75%) 90,715 0.11%
$50.08 (+50%) 105,835 0.13%
$41.73 (+25%) 127,002 0.15%
$33.39 (0%) 158,752 0.19%
$25.04 (-25%) 211,669 0.26%
$16.69 (-50%) 317,504 0.39%
$ 8.35 (-75%) 635,008 0.77%
$ 3.34 (-90%) 1,587,520 1.90%

--------
(1) The number of shares of Class A Common Stock issuable upon conversion and
the percentage of outstanding Class A Common Stock after such conversion
set forth above do not take into account any

shares of Class A Common Stock that may be issuable as dividends on the
Series A Preferred Shares. If the dividends on the Series A Preferred
Shares are required to be paid in Class A Common Stock for the remaining
120 Series A Preferred Shares from March 31, 2001, the last dividend
payment date prior to the date of this proxy statement, to June 19, 2002,
the maturity date of such 120 Series A Preferred Shares, assuming a
constant dividend conversion price of $5.64, which was the closing sale
price of the Class A Common Stock on April 20, 2001, and assuming all 120
Series A Preferred Shares remain outstanding until the maturity date, we
would be required to issue an additional 18,158 shares as payment for
accrued dividends. If the dividends on the Series A Preferred Shares are
required to be paid in Class A Common Stock for the remaining 530 Series A
Preferred Shares from March 31, 2001, the last dividend payment date prior
to the date of this proxy statement, to June 19, 2002, the maturity date of
such 530 Series A Preferred Shares, assuming a constant dividend conversion
price of $5.64, which was the closing sale price of the Class A Common
Stock on April 20, 2001, and assuming all 530 Series A Preferred Shares
remain outstanding until the maturity date, we would be required to issue
an additional 80,198 shares as payment for accrued dividends.

(2) Calculated based on 31,146,465 shares of Class A Common Stock and
50,975,624 shares of Class B Common Stock (which is convertible into Class
A Common Stock on a one for one basis) issued and outstanding as of April
20, 2001.

The Series A Preferred Shares carry a dividend rate of 7% per annum, payable
quarterly or upon conversion or redemption. At the Company's option, the
dividend may be paid in cash or shares of Class A Common Stock, subject to
satisfaction of certain conditions. If the Company chooses to pay dividends in
shares of Class A Common Stock, the number of shares to be issued in payment
of the dividend on the Series A Preferred Shares will be equal to the accrued
dividends divided by the dividend conversion price. For purposes of such
calculation, the dividend conversion price will be equal to 95% of the average
of the dollar volume-weighted average prices of a share of Class A Common
Stock during the five consecutive trading days immediately preceding the
dividend date.

The Series A Preferred Shares mature on June 19, 2002, subject to extension
in certain circumstances, at which time the Series A Preferred Shares must
either be redeemed or converted at the Company's option. If the Company elects
to redeem any Series A Preferred Shares outstanding on June 19, 2002, the
amount required to be paid will be equal to the price originally paid for such
shares, plus accrued and unpaid dividends. If the Company elects to convert
any Series A Preferred Shares outstanding on June 19, 2002, it will be
required to issue shares of Class A Common Stock in an amount determined as
described above.

If a triggering event, as described in the Series A Certificate of
Designations, occurs, the holders of the Series A Preferred Shares will have
the right to require the Company to redeem all or a portion of any outstanding
Series A Preferred Shares for cash. The redemption price in such a case is the
greater of: (1) 125% of the price paid for the Series A Preferred Shares plus
accrued dividends; or (2) the product of the number of shares of Class A
Common Stock into which the Series A Preferred Stock is convertible multiplied
by the closing sale price of a share of Class A Common Stock on the day
immediately before the triggering event occurs.

In the event of a merger transaction, a hostile takeover or a sale of all or
substantially all of the Company's assets, each holder of the Series A
Preferred Shares at its option has the right to require the Company to redeem
all or a portion of such holder's preferred shares at a price equal to 125% of
the price paid for such shares plus accrued dividends.

In the event of the Company's liquidation, the holders of the Series A
Preferred Shares will be entitled to a liquidation preference before any
amounts are paid to the holders of Class A Common Stock. The liquidation
preference is equal to the amount originally paid for the Series A Preferred
Shares, or $10,000 per share, plus accrued and unpaid dividends on any
outstanding Series A Preferred Shares.

Other than as required by law, the holders of the Series A Preferred Shares
have no voting rights except that the consent of holders of at least two-
thirds of the outstanding Series A Preferred Shares will be required to

effect any change in the Company's Certificate of Incorporation or the Series
A Certificate of Designations that would change any of the rights of the
Series A Preferred Shares or to issue any additional Series A Preferred
Shares.

The terms of the Series A Preferred Shares are complex and only briefly
summarized in this proxy statement. Stockholders wishing further information
concerning the rights, preferences and terms of the Series A Preferred Shares
are referred to the full description contained in the Company's Current Report
on Form 8-K filed with the SEC on June 19, 2000 and the exhibits to such
report.

In connection with the Company's issuance of the Series A Preferred Shares,
the Company filed a registration statement on Form S-3 with the SEC on August
3, 2000, as amended on October 19, 2000 and November 22, 2000. That
registration statement covers the resale of the shares of Class A Common Stock
that are issuable upon conversion of or in lieu of cash dividends on the
Series A Preferred Shares that the holders acquired from the Company in the
private placement transaction.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ISSUANCE OF SHARES OF
CLASS A COMMON STOCK WITH RESPECT TO THE SERIES A CONVERTIBLE PREFERRED STOCK.

PROPOSAL 5

TO APPROVE THE ISSUANCE OF SHARES OF CLASS A COMMON STOCK (I) UPON EXCHANGE OF
SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK AND (II) UPON CONVERSION OF
SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK, SERIES C CONVERTIBLE STOCK,
SERIES D CONVERTIBLE PREFERRED STOCK AND SERIES E CONVERTIBLE PREFERRED STOCK
TO BE ISSUED IN EXCHANGE FOR SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK
(INCLUDING ANY SHARES OF CLASS A COMMON STOCK ISSUABLE IN LIEU OF
CASH DIVIDENDS THEREON).

On June 14, 2001, the Company and the holders of the Series A Preferred
Shares agreed to a refinancing of 11,850 of the Series A Preferred Shares,
leaving 650 Series A Preferred Shares outstanding. The Company redeemed or
exchanged these 11,850 Series A Preferred Shares as follows:

. $12.5 million stated value of the Series A Preferred Shares, or 1,250
shares, were redeemed for $12.5 million in cash;

. $38.75 million stated value of the Series A Preferred Shares, or 3,875
shares, and accrued dividends on all Series A Preferred Shares being
exchanged were exchanged for 5,568,466 shares of Class A Common Stock
and $16.261 million stated value of Series D Convertible Preferred Stock
(the "Series D Preferred Shares") with a fixed conversion price of $5.00
per share;

. $33.125 million stated value of the Series A Preferred Shares, or
3,312.5 shares, were exchanged for an equivalent stated value of Series
B Convertible Preferred Stock (the "Series B Preferred Shares") with a
conversion price of $12.50 per share, subject to adjustment at maturity
if the Company elects to mandatorily convert these shares into Class A
Common Stock;

. $27.825 million stated value of the Series A Preferred Shares, or
2,782.5 shares, were exchanged for an equivalent stated value of Series
C Convertible Preferred Stock (the "Series C Preferred Shares"), with a
conversion price of $17.50 per share, subject to adjustment at maturity
if the Company elects to mandatorily convert these shares into Class A
Common Stock; and

. $6.3 million stated value of the Series A Preferred Shares, or 630
shares, were exchanged for an equivalent stated value of Series E
Convertible Preferred Stock (the "Series E Preferred Shares") with a
conversion price per share equal to the average of the volume-weighted
average prices of the Class A Common Stock during the ten consecutive
trading days immediately preceding December 11, 2001.

As part of the refinancing, the Company has the option to redeem for cash $1.2
million stated value of its outstanding Series A Preferred Shares, or 120
shares, until December 11, 2001, if such shares have not been converted into
Class A Common Stock. If the Company does not exercise its option to redeem
such 120 shares, an aggregate of 650 Series A Preferred Shares will remain
outstanding, assuming none of such shares are converted. These 650 Series A
Preferred Shares may be converted by the holders prior to maturity or by the
Company at maturity for shares of Class A Common Stock and accrue dividends
payable at the Company's option in shares of Class A Common Stock in lieu of
cash as described under "Proposal 4."

The Series B Preferred Shares and the Series C Preferred Shares accrue
dividends payable in cash or Class A Common Stock. The aggregate number of
shares of Class A Common Stock which may be issued as dividends on the Series
B Preferred Shares and Series C Preferred Shares are collectively referred to
in this proposal as the "Dividend Shares." The Series B Preferred Shares,
Series C Preferred Shares and Series D Preferred Shares can be converted into
Class A Common Stock by the holder at any time or by the Company three years
after the date of issuance. The Series E Preferred Shares can be converted
into Class A Common Stock by the holder at

any time beginning on December 11, 2001. The aggregate number of shares of
Class A Common Stock into which the Series B Preferred Shares, Series C
Preferred Shares, Series D Preferred Shares and Series E Preferred Shares may
be converted are collectively referred to in this proposal as the "Conversion
Shares."

In accordance with Nasdaq Rule 4350, which generally requires stockholder
approval for the issuance of securities representing 20% or more of an
issuer's outstanding listed securities, and under the terms of the agreements
pursuant to which we have redeemed or exchanged the Series A Preferred Shares,
we must solicit stockholder approval of the issuance of Class A Common Stock
in exchange for Series A Preferred Shares and the issuance of the Conversion
Shares and the Dividend Shares, if the issuance of these securities would have
otherwise been limited by the rules of the Nasdaq Stock Market. If we obtain
stockholder approval, there is no limit on the aggregate number of shares of
Class A Common Stock that could be issued upon exchange of Series A Preferred
Shares, upon the conversion of the Series B Preferred Shares, Series C
Preferred Shares, Series D Preferred Shares and Series E Preferred Shares and
in lieu of cash dividends on the Series B Preferred Shares and Series C
Preferred Shares. If we do not obtain stockholder approval and, therefore, are
not obligated to issue shares representing 20% or more of the number of shares
outstanding due to restrictions relating to Nasdaq Rule 4350 that we are
otherwise contractually required to issue, we may be required to redeem all or
a portion of the Series B Preferred Shares, Series C Preferred Shares, Series
D Preferred Shares and Series E Preferred Shares.

The Company may require holders to convert their Series B Preferred Shares
and Series C Preferred Shares into shares of Class A Common Stock on the
maturity date of June 14, 2004, which date may be extended under some
circumstances. If the Company does not require the holders to convert their
Series B Preferred Shares or Series C Preferred Shares, then the Company must
redeem them. In addition, the holders have the right to convert their Series B
Preferred Shares and Series C Preferred Shares into shares of Class A Common
Stock at any time and from time to time, subject to certain limitations on
their percentage ownership of outstanding shares of Class A Common Stock. The
number of shares of Class A Common Stock issuable on conversion of a Series B
Preferred Share or Series C Preferred Share is determined by dividing the sum
of $10,000 plus any accrued and unpaid dividends by the applicable conversion
price per share. If the conversion is at the option of the holder, the
applicable conversion price for the Series B Preferred Shares is $12.50 per
share and the applicable conversion price of the Series C Preferred Shares is
$17.50 per share, each subject to adjustment under certain circumstances. If
the Company requires conversion at the maturity date pursuant to the terms of
the Certificate of Designations relating to the Series B Preferred Shares and
the Certificate of Designations relating to the Series C Preferred Shares, the
applicable conversion price will be 95% of the average of the dollar volume-
weighted average prices of the Class A Common Stock during the 30 consecutive
trading days immediately prior to the date the Company requires such
conversion.

The Company is required to convert any Series D Preferred Shares outstanding
at the maturity date of June 14, 2004. In addition, the holders have the right
to convert their Series D Preferred Shares into shares of Class A Common Stock
at any time and from time to time, subject to certain limitations on their
percentage ownership of outstanding shares of Class A Common Stock. The
Company is required to issue 2,000 shares of Class A Common Stock upon
conversion of each Series D Preferred Share.

The Series E Preferred Shares have a maturity date of June 14, 2004 and can
be converted into Class A Common Stock by the holder at any time beginning on
December 11, 2001, based on a conversion price equal to the average of the
volume-weighted average prices of the Class A Common Stock during the ten
consecutive trading days immediately preceding December 11, 2001.

To the extent the remaining 650 Series A Preferred Shares, Series B
Preferred Shares, Series C Preferred Shares, Series D Preferred Shares or
Series E Preferred Shares are converted into Conversion Shares or dividends on
the remaining 650 Series A Preferred Shares, Series B Preferred Shares or
Series C Preferred Shares are paid in Dividend Shares rather than cash, a
significant number of additional shares of Class A Common Stock may be sold
into the market, which could decrease the price of the shares of Class A
Common Stock. In that case, the Company

could be required to issue an increasingly greater aggregate number of shares
of Class A Common Stock as Conversion Shares upon future conversions of the
Series B Preferred Shares, Series C Preferred Shares, Series D Preferred
Shares and Series E Preferred Shares and as Dividend Shares on the Series B
Preferred Shares and Series C Preferred Shares, sales of which could further
depress the price of our Class A Common Stock. If the sale of a large number
of shares of Class A Common Stock upon the issuance of shares of Class A
Common Stock as Conversion Shares or as Dividend Shares results in a decline
in the price of the Class A Common Stock, this event could encourage short
sales by the holders or others. Short sales could place further downward
pressure on the price of the Class A Common Stock.

The exchange of the Series A Preferred Shares for Class A Common Stock and
the issuance of Conversion Shares or Dividend Shares may result in substantial
dilution to the interest of other holders of the Class A Common Stock. Even
though no holder may convert its Series A Preferred Shares, Series B Preferred
Shares, Series C Preferred Shares, Series D Preferred Shares or Series E
Preferred Shares if upon such conversion such holder, together with its
affiliates, would have acquired a number of shares of Class A Common Stock
during the 60-day period ending on the date of conversion which, when added to
the number of shares of Class A Common Stock held at the beginning of such 60-
day period, would exceed 9.99% of our then outstanding Class A Common Stock
(excluding, for purposes of such determination, shares of Class A Common Stock
issuable upon conversion of Series A Preferred Shares, Series B Preferred
Shares, Series C Preferred Shares, Series D Preferred Shares and Series E
Preferred Shares which have not been converted), this restriction does not
prevent a holder from selling a substantial number of shares in the market. By
periodically selling shares into the market, an individual holder could
eventually sell more than 9.99% of the Company's Class A Common Stock while
never holding more than 9.99% at any specific time.

The following table illustrates the number of shares of Class A Common Stock
the Company would be required to issue upon conversion of 530 Series A
Preferred Shares, an additional 120 Series A Preferred Shares (if such shares
are not redeemed by the Company) and all Series B Preferred Shares, Series C
Preferred Shares and Series E Preferred Shares issued in connection with the
refinancing of the Series A Preferred Shares at (1) the conversion prices of
the Series A Preferred Shares, Series B Preferred Shares and Series C
Preferred Shares applicable prior to maturity and at an assumed conversion
price of $5.64 per share for the Series E Preferred Shares (the closing price
of the Class A Common Stock on April 20, 2001) and (2) at the assumed
conversion prices of the Series A Preferred Shares, Series B Preferred Shares
and Series C Preferred Shares at maturity and at the assumed conversion price
of $5.64 per share for the Series E Preferred Shares and assuming increases of
25%, 50% and 75% in such assumed conversion prices and assuming decreases of
25%, 50% and 75% in such assumed conversion prices, and the resulting
percentage of the Company's total shares of Class A Common Stock and Class B
Common Stock outstanding after such exchange and conversion. The table also
illustrates the resulting percentage of the Company's total shares of Class A
Common Stock outstanding after issuance by the Company upon exchange of 3,875
Series A Preferred Shares of an aggregate of 5,568,466 shares of Class A
Common Stock and 3,252,200 shares of Class A Common Stock issuable upon
conversion of the Series D Preferred Shares.

Conversion
Price Per
Share Number of Shares of Percentage of
Series of Preferred of Class A Class A Common Common Stock
Stock Common Stock Stock Issuable(1) after Conversion(2)
------------------- ------------ ------------------- -------------------

Conversion of 530 shares
of Series A Convertible
Preferred Stock prior
to maturity............ $58.42(+75%) 90,715 0.11%
$50.08(+50%) 105,835 0.13%
$41.73(+25%) 127,002 0.15%
$33.39 (0%) 158,752 0.19%
$25.04 (-25%) 211,669 0.26%
$16.69 (-50%) 317,504 0.39%
$ 8.35 (-75%) 635,008 0.77%

Conversion Price
Per Share Number of Shares of Percentage of
Series of Preferred of Class A Class A Common Common Stock
Stock Common Stock Stock Issuable(1) after Conversion(2)
------------------- ---------------- ------------------- -------------------

Conversion of 530 shares
of Series A Convertible
Preferred Stock at
maturity(3)............ $ 9.87 (+75%) 536,981 0.65%
$ 8.46 (+50%) 626,478 0.76%
$ 7.05 (+25%) 751,773 0.91%
$ 5.64 (0%) 939,716 1.13%
$ 4.23 (-25%) 1,252,955 1.50%
$ 2.82 (-50%) 1,879,433 2.24%
$ 1.41 (-75%) 3,758,865 4.38%
Conversion of 120 Series
A Preferred Shares
prior to maturity...... $58.42(+75%) 20,539 0.03%
$50.08(+50%) 23,963 0.03%
$41.73(+25%) 28,755 0.04%
$33.39 (0%) 35,944 0.04%
$25.04 (-25%) 47,925 0.06%
$16.69 (-50%) 71,888 0.09%
$ 8.35 (-75%) 143,775 0.17%
Conversion of 120 Series
A Preferred Shares at
maturity(3)............ $ 9.87(+75%) 121,581 0.15%
$ 8.46(+50%) 141,844 0.17%
$ 7.05(+25%) 170,213 0.21%
$ 5.64 (0%) 212,766 0.26%
$ 4.23 (-25%) 283,688 0.34%
$ 2.82 (-50%) 425,532 0.52%
$ 1.41 (-75%) 851,064 1.03%
Conversion of Series B
Preferred Shares by
holders prior to
maturity............... $12.50 2,650,000 3.13%
Conversion of Series B
Preferred Shares by the
Company at
maturity(3)............ $ 9.87(+75%) 3,356,130 3.93%
$ 8.46(+50%) 3,915,485 4.55%
$ 7.05(+25%) 4,698,582 5.41%
$ 5.64 (0%) 5,873,227 6.67%
$ 4.23 (-25%) 7,830,969 8.71%
$ 2.82 (-50%) 11,746,454 12.51%
$ 1.41 (-75%) 23,492,908 22.24%
Conversion of Series C
Preferred Shares by
holders prior to
maturity............... $17.50 1,590,000 1.90%
Conversion of Series C
Preferred Shares by the
Company at
maturity(3)............ $ 9.87(+75%) 2,819,149 3.32%
$ 8.46(+50%) 3,289,007 3.85%
$ 7.05(+25%) 3,946,809 4.59%
$ 5.64 (0%) 4,933,511 5.67%
$ 4.23 (-25%) 6,578,014 7.42%
$ 2.82 (-50%) 9,867,021 10.73%
$ 1.41 (-75%) 19,734,043 19.37%
Conversion of Series D
Preferred Shares....... $ 5.00 3,252,200 3.81%

Conversion Price
Per Share Number of Shares of Percentage of
Series of Preferred of Class A Class A Common Common Stock
Stock Common Stock Stock Issuable(1) after Conversion(2)
------------------- ---------------- ------------------- -------------------

Conversion of Series E
Preferred Shares by
holders prior to
maturity(3)............ $9.87(+75%) 638,298 0.77%
$8.46(+50%) 744,681 0.90%
$7.05(+25%) 893,617 1.08%
$5.64 (0%) 1,117,021 1.34%
$4.23 (-25%) 1,489,362 1.78%
$2.82 (-50%) 2,234,043 2.65%
$1.41 (-75%) 4,468,085 5.16%
Exchange of 2,515 Series
A Preferred Shares for
Class A Common Stock... Not Applicable 5,568,466 6.35%

--------

(1) The number of shares of Class A Common Stock issuable upon conversion or
exchange as set forth in the table above does not include any shares of
Class A Common Stock that may be issuable as dividends on the remaining
650 Series A Preferred Shares, the Series B Preferred Shares or the Series
C Preferred Shares. If the dividends on the remaining 650 Series A
Preferred Shares are required to be paid in Class A Common Stock from
March 31, 2001, the last dividend payment date prior to the date of this
proxy statement, to June 19, 2002, the maturity date of such 650 Series A
Preferred Shares, assuming a constant dividend conversion price of $5.64,
which was the closing sale price of the Class A Common Stock on April 20,
2001, and assuming all 650 Series A Preferred Shares remain outstanding
until the maturity date, we would be required to issue an additonal 98,356
shares as payment for accrued dividends. If we were to pay dividends on
the Series B Preferred Shares and Series C Preferred Shares over the
three-year term thereof in shares of Class A Common Stock, assuming a
constant dividend conversion price of $5.64, which was the closing sale
price of the Class A Common Stock on April 20, 2001, and assuming all
Series B Preferred Shares and Series C Preferred Shares remain outstanding
for the entire three-year term, we would be required to issue an
additional 4,052,527 shares of Class A Common Stock in respect of such
dividends.

(3) Based upon an assumed conversion price of $5.64, which was the closing
sale price of the Class A Common Stock on April 20, 2001.

The Series B Preferred Shares and Series C Preferred Shares carry a dividend
rate of 12.5% per annum, payable beginning on the earlier of (a) October 1,
2001 and (b) the later of July 1, 2001 and the date that is 10 days after the
date that the registration statement filed with respect to the shares of Class
A Common Stock issuable upon conversion of, or payable as dividends on, the
Series B Preferred Shares, Series C Preferred Shares, Series D Preferred
Shares and Series E Preferred Shares is declared effective by the SEC, and
quarterly thereafter or upon conversion or redemption of the Series B
Preferred Shares or Series C Preferred Shares. At the Company's option, the
dividends on the Series B Preferred Shares and Series C Preferred Shares may
be paid in cash or Dividend Shares, subject to satisfaction of certain
conditions. If the Company chooses to pay dividends in Dividend Shares, the
number of Dividend Shares to be issued will be equal to the accrued dividends
divided by the dividend conversion price. For purposes of such calculation,
the dividend conversion price will be equal to 95% of the average of the
dollar volume-weighted average prices of a share of Class A Common Stock
during the five consecutive trading days immediately preceding the dividend
date.

The Series B Preferred Shares and Series C Preferred Shares outstanding at
the maturity date must either be redeemed or converted at the Company's
option. If the Company elects to redeem any Series B Preferred Shares or
Series C Preferred Shares outstanding at maturity, the amount required to be
paid will be equal to $10,000 per share, plus accrued and unpaid dividends. If
the Company elects to convert any Series B Preferred Shares or Series C
Preferred Shares outstanding at maturity, it will be required to issue shares
of Class A Common Stock as described above.

The Series E Preferred Shares mature on June 14, 2004 and carry a dividend
rate of 12.5% until September 12, 2001, 15% from September 13, 2001 until
December 11, 2001 and 17.5% thereafter, accruing daily and

payable in cash on a quarterly basis. The Company can redeem the Series E
Preferred Shares at any time through December 11, 2001, for 105% of the stated
value plus accrued and unpaid dividends until October 27, 2001 and for 110% of
the stated value plus accrued and unpaid dividends from October 28, 2001
through December 11, 2001. In addition, the holders may require the Company to
redeem the Series E Preferred Shares beginning on July 14, 2002 for 120% of
the stated value plus accrued and unpaid dividends and may require redemption
of the Series E Preferred Shares prior to that date upon specified financing
transactions or certain other events. The Company is required to redeem any
Series E Preferred Shares outstanding at maturity for $12,000 per share, plus
accrued and unpaid dividends.

If a triggering event, as described in the certificates of designations of
rights and preferences relating to the Series B Preferred Shares, Series C
Preferred Shares, Series D Preferred Shares and Series E Preferred Shares,
occurs, the holders of the Series B Preferred Shares, Series C Preferred
Shares, Series D Preferred Shares and Series E Preferred Shares will have the
right to require the Company to redeem all or a portion of any such
outstanding shares for cash. The redemption price in such a case is the
greater of: (1) the conversion price of the Series D Preferred Shares, with
respect to the Series D Preferred Shares, or 125% of the applicable conversion
price for the Series B Preferred Shares, Series C Preferred Shares and Series
E Preferred Shares, plus accrued dividends; or (2) the product of the number
of shares of Class A Common Stock into which the Series B Preferred Shares,
Series C Preferred Shares, Series D Preferred Shares or Series E Preferred
Shares are convertible multiplied by the closing sale price of a share of
Class A Common Stock on the day immediately before the triggering event
occurs.

In the event of a merger, consolidation, sale of all or substantially all of
the Company's assets or related transaction, each holder of the Series B
Preferred Shares, Series C Preferred Shares and Series E Preferred Shares has
the right, at its option, to require the Company to redeem all or a portion of
such holder's preferred shares at a price equal to 125% of the price paid for
such shares plus accrued dividends.

In the event of the Company's liquidation, the holders of the Series B
Preferred Shares, Series C Preferred Shares, Series D Preferred Shares and
Series E Preferred Shares will be entitled to a liquidation preference before
any amounts are paid to the holders of Class A Common Stock. The liquidation
preference is equal to $10,000 per share, plus, in the case of the Series B
Preferred Shares, Series C Preferred Shares or Series E Preferred Shares
accrued and unpaid dividends.

Other than as required by law, the holders of the Series B Preferred Shares,
Series C Preferred Shares, Series D Preferred Shares and Series E Preferred
Shares have no voting rights except that the consent of holders of at least
two-thirds of the outstanding shares of each such series of preferred stock
will be required to effect any change in the Company's Certificate of
Incorporation or the applicable certificate of designations of rights and
preferences that would change any of the rights of the shares of such series
of preferred stock or to issue any additional shares of such series of
preferred stock.

The terms of the exchange of the Series A Preferred Shares for Class A
Common Stock, Series B Preferred Shares, Series C Preferred Shares, Series D
Preferred Shares and Series E Preferred Shares are complex and only briefly
summarized in this proxy statement. Stockholders wishing further information
concerning the terms of the exchange of the Series A Preferred Shares and the
terms, rights and preferences of the Series B Preferred Shares, Series C
Preferred Shares, Series D Preferred Shares and Series E Preferred Shares are
referred to the full description contained in the Company's Current Report on
Form 8-K filed with the Securities and Exchange Commission on June 18, 2001
and the exhibits to such report.

In connection with the Company's redemption and exchange of the Series A
Preferred Shares, the Company intends to file a registration statement on Form
S-3 with the Securities and Exchange Commission on or about June 26, 2001.
That registration statement will cover the resale of the shares of Class A
Common Stock that were issued in exchange for Series A Preferred Shares and
that are issuable upon redemption or exchange of the Series A Preferred Shares
and as Conversion Shares and Dividend Shares.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ISSUANCE OF SHARES OF
CLASS A COMMON STOCK (I) UPON EXCHANGE OF SHARES OF SERIES A CONVERTIBLE
PREFERRED STOCK AND (II) UPON CONVERSION OF OR AS DIVIDENDS ON SHARES OF
SERIES B CONVERTIBLE PREFERRED STOCK, SERIES C CONVERTIBLE PREFERRED STOCK,
SERIES D CONVERTIBLE PREFERRED STOCK AND SERIES E CONVERTIBLE PREFERRED STOCK.

PROPOSAL 6

TO APPROVE THE ISSUANCE OF SHARES OF CLASS A COMMON STOCK UPON CONVERSION OF 7
1/2% SERIES A UNSECURED NOTES TO BE ISSUED TO CLASS MEMBERS PURSUANT TO THE
SETTLEMENT AGREEMENT AMONG THE COMPANY, CERTAIN OF THE COMPANY'S OFFICERS AND
DIRECTORS AND PLAINTIFFS' COUNSEL, APPROVED BY THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF VIRGINIA ON APRIL 2, 2001.

From March through May 2000, twenty-five class action complaints were filed
in federal courts in various jurisdictions alleging that the Company and
certain of its officers and directors violated Section 10(b) of the Exchange
Act, Rule 10b-5 promulgated thereunder, and Section 20(a) and Section 20A of
the Exchange Act. These lawsuits were consolidated in the United States
District Court for the Eastern District of Virginia. On July 7, 2000, the lead
plaintiffs filed an amended class action complaint naming the Company, certain
of the Company's officers and directors, and PricewaterhouseCoopers LLP as
defendants. On October 23, 2000, the Company, its officers and directors named
as defendants, and plaintiffs' counsel entered into a settlement agreement in
the consolidated class action.

Under the settlement agreement, class members will receive: (1) five-year 7
1/2% Series A Unsecured Notes issued by the Company having an original
aggregate principal amount of $80.5 million (the "Notes"); (2) 2,777,778
shares of Class A Common Stock; and (3) warrants to purchase 1.9 million
shares of Class A Common Stock at an exercise price of $40.00 per share, with
the warrants expiring five years from the date they are issued. The settlement
was approved by the United States District Court for the Eastern District of
Virginia on April 2, 2001 and the period from which an appeal could have been
taken has expired. The settlement is subject to various closing conditions.

In accordance with Nasdaq Rule 4350, which generally requires stockholder
approval for the issuance of securities representing 20% or more of an
issuer's outstanding listed securities, we must solicit stockholder approval
of the issuance of shares of our Class A Common Stock upon conversion of the
Notes, if the issuance of such shares would have otherwise been limited by the
rules of the Nasdaq Stock Market. If we obtain stockholder approval, there is
no limit on the amount of shares that could be issued upon conversion of the
Notes. If stockholder approval is not obtained, the Company could not convert
the Notes at conversion prices which would result in an issuance of shares of
its Class A Common Stock representing 20% or more of the amount then
outstanding, or the conversion of the Notes under such circumstances would
violate Nasdaq Rule 4350 and the Company's Class A Common Stock could be
delisted.

The Company, in its sole discretion, may convert all or any of the Notes, in
whole or in part, into shares of Class A Common Stock upon giving 30 days
prior written notice to the holders of the Notes. The number of shares into
which the Notes may be converted is determined by dividing the principal
amount and any accrued but unpaid interest by an amount equal to 80% of the
dollar-weighted average trading price for all round lot transactions in the
Class A Common Stock on the Nasdaq Stock Market for the ten trading days
ending two days prior to the date that written notice is provided of the
conversion. The conversion of the Notes may result in substantial dilution to
the interest of other holders of the Class A Common Stock.

The following table illustrates the number of shares of Class A Common Stock
the Company would be required to issue upon conversion of the Notes at an
assumed conversion price of the closing sale price of $5.64 per share of the
Class A Common Stock on April 20, 2001, and the resulting percentage of the
Company's total shares of Class A Common Stock outstanding after such
conversion. The table also illustrates the number of shares of Class A Common
Stock the Company would be required to issue assuming (i) increases of 25%,
50% and 75% in the assumed conversion price; and (ii) decreases of 25%, 50%
and 75% in the assumed conversion price.

Number of Shares of Class A
Assumed Conversion Price Per Common Stock Issuable Upon Percentage of Common Stock
Share of Class A Common Stock Conversion After Conversion (1)
----------------------------- --------------------------- --------------------------

$9.87 (+75%) 12,664,640 13%
$8.46 (+50%) 14,775,414 15%
$7.05 (+25%) 17,730,496 18%
$5.64 (0%) 22,163,121 21%
$4.23 (-25%) 29,550,827 26%
$2.82 (-50%) 44,326,241 35%
$1.41 (-75%) 88,652,482 52%

--------

(1) Calculated based on 31,146,465 shares of Class A Common Stock and
50,975,624 shares of Class B Common Stock (which is convertible into
shares of Class A Common Stock on a one for one basis) issued and
outstanding as of April 20, 2001.

The Notes accrue interest at a rate of 7.5% per annum beginning on April 2,
2001 and payable semi-annually beginning six months after the date of issuance
or upon conversion or redemption. The Notes mature five years from the date of
issuance, at which time such Notes that have not been redeemed or converted at
the Company's option are payable in full.

The Company may elect to convert the Notes into shares of Class A Common
Stock as described above. In addition, the Company may at any time elect to
redeem any or all of the Notes, in whole or in part, for cash equal to the
outstanding principal plus accrued and unpaid interest. The Company may not
reduce the outstanding principal amount of the Notes below 60% of the original
outstanding principal amount of such Notes, unless the Company redeems or
converts into shares of Class A Common Stock the entire remaining outstanding
principal amount of the Notes.

The Company may not enter into a merger, consolidation or a sale of all or
substantially all of the Company's assets, unless the Company is the surviving
entity or the surviving or transferree entity expressly assumes all of the
Company's obligations in connection with the Notes and the Indenture dated
January 11, 2001 by and between the Company and American Stock Transfer &
Trust Company (the "Indenture") by entering into a supplemental indenture.

The holders of the Notes have no rights as stockholders of the Company
unless and until such holder's Notes have been converted into shares of Class
A Common Stock. Notes will be deemed converted into shares of Class A Common
Stock when notice of conversion is mailed in accordance with the Indenture.

The terms of the Notes and the Indenture are complex and only briefly
summarized in this proxy statement. Stockholders wishing further information
concerning the rights, preferences and terms of the Notes are referred to the
Stipulation of Settlement regarding the settlement of the class action lawsuit
dated January 11, 2001 filed as an exhibit to the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission on April 2, 2001.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ISSUANCE OF SHARES OF
CLASS A COMMON STOCK UPON CONVERSION OF 7 1/2% SERIES A UNSECURED NOTES TO BE
ISSUED TO CLASS MEMBERS PURSUANT TO THE SETTLEMENT AGREEMENT.

PROPOSAL 7

TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE CURRENT FISCAL YEAR.

The Board of Directors has selected the firm of PricewaterhouseCoopers LLP
as the Company's independent auditors for the current fiscal year. Although
stockholder approval of the Board of Directors' selection of
PricewaterhouseCoopers LLP is not required by law, the Board of Directors
believes that it is advisable to give stockholders an opportunity to ratify
this selection. If this proposal is not approved at the Annual Meeting, the
Board of Directors may reconsider its selection of PricewaterhouseCoopers LLP.

Representatives of PricewaterhouseCoopers LLP are expected to be present at
the Annual Meeting and will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate questions
from stockholders.

Independent Auditors Fees and Other Matters

Audit Fees

PricewaterhouseCoopers LLP billed the Company an aggregate of $791,742 in
fees for professional services rendered in connection with the audit of the
Company's financial statements for the most recent fiscal year and the reviews
of the financial statements included in each of the Company's Quarterly
Reports on Form 10-Q during Fiscal Year 2000.

Financial Information Systems Design and Implementation Fees

PricewaterhouseCoopers LLP did not render any professional services to the
Company and its affiliates for Fiscal Year 2000 in connection with financial
information systems design or implementation, the operation of the Company's
information system or the management of its local area network.

All Other Fees

PricewaterhouseCoopers LLP billed the Company an aggregate of $1,268,065 in
fees for other services in Fiscal Year 2000 rendered to the Company and its
affiliates in connection with the audit and review services described above.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP.

OTHER MATTERS

The Board of Directors does not know of any other matters which may come
before the Annual Meeting. However, if any other matters are properly
presented at the Annual Meeting, it is the intention of the persons named in
the accompanying proxy to vote, or otherwise act, in accordance with their
judgment on such matters.

All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and
employees, without additional remuneration, may solicit proxies by telephone,
telegraph and personal interviews, and the Company reserves the right to
retain outside agencies for the purpose of soliciting proxies. Brokers,
custodians and fiduciaries will be requested to forward proxy soliciting
material to the owners of stock held in their names, and, as required by law,
the Company will reimburse them for their out-of-pocket expenses in this
regard.

Stockholder Proposals

Proposals of stockholders intended to be presented at the 2002 Annual
Meeting of Stockholders (the "2002 Annual Meeting") must be received by the
Company at its principal offices, 1861 International Drive, McLean, Virginia
22102 not later than March 1, 2002 for inclusion in the proxy materials for
the 2002 Annual Meeting. The Company suggests that proponents submit their
proposals by certified mail, return receipt requested, and proposals must be
addressed to the Secretary of the Company.

If a stockholder of the Company wishes to present a proposal before the 2002
Annual Meeting, but does not wish to have the proposal considered for
inclusion in the Company's proxy statement and proxy card, such stockholder
must also give written notice to the Secretary of the Company at the address
noted above. The Secretary must receive such notice by May 15, 2002. If a
stockholder fails to provide timely notice of a proposal to be presented at
the 2002 Annual Meeting, the proxies designated by the Board of Directors of
the Company will have discretionary authority to vote on any such proposal.

By Order of the Board of Directors,

Sanju K. Bansal,
Vice Chairman, Executive Vice
President, Chief Operating Officer
and Secretary

June 29, 2001

THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. STOCKHOLDERS WHO
ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN IF THEY HAVE SENT IN
THEIR PROXIES.

Appendix A

CHARTER FOR THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF MICROSTRATEGY INCORPORATED

(AS AMENDED AND RESTATED)

Purpose:

The Audit Committee will make such examinations as are necessary to monitor
the corporate financial reporting and the internal and external audits of
MicroStrategy Incorporated and its subsidiaries (the "Company"), to provide to
the Board of Directors the results of its examinations and recommendations
derived therefrom, to outline to the Board improvements made, or to be made,
in internal accounting controls, to nominate independent auditors, and to
provide to the Board such additional information and materials as it may deem
necessary to make the Board aware of significant financial matters that
require Board attention.

In addition, the Audit Committee will undertake those specific duties and
responsibilities listed below and such other duties as the Board of Directors
from time to time prescribe.

Membership:

The Audit Committee will consist of at least two (2) members of the Board,
all of whom shall be independent directors, in accordance with the rules of
the New York Stock Exchange. The members of the Audit Committee will be
appointed by and will serve at the discretion of the Board of Directors.

Responsibilities of the Audit Committee:

The Audit Committee shall assist the board of directors in fulfilling their
responsibilities to shareholders concerning the Company's accounting and
reporting practices, and shall facilitate open communication between the Audit
Committee, board of directors, outside auditors, and management. The Audit
Committee shall discharge its responsibilities, and shall assess the
information provided by the Company's management and the outside auditor, in
accordance with its business judgment. The responsibilities set forth herein
do not reflect or create any duty or obligation of the Audit Committee to
plan, conduct, oversee or determine the appropriate scope of any audit, or to
determine that the Company's financial statements are complete, accurate,
fairly presented, or in accordance with Generally Accepted Accounting
Principles or applicable law. In exercising its business judgment, the Audit
Committee shall rely on the information and advice provided by the Company's
management and/or its outside auditor.

1. The Audit Committee shall review and reassess the adequacy of this
charter at least annually.

2. The outside auditor shall be accountable to the Audit Committee and the
board of directors, which together shall have the ultimate authority and
responsibility to nominate the outside auditor to be proposed for shareholder
approval in any proxy statement, and to select, evaluate, and (where
appropriate) replace the outside auditor.

3. The Audit Committee shall ensure that they receive from the outside
auditor the written disclosures and letter from the outside auditor required
by Independence Standards Board Standard No. 1.

4. The Audit Committee shall discuss with the outside auditor its
independence, and shall actively engage in a dialogue with the outside auditor
regarding any disclosed relationships or services that might impact the
objectivity and independence of the auditor. The Audit Committee shall take,
or recommend that the full board of directors take, appropriate action to
oversee the independence of the outside auditor.

A-1

5. The Audit Committee shall review and discuss with the Company's
management the Company's audited financial statements.

6. The Audit Committee shall discuss with the outside auditor the matters
about which Statement on Auditing Standards No. 61 requires discussion.

7. Based upon its discharge of its responsibilities pursuant to items three
through six above and any other information, discussion or communication that
the Audit Committee in its business judgment deems relevant, the Audit
Committee shall consider whether they will recommend to the board of directors
that the Company's audited financial statements be included in the Company's
annual reports on Forms 10-K.

8. The Audit Committee shall prepare for inclusion where necessary in a
proxy or information statement of the Company relating to an annual meeting of
security holders at which directors are to be elected (or special meeting or
written consents in lieu of such meeting), the report described in Item 306 of
Regulation S-K.

9. The Audit Committee shall annually inform the outside auditor, the Chief
Financial Officer, the Controller, and the most senior other person, if any,
responsible for the internal audit activities, that they should promptly
contact the Audit Committee or its Chairman about any significant issue or
disagreement concerning the Company's accounting practices or financial
statements that is not resolved to their satisfaction. Where such
communications are made to the Chairman, he or she shall confer with the
outside auditor concerning any such communications, and shall notify the other
members of the Audit Committee of any communications which the outside auditor
or the Chairman in the exercise of his or her business judgment believes
should be considered by the Audit Committee prior to its next scheduled
meeting.

10. The Audit Committee shall direct the outside auditor to use its best
efforts to perform all reviews of interim financial information prior to
disclosure by the Company of such information, and to discuss promptly with
the Chairman of the Audit Committee and the Chief Financial Officer any
matters identified in connection with the auditor's review of interim
financial information which are required to be discussed by Statement on
Auditing Standards No. 61. The Chairman of the Audit Committee shall discuss
any such matters with the outside auditor, and shall notify the other members
of the Audit Committee of any discussions which the outside auditor or the
Chairman in the exercise of his or her business judgment believes should be
considered by the Audit Committee prior to disclosure or filing of the interim
financial information, or the Audit Committee's next scheduled meeting.

11. The Audit Committee shall direct management to advise the Audit
Committee in the event that the Company proposes to disclose or file interim
financial information prior to completion of review by the outside auditor.

12. The Audit Committee shall meet privately at least once per year with:
(i) the outside auditor; (ii) the Chief Financial Officer; (iii) the
Controller; and (iv) the most senior person (if any) responsible for the
internal audit activities of the Company.

Meetings:

The Audit Committee will meet at least four (4) times each year. The Audit
Committee may establish its own schedule that it will provide to the Board of
Directors in advance.

The Audit Committee will meet separately with the Chief Executive Officer
and separately with the Chief Financial Officer of the Company at least
annually to review the financial affairs of the Company. The Audit Committee
will meet with the independent auditors of the Company, at such times as it
deems appropriate, to review the independent auditor's examination and
management report.

A-2

Reports:

The Audit Committee will record its summaries of recommendations to the
Board in written form which will be incorporated as a part of the minutes of
the Board of Directors' meeting at which those recommendations are presented.

Minutes:

The Audit Committee will maintain written minutes of its meetings, which
minutes will be filed with the minutes of the meetings of the Board of
Directors.

* * *

This Charter was duly adopted and approved by the Board of Directors of
MicroStrategy Incorporated on September 15, 1997. This Charter was duly
amended by the Board of Directors of MicroStrategy Incorporated on July 3,
2000.

A-3

PROXY PROXY

MICROSTRATEGY INCORPORATED

Proxy for the Annual Meeting of Stockholders to be held July 16, 2001
This Proxy is Solicited on Behalf of the Board of Directors of the Company

The undersigned, revoking all prior proxies, hereby appoint(s) Michael
J. Saylor, Eric F. Brown and Jonathan F. Klein, and each of them, with full
power of substitution, as proxies to represent and vote, as designated herein,
all shares of stock of MicroStrategy Incorporated (the "Company") which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company to be held at the Marriott Dulles
Airport, 45020 Aviation Drive, Dulles, Virginia 20166 on Monday, July 16, 2001
at 9:00 a.m., local time, and at any adjournment thereof (the "Meeting").

In their discretion, the proxies are authorized to vote upon such
other matters as may properly come before the Meeting.

This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is given, this
proxy will be voted FOR all proposals. Attendance of the undersigned at the
Meeting will not be deemed to revoke this proxy unless the undersigned shall
revoke this proxy in writing or shall deliver a subsequently dated proxy to the
Secretary of the Company or shall vote in person at the Meeting.

PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED POSTAGE-PAID
RETURN ENVELOPE.

1. To elect the following eight (8) directors (except as
marked below) for the next year.
5. To approve the issuance of shares of Class A
Nominees: Michael J. Saylor, Sanju K. Bansal, F. David Fowler, Common Stock (i) upon exchange of shares of Series
Frank A. Ingari, Jonathan J. Ledecky, Stuart B. Ross, A Convertible Preferred Stock and (ii) upon
John W. Sidgmore, Ralph S. Terkowitz conversion of shares of Series B Convertible
Preferred Stock, Series C Convertible Preferred Stock,
[ ] FOR all nominees [ ] WITHHOLD authority Series D Convertible Preferred Stock and Series E
Convertible Preferred Stock to be issued in exchange
[ ] FOR all nominees except the following for shares of Series A Convertible Preferred Stock
(including any shares of Class A Common Stock
issuable in lieu of cash dividends thereon).
nominee(s): __________________
For Against Abstain
2. To approve the Amended and Restated 1999 Stock
Option Plan to increase the number of shares of [ ] [ ] [ ]
Class A Common Stock reserved for issuance under
the plan from 11,000,000 to 23,500,000 shares. 6. To approve the issuance of shares of
Class A Common Stock upon conversion of
7 1/2% Series A Unsecured Notes to be
For Against Abstain issued to class members pursuant to the settlement
agreement among the Company, certain of the
[ ] [ ] [ ] Company's officers and directors and plaintiffs'
counsel, approved by the United States District Court
3. To approve the Amended and Restated 1997 Stock for the Eastern District of Virginia on April 2, 2001.
Option Plan for French Employees to increase the
number of shares of Class A Common Stock reserved For Against Abstain
for issuance under the plan from 600,000 to
800,000 shares. [ ] [ ] [ ]

7. To ratify the selection of PricewaterhouseCoopers
For Against Abstain LLP as the Company's independent auditors for the
current fiscal year.
[ ] [ ] [ ]
For Against Abstain
4. To approve the issuance of shares of Class A Common
Stock upon conversion of shares of Series A Convertible
Preferred Stock and as dividends thereon.

For Against Abstain
[_] [_] [_]

[ ] [ ] [ ]

NOTE: Please sign exactly as name appears hereon. If the stock is registered in
the names of two or more persons, each should sign. Executors, administrators,
trustees, guardians, attorneys and corporate officers should add their titles.

Signature:___________ Date:_____, 2001 Signature:____________ Date:______, 2001