SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[x] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting material under Rule 14a-12.

SOURCE INTERLINK COMPANIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

[x] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title to each class of securities to which transaction
applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

SOURCE INTERLINK COMPANIES, INC.
Two CityPlace Drive, Suite 380
St. Louis, Missouri 63141

- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------

To the Shareholders of October 10, 2002
Source Interlink Companies, Inc.: St. Louis, Missouri

The Annual Meeting of the Shareholders of Source Interlink Companies, Inc. will
be held on November 12, 2002 commencing at 10:00 a.m. Central Standard Time at
the offices of the Company at Two City Place Drive, Suite 380, St. Louis,
Missouri 63141, for the following purposes:

1. To elect three Class I directors to each serve a three-year term
until each director's successor has been elected and qualified;

2. To approve an amendment to the Company's 1995 Incentive Stock Option
Plan to increase the number of shares of Common Stock available under
the Stock Plan from 2,770,661 to 3,000,000;

3. To approve an amendment to the Company's 1998 Omnibus Plan to
increase the number of shares of Common Stock available under the
Omnibus Plan from 1,850,000 to 2,000,000; and

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

Only shareholders of record at the close of business on September 24, 2002, will
be entitled to vote at the meeting. A list of all shareholders entitled to vote
at the annual meeting, arranged in alphabetical order and showing the address of
and number of shares held by each shareholder, will be available at the
principal office of Source interlink Companies, Inc., Two City Place Drive,
Suite 380, St. Louis, Missouri 63141, during usual business hours, for
examination by any shareholder for any purpose germane to the annual meeting for
10 days prior to the date thereof. The list of shareholders will also be
available at the meeting for examination at any time during the meeting.

A copy of the Company's 2002 Annual Report and the Company's Quarterly Report on
Form 10-Q for fiscal quarter ended July 31, 2002 accompanies this notice.

By Order of the Board of Directors

/s/ W. Brian Rodgers

W. Brian Rodgers
Secretary

WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, PLEASE MARK, SIGN, DATE,
AND RETURN THE ACCOMPANYING PROXY PROMPTLY. A RETURN ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE.

SOURCE INTERLINK COMPANIES, INC.
Two City Place Drive, Suite 380
St. Louis, Missouri 63141
(314) 995-9040

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PROXY STATEMENT
FOR
2002 ANNUAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------

The enclosed form of proxy is solicited by and on behalf of the Board of
Directors of Source Interlink Companies, Inc. (the "Company") for use at the
Annual Meeting of Shareholders to be held on November 12, 2002 in the offices of
the Company at Two City Place Drive, Suite 380, St. Louis, Missouri 63141,
commencing at 10:00 a.m. Central Standard Time and at any adjournments thereof.
Each shareholder giving the proxy has the power to revoke it any time before it
is exercised by notice in writing to the Secretary of the Company at the
Company's principal executive offices at Two City Place Drive, Suite 380, St.
Louis, Missouri 63141, by properly submitting to the Company a duly executed
proxy bearing a later date, or by attending the meeting and voting in person
(attendance at the meeting will not, in and of itself, revoke the proxy). All
shares entitled to vote and represented by properly executed proxies received
prior to the Annual Meeting, and not revoked, will be voted at the Annual
Meeting in accordance with the instructions indicated on those proxies. If no
instructions are indicated on a properly executed proxy, the shares represented
by that proxy will be voted as recommended by the Board of Directors. If any
other matters are properly presented for consideration at the Annual Meeting,
the persons named in the accompanying proxy and acting thereunder will have
discretion to vote on those matters in accordance with their best judgment. The
Company does not anticipate that any other matters will be raised at the annual
Meeting.

This Proxy Statement and form of proxy card, together with the Company's 2002
Annual Report and Quarterly Report on Form 10-Q for the fiscal quarter ended
July 31, 2002, were first mailed to shareholders of the Company on or around
October 10, 2002. The solicitation of proxies is being made primarily by the use
of the mail. The cost of preparing and mailing this Proxy Statement and
accompanying materials, and the cost of any supplementary solicitations, which
may be made by mail, telephone, telegraph or personally by officers and
employees of the Company and its subsidiaries, will be borne by the Company.

Only shareholders of record at the close of business on September 24, 2002, are
entitled to notice of, and to vote at, the Annual Meeting of Shareholders and
any adjournments thereof. On September 24, 2002 the Company had issued and
outstanding 18,209,445 shares of Common Stock. Each outstanding share is
entitled to one vote on each matter to be voted on at the Annual Meeting of
Shareholders. Shareholders do not have the right to cumulate their votes in the
election of directors. A majority of the outstanding shares of Common Stock
present in person or by proxy will constitute a quorum for the transaction of
business at the Annual Meeting of Shareholders. The Company intends to include
abstentions and broker non-votes as present or represented for purposes of
establishing a quorum for the transaction of business, but to exclude
abstentions and broker non-votes from the calculation of shares entitled to
vote. Votes cast by proxy or in person at the Annual Meeting of Shareholders
will be tabulated by the inspectors of election appointed by the Board for the
meeting.

PROPOSAL 1

ELECTION OF THREE CLASS I DIRECTORS
INFORMATION ABOUT THE NOMINEES AND DIRECTORS CONTINUING IN OFFICE

The Company's Articles of Incorporation and Bylaws currently authorize a Board
of Directors consisting of not less than three (3) nor more than nine (9)
directors, and authorize the directors to increase or decrease the number of
directors comprising the Board of Directors by resolution adopted by the
affirmative vote of a majority of the Board of Directors. Currently the number
of directors has been fixed at seven. The Company's Articles of Incorporation
and Bylaws provide for three classes of directorships serving staggered three
year terms such that approximately one-third of the directors are elected at
each annual meeting of shareholders. Each member of the Board of Directors of
the Company serves in such capacity for a three-year term or until a successor
has been elected and qualified, subject to earlier resignation, removal or
death. The terms of the current Class II and Class III directors expire in 2003
and 2004, respectively. The Board of Directors has nominated Aron Katzman,
Randall S. Minix, and James R. Gillis, who are currently Class III directors,
for election to each serve a three-year term expiring at the annual meeting of
shareholders in 2005. The following table sets forth certain information
concerning Messrs. Katzman, Minix, and Gillis, as well as those directors who
are continuing in office.

NOMINEES FOR DIRECTOR - CLASS I
(TO BE ELECTED TO SERVE A THREE-YEAR TERM)

DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- -----

Aron Katzman 64 Director 1995
Randall S. Minix 52 Director 1995
James R. Gillis 49 President and Chief Operating Officer 2000

Aron Katzman has served as a director of The Source since it commenced
operations in May 1995. Mr. Katzman was a founder of Medicine Shoppe
International, Inc. (Nasdaq) and served on its Board of Directors until it was
purchased by Cardinal Health (NYSE) in 1994. Until its sale in May 1994, Mr.
Katzman served as the Chairman and Chief Executive Officer of Roman Company, a
manufacturer and distributor of fashion custom jewelry. Mr. Katzman is a member
of the board of directors of Foto, Inc. Presently, Mr. Katzman is Chairman and
Chief Executive Officer of Decorating Den of Missouri.

Randall S. Minix is a certified public accountant and has served as a director
of The Source since it commenced operations in May 1995. As of March 1, 2001,
Mr. Minix became the Chief Financial Officer of South Atlantic Lumber Industries
in Greensboro, North Carolina. For more than five years prior thereto, Mr. Minix
had been the managing partner of Minix, Morgan & Company, L.L.P., an independent
accounting firm headquartered in Greensboro, North Carolina.

James R. Gillis became President of The Source in December 1998, was appointed
as a director of The Source in March 2000 and became President and Chief
Operating Officer in August 2000. Prior thereto, he served as the President and
Chief Executive Officer of Brand Manufacturing Corporation.

The Board of Directors recommends that shareholders vote "FOR" the election of
Messrs. Katzman, Minix and Gillis to the Company's Board of Directors.

DIRECTORS CONTINUING IN OFFICE - CLASS II
(TERMS EXPIRING IN 2003)

DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- -----

Harry L. "Terry" Franc, III 66 Director 1995
Kenneth F. Teasdale 67 Director 2000

Harry L. "Terry" Franc, III, has been a director of The Source since it
commenced operations in May 1995. Mr. Franc is one of the founders of Bridge
Information Systems, Inc. ("BIS"), a global provider of information services to
the securities industry and of BIS's subsidiary, Bridge Trading Company ("BTC"),
a registered broker-dealer and member of the New York Stock Exchange. Mr. Franc
has been Executive Vice President of BTC for more than 20 years and for more
than 20 years prior to 1995, served as a director and an Executive Vice
President of BIS. Mr. Franc is a member of the National Organization of
Investment Professionals. He is a director of TV House, Inc. and of the St.
Louis Community Foundation.

Kenneth F. Teasdale has served as a director of The Source since March 2000. Mr.
Teasdale has been the Chairman of Armstrong Teasdale LLP, a law firm, since 1993
and before that was Managing Partner from 1986 to 1993. He has been associated
with Armstrong Teasdale since 1964. Prior thereto, Mr. Teasdale served as
General Counsel to the Democratic Policy Committee of the United States Senate
beginning in 1962. In that position, he also served for three years as Legal
Assistant to the Majority Leader of the United States Senate. Mr. Teasdale is
Chairman of the Board of Regents for St. Louis University, Member of the Board
of Trustees for the St. Louis Science Center, member of the Board of Directors
for the United Way of Greater St. Louis, member of the Board of Trustees for St.
Louis University and member of the Board of Trustees for the St. Louis Art
Museum.

DIRECTORS CONTINUING IN OFFICE - CLASS III
(TERMS EXPIRING IN 2004)

DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- -----

S. Leslie Flegel 65 Chairman and Chief Executive Officer 1995
Robert O. Aders 75 Director 1999

S. Leslie Flegel has been the Chairman of the Board of Directors and Chief
Executive Officer of The Source since its inception in March 1995. For more than
14 years prior thereto, Mr. Flegel was the principal owner and Chief Executive
Officer of Display Information Systems Company ("DISC"), a predecessor of The
Source. S. Leslie Flegel is the father of Jason S. Flegel, The Source's
Executive Vice President, Distribution Services. Mr. Flegel is a director of
eRoomSystem Technologies, Inc.

Robert O. Aders was appointed as a director in March 1999. He is Chairman and
Chief Executive Officer of the Advisory Board, Inc. (an international consulting
organization) and a member of the Board of Directors of Food Marketing
Institute, where he served as President and CEO from its founding in 1976 until
his retirement in 1993. Mr. Aders was the Acting Secretary of Labor in the Ford
administration, is a former advisor to the White House Office of Emergency
Preparedness and has served on the U.S. Wage and Price Commission and as a Vice
Chairman of the National Business Council for Consumer Affairs. From 1970 to
1974, Mr. Aders was Chairman of the Board of The

Kroger Co., where he served in various executive positions beginning in 1957.
Mr. Aders is also a member of the Board of Directors of Spar Group, Inc.,
Surebeam Corporation and Telepanel Systems, Inc.

During fiscal 2002, six meetings of the Board of Directors were held. Each
director attended 75 percent or more of the aggregate of (i) the total number of
meetings held during fiscal year 2002 and (ii) the total number of meetings held
during such period by all committees of the Board of Directors on which he
served.

The Board of Directors evaluates and nominates qualified nominees for election
or appointment as Directors and qualified persons for selection as senior
officers. The Board of Directors will give appropriate consideration to a
written recommendation by a shareholder for the nomination of a qualified person
to serve as a Director of the Company, provided that such recommendation
contains sufficient information regarding the proposed nominee for the Board of
Directors to properly evaluate such nominee's qualifications to serve as
Director.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board has established an Audit Committee, a Compensation Committee, a
Finance Committee and an Acquisition Committee. During fiscal 2002, the Audit
Committee and the Compensation Committee each held three meetings. The duties
and members of each of these committees are indicated below.

- The Audit Committee is comprised of three non-employee directors, presently
Messrs. Minix, Katzman and Franc, and has the responsibility of
recommending the firm that will serve as the Company's independent
auditors, reviewing the scope and results of the audit and services
provided by the independent auditors and meeting with the financial staff
to review accounting procedures and policies.

- The Compensation Committee is comprised of three non-employee directors,
presently Messrs. Katzman, Aders and Minix, and has been given the
responsibility of reviewing the Company's financial records to determine
overall compensation and benefits for executive officers and to establish
and administer the policies which govern employee salaries and benefit
plans.

- The Finance Committee is comprised of two directors, Messrs. Franc and
Katzman. The Finance Committee has been given the responsibility of
monitoring the Company's capital structure, reviewing available
alternatives to satisfy the Company's liquidity and capital requirements
and recommending the firm or firms which will provide investment banking
and financial advisory services to the Company.

- The Acquisition Committee is comprised of four directors, presently Messrs.
Franc, Katzman, Aders and Minix, and has been given the responsibility of
monitoring the Company's search for attractive acquisition opportunities,
consulting with members of management to review plans and strategies for
the achievement of the Company's external growth objectives and
recommending the firm or firms that will serve as advisors to the Company
in connection with the evaluation of potential business combinations.

DIRECTOR COMPENSATION

Under the Company's present policy, each director of the Company who is
not also an employee receives $25,000 annually payable quarterly in either cash
or shares of Common Stock valued at 90% of the last reported sale price on the
date of grant as of the payment date. Directors also annually receive options to
purchase 10,000 shares of Common Stock at an exercise price equal to the last
reported sale price on the date of grant. Directors are also entitled to be
reimbursed for expenses incurred by them in attending meetings of the Board and
its committees.

SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND PRINCIPAL STOCKHOLDERS

The following table sets forth as of August 31, 2002, certain information
concerning the ownership of Common Stock (1) by each person who is known to the
Company to own beneficially 5.0% or more of the outstanding Common Stock, (2) by
each director and current executive officer named in the compensation table and
(3) by all directors and executive officers as a group. As of August 31, 2002,
there were 18,202,845 shares of Common Stock outstanding.

BENEFICIAL OWNERSHIP
--------------------
NAME AND ADDRESS
OF BENEFICIAL OWNER NUMBER OF SHARES(1) PERCENT
- ------------------- ------------------- -------

Jonathan J. Ledecky 2,640,000 14.5%
800 Connecticut Avenue NW, Suite 1111
Washington, D.C. 20006

S. Leslie Flegel 2,156,226(2) 11.1
Two CityPlace Drive, Suite 380
St. Louis, Missouri 63141

FMR Corporation 1,230,900(3) 6.8
82 Devonshire Street
Boston, Massachusetts, 02109

JP Morgan Chase & Company 1,031,320(4) 5.7
500 Stanton Christina Road
Newark, Delaware 19713

James R. Gillis 576,501(2) 3.1
10 East 40th Street, Suite 3110
New York, New York 10016

Aron Katzman 340,967(2) 1.9
10 Layton Terrace
St. Louis, Missouri 63124

Monte Weiner 435,335(2) 2.3
10 East 40th Street, Suite 3110
New York, New York 10016

Jason S. Flegel 266,527(2) 1.5
6195 Lusk Boulevard
San Diego, California 92121

Harry L. Franc, III 122,505(2) *
19 Briarcliff
St. Louis, Missouri 63124

Robert O. Aders 90,000(2) *
132 S. Delancey Place
Atlantic City, New Jersey 08401

Randall S. Minix 77,974(2) *
5502 White Blossom Drive
Greensboro, North Carolina 27410

Kenneth F. Teasdale 68,243(2) *
33 Kingsbury Place
St. Louis, Missouri 63112

Frank Bishop 72,485(2) *
27500 Riverview Center Boulevard
Bonita Springs, Florida 34134

All directors and executive 4,370,004(2)(5) 20.7
officers as a group (13 persons)

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

(1) Under the rules of the Commission, the shares of the Company's Common
Stock which a person has the right to acquire within 60 days after
August 31, 2002 in connection with the exercise of stock options and
warrants are deemed to be outstanding for the purpose of computing
beneficial ownership and the percentage of ownership of that person.
(2) Includes exercisable options to acquire shares of Common Stock in the
following amounts per beneficial owner: S. Leslie Flegel - 1,274,256
shares; James R. Gillis - 568,000 shares; Aron Katzman - 50,000 shares;
Monte Weiner - 435,335 shares; Jason S. Flegel - 152,758 shares; Harry
L. Franc, III - 60,000 shares; Robert O. Aders - 60,000 shares; Randall
S. Minix - 60,000 shares; Kenneth F. Teasdale - 30,000; and Frank
Bishop - 72,485 shares.
(3) This amount, as of February 14, 2002, as reflected on correspondence
from FMR Corporation, consists of sole voting power with respect to -0-
shares, sole dispositive power with respect to 1,230,900 shares and no
shared voting or dispositive power.
(4) This amount, as of February 26, 2002, as reflected on correspondence
from JP Morgan Chase & Company, consists of sole voting power with
respect to 1,012,320 shares, sole dispositive power with respect to
1,031,320 shares and no shared voting or dispositive power.
(5) Includes options and warrants to acquire 163,242 shares of Common
Stock, excluded in the names indicated in the footnotes above.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company during its most recent fiscal year and Form 5 and amendments
thereto, or written representations that no Form 5 is required, all executive
officers and directors of the Company timely filed with the Securities and
Exchange Commission all reports required by Section 16(a) of the Securities
Exchange Act of 1934 except that Messrs. Teasdale, Weiner, Aders and Minix
failed to timely file a Form 4, Statement of Changes in Beneficial Ownership.
All such reports have since been filed.

EXECUTIVE OFFICERS

The following table sets forth certain information concerning the executive
officers of the Company who are not also directors of the Company:

NAME AGE POSITION
- ---- --- --------

Robert Arquilla 49 Vice-President - Human Resources

Frank Bishop 51 Senior Vice President - North American Sales

John D'Aloia 47 Executive Vice President, Chief Marketing Officer

Jason S. Flegel 37 Executive Vice President, Distribution Services

W. Brian Rodgers 37 Secretary and Chief Financial Officer

Monte Weiner 52 President and Chief Executive Officer - Source Display

ROBERT ARQUILLA joined the Company as Vice President, Human Resources in January
2002. Prior to joining the Company, Mr. Arquilla worked for Safety-Kleen Corp.
where he held the office of Senior Vice President, Administration for 17 years.

FRANK BISHOP has served the Company since 1995, most recently as Senior Vice
President, Sales. Prior to joining the Company, Mr. Bishop served as the
Director of Sales & Marketing for Triangle News Co, a wholesale distributor of
books and magazines.

JOHN D'ALOIA joined the Company as Executive Vice President, Chief Marketing
Officer in February 2002. Prior to joining the Company, Mr. D'Aloia worked for
Hearst Distribution Corporation where he held the office of Executive Vice
President for Hearst Distribution Group since 1990, and simultaneously served as
Senior Vice President of COMAG Marketing Group. Prior to that, he worked for
Time Inc. Magazine Division of AOL Time Warner for 14 years where he held a
variety of positions including New York Regional Sales Director for People
Magazine.

JASON S. FLEGEL has served as Executive Vice President, Information Services
since June 1996. Prior thereto, and since the Company's inception in March 1995,
he served as Vice President-- Western Region. For more than two years prior
thereto, Mr. Flegel was an owner and the Chief Financial Officer of DISC. Jason
S. Flegel is the son of S. Leslie Flegel.

W. BRIAN RODGERS has served as Secretary and Chief Financial Officer since
October 1996. Prior to joining The Source, Mr. Rodgers practiced for seven years
as a Certified Public Accountant with BDO Seidman, LLP.

MONTE WEINER has served as President and Chief Executive Officer - Source
Display since August 2000. Prior thereto, Mr. Weiner served as Executive Vice
President and Chief Executive Officer - Source Display from September 1999 until
May 2000. For more than 15 years prior thereto, Mr. Weiner served as President
of TCE Corporation and Secretary and Treasurer of Brand Manufacturing
Corporation.

EXECUTIVE COMPENSATION

The following table summarizes information concerning cash and non-cash
compensation paid to or accrued for the benefit of the named executive officers,
in the fiscal years indicated, for all services rendered in all capacities to
the Company.

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
SECURITIES
NAME OF PRINCIPAL FISCAL UNDERLYING ALL OTHER
POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION(1)($)
- -------------------- ----- ---------- --------- ------------- ------------------

S. Leslie Flegel 2002 $455,000 $200,000 450,000 $ 5,450
Chief Executive Officer 2001 455,000 359,217 -- 5,450
2000 330,000 140,000 525,000 5,450

James R. Gillis 2002 $350,000 $250,000 250,000 $ 970
President 2001 300,000 250,000 200,000 970
2000 250,000 250,000(2) -- 2,860

Monte Weiner 2002 $300,000 $150,000 200,000 --
Executive Vice President & 2001 241,000 250,000 200,000 --
CEO - Source Display 2000 150,000 100,000 25,000 --

Jason S. Flegel 2002 $204,000 $ -- 131,000 $ 981
Executive Vice President 2001 155,000 50,000 50,000 381
2000 125,000 16,000 50,000 381

Frank Bishop 2002 $204,000 $ -- 20,000 --
Executive Vice President, 2001 185,000 -- 50,000 --
Sales 2000 120,000 5,000 30,000 --

- ----------

(1) In fiscal 2002, the estimated incremental cost to the Company of life
insurance premiums paid on

behalf of Messrs. Flegel, Gillis, Weiner, J. Flegel and Bishop was $5,450,
$970, $0, $981 and $0, respectively. In fiscal 2001, the estimated
incremental cost to the Company of life insurance premiums paid on behalf
of Messrs. Flegel, Gillis, Weiner, J. Flegel and Bishop was $5,450, $970,
$0, $381 and $0, respectively. In fiscal 2000, the estimated incremental
cost to the Company of life insurance premiums paid on behalf of Messrs.
Flegel, Gillis, Weiner, J. Flegel and Bishop was $5,450, $2,860, $0, $381
and $0, respectively.
(2) Includes $100,000 bonus accrued in fiscal year 2000, but paid in fiscal
year 2001, which was inadvertently not included in the proxy statement
dated September 22, 2000.

OPTIONS GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS

- ------------------------------------------------------------------------------------------------------------------------------
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Securities Options Stock Price Appreciation
Underlying Granted to Exercise or for Option Term
Options Employees in Base Price Expiration -----------------------------------------
Name Granted # Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ------------------------------------------------------------------------------------------------------------------------------

S. L. Flegel 300,000(1) 13% 5.00 02-05-11 943,342 2,390,614
S. L. Flegel 150,000(2) 6% 4.35 07-11-11 410,354 1,039,917
James R. Gillis 100,000(3) 4% 5.00 02-05-11 314,447 796,871
James R. Gillis 100,000(3) 4% 4.35 07-11-11 273,569 693,278
James R. Gillis 50,000(4) 2% 4.21 12-05-11 132,382 335,483
Monte Weiner 50,000(1) 2% 5.00 02-05-11 157,224 398,436
Monte Weiner 50,000(3) 2% 4.35 07-11-11 136,785 346,639
Monte Weiner 100,000(4) 4% 4.21 12-05-11 264,765 670,966
Jason Flegel 50,000(1) 2% 5.00 02-05-11 157,224 398,436
Jason Flegel 50,000(2) 2% 4.35 07-11-11 136,785 346,639
Jason Flegel 31,000(5) 1% 4.21 12-05-11 82,077 207,999
Frank Bishop 20,000(1) 1% 5.00 02-05-11 62,889 159,374
- ------------------------------------------------------------------------------------------------------------------------------

(1) Options were granted February 6, 2001 and are exercisable as to 100,000
shares immediately, another 100,000 shares on February 6, 2002 and the
final 100,000 shares on February 6, 2003.
(2) Options were granted July 12, 2001 and vest in three equal annual
installments.
(3) Options were granted February 6, 2001 and vest 33.33% immediately, 33.33%
on August 1, 2001 and the remainder on August 1, 2002.
(4) Options were granted July 12, 2001 and vest 33.33% immediately, 33.33% on
August 1, 2002 and the remainder on August 1, 2003.
(5) Options were granted December 6, 2001 and vest in three equal annual
installments.

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

- -------------------------------------------------------------------------------------------------------------------------------
Value of Unexercised
Number of Unexercised In-the-Money Options(1)
Shares Options at Fiscal Year at Fiscal Year End ($)
Acquired on Value End (#) Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------------------------

S. Leslie Flegel 0 0 1,003,006 / 421,250 448,292 / 170,300
James R. Gillis 0 0 418,667 / 166,000 101,501 / 77,999
Monte Weiner 0 0 283,334 / 183,333 73,000 / 98,500
Jason Flegel 0 0 90,758 / 159,333 60,679 / 145,418
Frank Bishop 0 0 36,485 / 45,333 9,636 / 4,600
- -------------------------------------------------------------------------------------------------------------------------------

(1) "In-the-Money" options are options whose exercise price was less than the
market price of Common Stock at January 31, 2002.

EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVE OFFICERS

In February 2001, we entered into an employment agreement with S. Leslie Flegel,
which expires January 31, 2004. Under the agreement, Mr. Flegel serves as the
Chairman of the Board and Chief Executive Officer of The Source for an initial
annual base rate of compensation (the "Base Compensation") of $425,000. For the
fiscal years beginning February 1, 2002 and February 1, 2003, the Base
Compensation shall be increased to $500,000. Mr. Flegel will also be entitled to
receive a bonus ("Annual Bonus") each year of up to 100% of his Base
Compensation for such year if certain performance goals are met. The Company
granted to Mr. Flegel options to purchase an aggregate of 300,000 shares of our
common stock (the "Option") at an exercise price of $5.00. The options vest
100,000 immediately upon the granting of the options, another 100,000 shares on
February 6, 2002 and as to 100,000 shares on February 5, 2003. In the event the
employment of Mr. Flegel with The Source is terminated for reasons other than
for cause, permanent disability or death or there occurs a significant reduction
in the position, duties or responsibilities thereof (a "Termination") following
a "Hostile Change of Control" (as defined in the employment agreement), Mr.
Flegel will be entitled to a Severance Bonus equal to the sum of (i) the
aggregate of the Base Compensation that would be earned by Mr. Flegel had he
remained in The Source's employ from the date of such termination until January
31, 2004 (the "Remaining Term") and (ii) an amount equal to the aggregate Annual
Bonus Mr. Flegel would have earned for the Remaining Term if all criteria for
payment of the Annual Bonus were achieved at maximum levels for each of the
periods within the Remaining Term. Mr. Flegel also will agree to refrain from
disclosing information confidential to The Source or engaging, directly or
indirectly, in the rendering of services competitive with those offered by The
Source during the term of his employment and for one year thereafter, without
the prior written consent of The Source and will receive $250,000 in
consideration.

In August 2000, we entered into an employment agreement with James R. Gillis,
which expires January 30, 2006 (subject to renewal). The employment agreement
provides that Mr. Gillis serves as President of The Source and receives annual
base compensation of $385,000. In addition, Mr. Gillis IS

entitled to receive a guaranteed bonus of $250,000 for each of the fiscal years
2001, 2002, 2003, 2004, 2005 and 2006 as long as he is an employee of The Source
at the agreed upon date of payment. Mr. Gillis may also receive a discretionary
bonus of $100,000 for each of the fiscal years 2001, 2002, 2003, 2004, 2005 and
2006 at the discretion of the Compensation Committee of the Board of Directors.
The Company will also grant Mr. Gillis options to purchase an aggregate of
200,000 shares of our common stock at an exercise price of $7.84. The options
shall vest as to 66,667 shares immediately upon the granting of the options,
another 66,666 shares on August 1, 2001, and as to 66,666 shares on August 1,
2002. In the event the employment of Mr. Gillis is terminated for reasons other
than cause, permanent disability or death, Mr. Gillis will be entitled to
receive the remainder of his base salary and benefits for the balance of the
term of the agreement. Mr. Gillis agreed to refrain from disclosing information
confidential to The Source during the term of the employment agreement and
agreed not to engage, directly or indirectly, in the rendering of services
competitive with those offered by The Source during the term of his employment
and for two years thereafter.

In August 2000, we entered into an employment agreement with Monte Weiner, which
expires July 31, 2003 (subject to renewal). The employment agreement provides
that Mr. Weiner serves as President/Chief Executive Officer of Source Display
and receives annual base compensation of $300,000. Also, as an inducement to
accept employment, Mr. Weiner received a signing bonus of $100,000 upon
execution of his employment agreement. In addition, Mr. Weiner is entitled to
receive a guaranteed bonus of $150,000 for each of fiscal 2001, 2002 and 2003,
as long as he is an employee of The Source at the agreed upon date of payment.
Mr. Weiner may also receive a discretionary bonus of $100,000 for each of fiscal
2001, 2002 and 2003 at the discretion of the Compensation Committee of the Board
of Directors. The Company will also grant Mr. Weiner options to purchase an
aggregate of 200,000 shares of our common stock at an exercise price of $7.84.
The options shall vest as to 66,666 shares immediately upon the granting of the
options, another 66,666 shares on August 1, 2001, and as to 66,667 shares on
August 1, 2002. In the event the employment of Mr. Weiner is terminated for
reasons other than cause, permanent disability or death, Mr. Weiner will be
entitled to receive the remainder of his base salary and benefits for the
balance of the term of the agreement. Mr. Weiner agreed to refrain from
disclosing information confidential to The Source during the term of the
employment agreement and agreed not to engage, directly or indirectly, in the
rendering of services competitive with those offered by The Source during the
term of his employment and for two years thereafter.

In January 2001, we entered into an employment agreement with Jason S. Flegel,
which expires January 31, 2004, and thereafter automatically continues for
additional one year terms unless terminated by either the executive or us. The
employment agreement provides that Mr. Flegel serves as Executive
Vice-President, Information Services of The Source and receives annual base
compensation of $204,000, subject to annual adjustment by the Board. In
addition, Mr. Flegel may also receive a discretionary bonus of up to $100,000 at
the discretion of the Compensation Committee of the Board of Directors. The
Company will also grant Mr. Flegel stock options to purchase 50,000 shares of
our common stock at $3.6875. Such options shall vest with respect to 16,667
shares on each of February 1, 2002 and 2003 and 16,666 shares on February 1,
2004. Mr. Flegel agreed to refrain from disclosing information confidential to
The Source during the term of the employment agreement and agreed not to engage,
directly or indirectly, in the rendering of services competitive with those
offered by The Source during the term of his employment and for two years
thereafter.

In June 2001, the Company and Frank Bishop agreed upon an arrangement under
which Mr. Bishop will serve as Senior Vice President North American Sales of The
Source in exchange for annual base compensation of $204,000. In addition, Mr.
Bishop will also be entitled to receive a bonus based upon

the performance of booked sales of certain divisions of our business, not to
exceed 50% of his salary. Also, subject to approval by the Compensation
Committee of the Board, 20,000 options will be granted at market value each year
if sales in those divisions meet budget and an additional 20,000 options will be
issued at market value if budget is exceeded by 20%.

REPORT OF THE COMPENSATION COMMITTEE REGARDING EXECUTIVE COMPENSATION

GENERAL

The Company's executive compensation program is administered by the Compensation
Committee of the Board of Directors (the "Committee") which is composed of
Messrs. Aders, Katzman and Minix.

The Company's executive compensation policy is designed and administered to
provide a competitive compensation program that will enable the Company to
attract, motivate, reward and retain executives who have the skills, education,
experience and capabilities required to discharge their duties in a competent
and efficient manner. The Company's compensation policy is based on the
principle that the financial rewards to the executives should be aligned with
the financial interests of the stockholders by striving to create a suitable
long-term return on their investment through earnings from operations and
prudent management of the Company's business and operations.

The Company's executive compensation strategy consists of salary and incentive
compensation. The following is a summary of the policies underlying each
element.

ANNUAL COMPENSATION

The annual compensation salary for individual executive officers of the Company
is based upon the level and scope of the responsibility of the office, the pay
levels of similarly positioned executive officers among companies competing for
the services of such executives and a consideration of the level of experience
and performance profile of the particular executive officer. Based upon its
review and evaluation, the Committee makes a recommendation to the Board of
Directors of the salary to be paid to each executive officer.

LONG TERM INCENTIVE COMPENSATION

The Committee believes that long-term incentive compensation is the most
effective way of tying executive compensation to increases in stockholder value.
The Committee utilizes both cash- and stock-based awards, thereby providing a
means through which executive officers will be given incentives to continue high
quality performance with the Company over a long period of time while allowing
such executive officers to build a meaningful investment in the Company's Common
Stock.

In 1995, the Company adopted its 1995 Employee Stock Option Plan (the "Plan").
Under the Plan, the participating executive officers each received an initial
grant of stock options. Additional options in addition to cash bonuses were
granted in fiscal 2002 to certain executive officers pursuant to the
recommendation of the Committee.

COMPENSATION OF CHIEF EXECUTIVE OFFICER

Mr. Flegel's salary, bonus and stock options for fiscal 2002 were determined by
the Committee in the same manner as is used by the Committee for executive
officers generally. In addition, the Committee

considered Mr. Flegel's role in the Company successfully completing significant
strategic acquisitions. The Committee believes that Mr. Flegel's compensation is
competitive within the industry and, when combined with Mr. Flegel's substantial
ownership of the Company's Common Stock, provides incentives for performance
that are aligned with the financial interests of the stockholders of the
Company.

THE COMPENSATION COMMITTEE

ROBERT O. ADERS ARON KATZMAN RANDALL S. MINIX

PERFORMANCE GRAPH

The graph below compares the cumulative total stockholder return on Source
Interlink Companies, Inc.'s Common Stock against the cumulative total return of
companies listed on The Nasdaq Stock Market (US) and the Nasdaq Non-Financial
Stocks Index. The graph is based on the market price of Common Stock for all
companies at January 31 each year and assumes that $100 was invested on January
31, 1996 in Source Interlink Companies, Inc. Common Stock and the common stock
of all companies and that dividends were reinvested for all companies.

[LINE GRAPH]

1/31/1997 1/31/1998 1/31/1999 1/31/2000 1/31/2001 1/31/2002
--------- --------- --------- --------- --------- ---------

Nasdaq US $100 $118 $185 $288 $202 $142
Nasdaq Non-Financial Stocks $100 $114 $185 $303 $206 $138
The Source Information Management Company $100 $245 $484 $732 $266 $253

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

From time to time, we and our predecessors have engaged in various transactions
with our directors, executive officers and other affiliated parties. No such
transactions have occurred since the beginning of our last fiscal year.

PROPOSAL 2
AMENDMENT TO THE COMPANY'S 1995 INCENTIVE STOCK OPTION PLAN

On September 20, 2002, the Board of Directors of the Company adopted an
amendment to the Stock Plan and directed that the Stock Plan as amended be
submitted to the shareholders for their approval. The amendment provides for an
increase in the number of shares of the Company's Common Stock available under
the Stock Plan by 229,339 shares. The amendment will become effective upon
approval by the holders of at least a majority of the shares of the Common Stock
voting at the Annual Meeting. The Stock Plan as amended is attached as Exhibit A
to this Proxy Statement.

GENERAL

The purpose of the Stock Plan is to motivate employees of the Company and its
subsidiaries through incentives inherent in stock ownership by providing the
opportunity to obtain or increase proprietary interest in the Company on a
favorable basis through options to purchase stock granted under the Stock Plan.
The purpose of the proposed amendment to the Stock Plan is to increase the
number of available shares so as to enable the Company to continue the Stock
Plan in future years. The Stock Plan became effective on August 23, 1995. The
maximum number of shares that may be issued under the Stock Plan is now
2,770,661 shares of Common Stock of which all shares have been issued or
reserved for issuance. In the event there is a lapse, expiration, termination,
or cancellation of any benefit awarded under the Stock Plan and the shares
represented by such benefit either are not issued or are subsequently reacquired
by the Company, such shares may be again available to be used in connection with
the Stock Plan without being charged against the limitation of the number of
authorized shares under the Stock Plan. The shares currently authorized have
been and, if Proposal 2 is approved, the additional shares will be registered
under the Securities Act of 1933, as amended. The closing price of the Company's
Common Stock on September 24, 2002 the Nasdaq National Market was $5.44 per
share.

The Compensation Committee of the Board of Directors serves as the Administrator
of the Stock Plan (the "Administrator") and has the exclusive authority to
determine the type of options awarded (incentive stock options ("ISO") or
non-qualified stock options ("NQSO")); to determine the terms and conditions of
all options; to construe and interpret the Stock Plan and the options granted
under it; to determine the time or times an option may be exercised, the number
of shares as to which an option may be exercised at any one time, and when an
option may terminate; to establish, amend and revoke rules and regulations
relating to the Stock Plan and its administration; and to correct any defect,
supply any omission, or reconcile any inconsistency in the Stock Plan or any
option agreement.

Since October 23, 2000, the Company consummated the acquisitions of The
Interlink Companies, Inc. (and its operating companies, including International
Periodical Distributors, Inc. and David E. Young, Inc.) and Innovative Metal
Fixtures, Ltd. These acquisitions have substantially increased the Company's
size and complexity, and have resulted in the Company's retention of a number of
new executive officers and other key employees. Options granted to attract,
motivate and retain these new employees, together with options granted to the
Company's continuing key employees, have exhausted the number of shares of
Common Stock currently authorized for issuance under the Stock Plan. The Board
of Directors believes that the availability of the proposed additional
authorized shares of Common Stock under the Stock Plan will enable it to
continue to attract, motivate and retain key employees for the Company.

OPTIONS

All employees of the Company who are not members of the Compensation Committee
are eligible to receive options under the Stock Plan. The Compensation Committee
determines the employees to whom

options are granted, the time or times such options are granted, the number of
shares to be subject to each option and the times when each option may be
exercised.

Options entitle a participant to purchase shares of Common Stock at a price per
share equal to the market value of the Common Stock on the date the option is
granted. However, if an ISO is granted and the participant receiving the ISO
owns more than 10% of the total combined voting power of all classes of stock of
the Company, the purchase price shall not be less than one hundred and ten
percent of the market value of the Common Stock on the date the ISO is granted.

Any outstanding option and all unexercised rights thereunder shall expire and
terminate automatically upon the earliest of: (i) the cessation of the
employment or engagement of the participant by the Company for any reason other
than retirement (under normal Company policies), death or disability; (ii) the
date which is 3 months following the effective date of the participant's
retirement from the Company's service; (iii) the date which is 1 year following
the date on which the participant's service with the Company ceases due to death
or disability; (iv) the date of expiration of the option determined by the
Administrator at the time the option is granted and specified in such option; or
(v) the 10th annual anniversary date of the granting of the option, or, if and
when an ISO is granted participant owns more than 10% of the total combined
voting power of all classes of stock of the Company, then on the 5th such
anniversary.

Options are exercisable on the terms determined by the Administrator at the time
of the grant. The option price is payable in full upon exercise of an option and
may be paid in cash or, if permitted by the Administrator, by tendering shares
of Common Stock of the Company already owned by the participant. Options granted
under the Stock Plan are nontransferable and nonassignable by a participant
other than by will or by the laws of descent and distribution, and are
exercisable during the participant's lifetime only by the participant.

CHANGE OF CONTROL

The Stock Plan provides for the accelerated exercisability of options in the
event of a merger, consolidation, acquisition, sale or transfer of assets,
tender, or exchange offer or other reorganization in which the Company does not
survive as an independent company.

AMENDMENT; TERMINATION

The Board of Directors may amend the Stock Plan at any time, except that the
Board may not, without the approval of the shareholders, materially increase the
benefits accruing to participants under the Stock Plan, increase the number of
shares of Common Stock in the aggregate which may be issued under the Stock
Plan, except as provided by the Stock Plan, or materially modify the
requirements as to eligibility for participation in the Stock Plan.

The Board of Directors may terminate or suspend the Stock Plan at any time. The
Stock Plan currently will terminate automatically on August 23, 2005. No
benefits may be awarded under the Stock Plan after its termination. Except as
provided by the Stock Plan, amendment, suspension or termination of the Stock
Plan will not alter or impair any rights or obligations under options previously
granted under the Stock Plan.

FEDERAL TAX CONSEQUENCES

INCENTIVE STOCK OPTIONS. A participant who exercises an ISO while employed by
the Company or within the 3 month (1 year for disability) period after
termination of employment, will not recognize any ordinary income at that time.
If the shares acquired upon the exercise are not disposed of until more than 1
year after the date of the exercise, and more than 2 years after the date the
ISOs were granted, the excess of the sale proceeds over the aggregate option
price of such shares will be treated as long-term capital gain to the
participant. If the shares acquired on exercise of the ISOs are disposed of
prior to such dates (a "disqualifying disposition"), the excess of the fair
market value of the shares at the time of exercise over the aggregate option
price (but not more than the gain on the disposition if the disposition is a
transaction on which a loss, if realized, would be recognized) will be ordinary
income to the participant at the time of such disqualifying disposition. The
Company will be entitled to a federal tax deduction in a like amount, subject to
the limitation on deductions discussed below. If an ISO is exercised more than 3
months (1 year for disability) after termination of employment, the participant
will recognize ordinary income equal to the difference between the option price
and the fair market value of the stock received on the date of exercise. The
Company would be allowed a deduction for a like amount in such case, subject to
the limitation on deductions discussed below.

For purpose of the alternative minimum tax on individuals, on exercise of an
ISO, the difference between the fair market value of the stock on the date of
exercise and the amount paid for the stock will be treated as taxable.

A participant does not recognize any taxable income on the grant or exercise of
an ISO. However, if there is a disqualifying disposition of stock received on
the exercise of an ISO, the Company may deduct from income in the year of the
disqualifying disposition an amount equal to the amount that the participant
recognizes as ordinary income due to the disqualifying disposition, subject to
the limitation on deductions discussed below.

NONQUALIFIED STOCK OPTIONS. A participant will not realize any income at the
time an NQSO is granted, nor will the Company be entitled to a deduction at that
time. Upon exercise of an NQSO, the participant will recognize ordinary income
(whether the NQSO price is paid in cash or by the surrender of previously owned
Common Stock) in an amount equal to the difference between the option price and
the fair market value of the shares to which the NQSO pertains. The Company will
be entitled to a tax deduction in an amount equal to the amount of ordinary
income realized by the participant, subject to the limitation on deductions
discussed below.

LIMITATION ON DEDUCTIONS. Section 162(m) of the Internal Revenue Code of 1986,
as amended, limits to $1 million per year the federal income tax deduction
available to a public company for compensation paid to its chief executive
officer or any of its other four highest paid officers unless certain
requirements are met. The Stock Plan does not meet the requirements of Section
162(m) and it is possible that certain compensation paid under the Stock Plan
would not be deductible in the future. However, the Company currently believes
that all amounts under the Stock Plan will be deductible because the
compensation of the officers will either not exceed the limit under Section
162(m) or part of the compensation will be paid under the Performance Plan for
Executives which does meet the requirements of Section 162(m).

The Board of Directors recommends that the shareholders vote "FOR" the proposed
amendment.

PROPOSAL 3
AMENDMENT TO THE COMPANY'S 1998 OMNIBUS PLAN

On September 20, 2002, the Board of Directors of the Company adopted an
amendment to the Company's 1998 Omnibus Plan and directed that the Omnibus Plan
as amended be submitted to the shareholders for their approval. The amendment
provides for an increase in the number of shares of the Company's Common Stock
available under the Omnibus Plan by 150,000 shares. The amendment will become
effective upon approval by the holders of at least a majority of the shares of
the Common Stock voting at the Annual Meeting. The Omnibus Plan as amended is
attached as Exhibit B to this Proxy Statement.

GENERAL

The purpose of the Omnibus Plan is to motivate employees of the Company and its
subsidiaries through incentives inherent in stock ownership by providing the
opportunity to obtain or increase their proprietary interest in the Company on a
favorable basis through options to purchase stock granted under the Omnibus
Plan. The purpose of the proposed amendment to the Omnibus Plan is to increase
the number of available shares so as to enable the Company to continue the
Omnibus Plan in future years. The Omnibus Plan became effective on February 1,
1998. The maximum number of shares that may be issued under the Omnibus Plan is
now 1,850,000 shares of Common Stock of which all shares have been issued or
reserved for issuance. In the event there is a lapse, expiration, termination,
or cancellation of any benefit awarded under the Omnibus Plan and the shares
represented by such benefit either are not issued or are subsequently reacquired
by the Company, such shares may be again available to be used in connection with
the Omnibus Plan without being charged against the limitation of the number of
authorized shares under the Omnibus Plan. The shares currently authorized have
been and, if Proposal 3 is approved, the additional shares will be registered
under the Securities Act of 1933, as amended. The closing price of the Company's
Common Stock on September 24, 2002 the Nasdaq National Market was $5.44 per
share.

The full Board of Directors serves as the Administrator of the Omnibus Plan (the
"Administrator") and has the exclusive authority to determine the terms and
conditions of all options; to construe and interpret the Omnibus Plan and the
options granted under it; to determine the time or times an option may be
exercised, the number of shares as to which an option may be exercised at any
one time, and when an option may terminate; to establish, amend and revoke rules
and regulations relating to the Omnibus Plan and its administration; and to
correct any defect, supply any omission, or reconcile any inconsistency in the
Omnibus Plan or any option agreement.

Since October 23, 2000, the Company consummated the acquisitions of The
Interlink Companies, Inc. (and its operating companies, including International
Periodical Distributors, Inc. and David E. Young, Inc.) and Innovative Metal
Fixtures, Ltd. These acquisitions have substantially increased the Company's
size and complexity, and have resulted in the Company's retention of a number of
new executive officers and other key employees. Options granted to attract,
motivate and retain these new employees, together with options granted to the
Company's continuing key employees, have exhausted the number of shares of
Common Stock currently authorized for issuance under the Omnibus Plan. The Board
of Directors believes that the availability of the proposed additional
authorized shares of Common Stock under the Omnibus Plan will enable it to
continue to attract, motivate and retain key employees for the Company.

OPTIONS

All employees, officers and directors of the Company are eligible to receive
options under the Omnibus Plan. The Board of Directors determines the employees,
officers and directors to whom options are

granted, the time or times such options are granted, the number of shares to be
subject to each option and the times when each option may be exercised.

Options entitle a participant to purchase shares of Common Stock at a price per
share equal to the market value of the Common Stock on the date the option is
granted.

Any outstanding option and all unexercised rights thereunder shall expire and
terminate automatically upon the earliest of: (i) the cessation of the
employment or engagement of the participant by the Company for any reason other
than retirement (under normal Company policies), death or disability; (ii) the
date which is 3 months following the effective date of the participant's
retirement from the Company's service; (iii) the date which is 1 year following
the date on which the participant's service with the Company ceases due to death
or disability; (iv) the date of expiration of the option determined by the Board
at the time the option is granted and specified in such option; or (v) the 10th
annual anniversary date of the granting of the option. However, the Board shall
have the discretion, but not the obligation, to extend the expiration of the
option held by a participant whose service has ceased for any reason to the end
of their original terms.

Options are exercisable on the terms determined by the Board at the time of the
grant. The option price is payable in full upon exercise of an option and may be
paid in cash or, if permitted by the Board, by tendering shares of Common Stock
of the Company already owned by the participant. Options granted under the
Omnibus Plan are nontransferable and nonassignable by a participant other than
by will or by the laws of descent and distribution, and are exercisable during
the participant's lifetime only by the participant.

CHANGE OF CONTROL

The Omnibus Plan provides for the accelerated exercisability of options in the
event of a merger, consolidation, acquisition, sale or transfer of assets,
tender, or exchange offer or other reorganization in which the Company does not
survive as an independent company.

AMENDMENT; TERMINATION

The Board of Directors may amend the Omnibus Plan. The Board of Directors may
terminate or suspend the Omnibus Plan at any time. The Omnibus Plan currently
will terminate automatically on January 31, 2008. No benefits may be awarded
under the Omnibus Plan after its termination. Except as provided by the Omnibus
Plan, amendment, suspension or termination of the Omnibus Plan will not alter or
impair any rights or obligations under options previously granted under the
Omnibus Plan.

FEDERAL TAX CONSEQUENCES

paid to its chief executive officer or any of its other four highest paid
officers unless certain requirements are met. The Omnibus Plan does not meet the
requirements of Section 162(m) and it is possible that certain compensation paid
under the Omnibus Plan would not be deductible in the future. However, the
Company currently believes that all amounts under the Omnibus Plan will be
deductible because the compensation of the officers will either not exceed the
limit under Section 162(m) or part of the compensation will be paid under the
Performance Plan for Executives which does meet the requirements of Section
162(m).

The Board of Directors recommends that the shareholders vote "FOR" the proposed
amendment.

OTHER BUSINESS

Management does not know of any other matters which may come before the Meeting.
However, if any other matters are properly presented at the 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.

SHAREHOLDER PROPOSALS

Shareholder proposals intended to be presented at the 2002 Annual Meeting of
Shareholders must be received by the Company by June 12, 2003 for inclusion in
the Company's proxy statement and proxy relating to that meeting. Upon receipt
of any such proposal, the Company will determine whether or not to include such
proposal in the proxy statement and proxy in accordance with regulations
governing the solicitation of proxies.

In order for a Shareholder to bring other business before a Shareholder meeting,
timely notice must be given to the Company within the time limits set forth
above. Such notice must include a description of the proposed business, the
reasons therefor and other matters specified in the Company's Bylaws. The Board
or the presiding officer at the Annual Meeting may reject any such proposals
that are not made in accordance with these procedures or that are not a proper
subject for Shareholder action in accordance with applicable law. These
requirements are separate from the procedural requirements a Shareholder must
meet to have a proposal included in the Company's proxy statement.

In each case the notice must be provided to the Company at its principal office
in St. Louis, Missouri. Shareholders desiring a copy of the Company's Bylaws
will be furnished a copy without charge upon the submission of a written request
to the Company.

If the date of the 2003 Annual Meeting of Shareholders is advanced or delayed by
more than 30 calendar days from the date of the 2002 Annual Meeting of
Shareholders the Company will make a timely disclosure of such date change and
the impact of such date change on the submission deadlines set forth above in
its first quarterly report on Form 10-Q following such date change, or, if
impracticable any means reasonably calculated to inform shareholders.

RELATIONSHIP WITH THE INDEPENDENT ACCOUNTANTS

BDO Seidman, LLP ("BDO Seidman") served as the independent public accountant for
the Company in fiscal 2002. BDO Seidman has been selected as the Company's
independent public accountant for fiscal 2003.

For the year ended January 31, 2002, the Company incurred professional fees and
out-of-pocket expenses to its auditors in the amount of $287,720, of which
$266,000 related to auditing services, none related to information technology
consulting and $21,720 related to all other services.

The Company's audit committee has considered whether the non-audit services
provided by the Company's auditors in connection with the year ended January 31,
2002 were compatible with the auditors' independence.

By Order of the Board of Directors

/s/ W. Brian Rodgers

W. Brian Rodgers, Secretary

THE BOARD OF DIRECTORS HOPES THAT YOU WILL ATTEND THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN
THE ACCOMPANYING ENVELOPE PROMPTLY. IF YOU ATTEND THE MEETING, YOU MAY VOTE YOUR
STOCK PERSONALLY BY DELIVERING A WRITTEN REVOCATION OF YOUR PROXY TO THE
SECRETARY OF THE COMPANY.

EXHIBIT A

THE SOURCE INFORMATION MANAGEMENT COMPANY
AMENDED AND RESTATED 1995 INCENTIVE STOCK OPTION PLAN

1. PURPOSE OF THE PLAN

The Source Information Management Company 1995 Incentive Stock Option
Plan ("Plan") is intended to provide additional incentive to certain valued and
trusted employees of The Source Information Management Company, a Missouri
corporation (the "Company"), by encouraging them to acquire shares of the $.01
par value Common Stock of the Company (the "Stock") through options to purchase
Stock granted under the Plan ("Options"). The purpose for granting such Options
and making the purchase of the Stock possible is to increase the proprietary
interest of such employees in the business of the Company and provide them with
an increased personal interest in the continued success and progress of the
Company. The intended result is to promote the interests of both the Company and
its shareholders.

Options granted under the Plan may be either Options intended to
qualify as "incentive stock options" ("ISOs") within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or nonqualified
stock options ("NQSOs"). Each employee granted an Option will receive and be
required to accept a Stock Option Agreement with the Company (the "Option
Agreement"), which sets forth the terms and conditions of the Option, in
accordance with this Plan.

2. ADMINISTRATION OF PLAN

The Plan will be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company ("Board"), to be composed
of at least two (2) members. Each member of the Committee shall be a
"non-employee director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any successor rule or
regulation. Each member of the Committee shall serve at the pleasure of the
Board. Any vacancy occurring in the membership of the Committee shall be filled
by appointment by the Board. If there are less than two members of the Board who
qualify as "non-employee directors" within the meaning of Rule 16b-3 under the
Exchange Act, then the full Board shall be deemed to be the administrators of
the Plan and shall be endowed with all of the rights and responsibilities
attributed to the Committee herein:

The Committee shall have the sole power:

(a) subject to the provisions of the Plan, to grant Options; to
determine the type of Option (NQSO or ISO); to determine the terms and
conditions of all Options; to construe and interpret the Plan and Options
granted under it; to determine the time or times an Option may be exercised, the
number of shares as to which an Option may be exercised at any one time, and
when an Option may terminate; to establish, amend and revoke rules and
regulations relating to the Plan and its administration; and to correct any
defect supply any omission, or reconcile any inconsistency in the Plan, or in
any Option Agreement, in a manner and to the extent it shall deem necessary, all
of which determinations and interpretations made by the Committee shall be
conclusive and binding on all Optionees and on their legal representatives and
beneficiaries; and

(b) to determine all questions of policy and expediency that may arise
in the administration of the Plan and generally exercise such powers and perform
such acts as are deemed necessary or expedient to promote the best interests of
the Company.

The day-to-day administration of the Plan may be carried out by such
officers and employees of the Company as shall be designated from time to time
by the Committee. All expenses and liabilities incurred by the Committee in
connection with the administration of the Plan shall be borne by the Company.
The Committee may employ attorneys, consultants, accountants, appraisers,
brokers or other persons, and the Committee, the Board, the Company and the
officers and employees of the Company shall be entitled to rely upon the advice,
opinions or

valuations of any such persons. The interpretation and construction by the
Committee of any provision of the Plan and any determination by the Committee
under any provision of the Plan shall be final and conclusive for all purposes.
Neither the Committee nor any member thereof shall be liable for any act,
omission, interpretation, construction or determination made in connection with
the Plan in good faith, and the members of the Committee shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including attorneys' fees) arising therefrom to the fullest
extent permitted by law.

3. SHARES SUBJECT TO THE PLAN

Subject to the provisions of paragraph 13, the Stock that may be issued
pursuant to Options granted under the Plan shall not exceed in the aggregate
Three Million (3,000,000) shares of $.01 par value Common Stock of the Company.
If any Options granted under the Plan terminate, expire or are surrendered
without having been exercised in full, the number of shares of Stock not
purchased under such Options shall be available again for the purpose of the
Plan. The Stock to be offered for purchase upon the grant of an Option may be
authorized but unissued Stock or Stock previously issued and outstanding and
reacquired by the Company.

4. PERSONS ELIGIBLE FOR OPTIONS

All employees of the Company who are not members of the Committee shall
be eligible to receive the grant of Options under the Plan. The Committee shall
determine the employees to whom Options shall be granted, the time or times such
Options shall be granted. the number of shares to be subject to each Option and
the times when each Option may be exercised. The Committee shall seek
information, advice and recommendations from management to assist the Committee
in its independent determination as to the employees to whom Options shall be
granted. An employee who has been granted an Option (an "Optionee"), if he or
she is otherwise eligible, may be granted additional Options.

5. PURCHASE PRICE

The purchase price of each share of Stock covered by each Option
("Purchase Price") shall not be less than one hundred percent (100%) of the Fair
Market Value Per Share (as defined below) of the Stock on the date the Option is
granted. However, if and when an ISO is granted the Optionee receiving the ISO
owns or will be considered to own, by reason of Section 424(d) of the Code, more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company, the purchase price of the Stock covered by the ISO shall
not be less than one hundred and ten percent (110%) of the Fair Market Value Per
Share of the Stock on the date the ISO is granted.

"Fair Market Value Per Share" of the Stock shall mean: (i) if the Stock
is traded only otherwise than on a securities exchange and is quoted on the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"), the closing quoted selling price of the Stock on the date of grant
of the Option. as reported by the Wall Street Journal; (ii) if the Stock is
admitted to trading on a securities exchange, the closing quoted selling price
of the Stock on the date of grant of the Option, as reported in the Wall Street
Journal; or (iii) if the Stock is traded only otherwise than on a securities
exchange and is not quoted on NASDAQ, the closing quoted selling price of the
Stock on the date of grant of the Option as quoted in the "pink sheets"
published by the National Daily Quotation Bureau. In any case, if there were no
sales of the Stock on the date of the grant of an Option, the Fair Market Value
Per Share shall be determined by the Committee in accordance with Section
20.2031-2 of the Federal Estate Tax Regulations.

6. DURATION OF OPTIONS

Any outstanding Option and all unexercised rights thereunder shall
expire and terminate automatically upon the earliest of: (i) the cessation of
the employment or engagement of the Optionee by the Company for any reason other
than retirement (under normal Company policies), death or disability; (ii) the
date which is three months following the effective date of the Optionee's
retirement from the Company's service; (iii) the date which is one year
following the date on which the Optionee's service with the Company ceases due
to death or disability;

(iv) the date of expiration of the Option determined by the Committee at the
time the Option is granted and specified in such Option; or (v) the tenth (10th)
annual anniversary date of the granting of the Option, or, if and when an ISO is
granted the Optionee owns (or would be considered to own by reason of Section
424(d) of the Code) more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, then on the fifth (5th) such
anniversary. However, the Committee shall have the right, but not the
obligation, to extend the expiration of the Options held by an Optionee whose
service with the Company has ceased for any reason to the end of their original
terms, notwithstanding that such Options may no longer qualify as ISOs under the
Code.

7. EXERCISE OF OPTIONS

(a) An Option may be exercisable in installments or otherwise upon such
terms as the Committee shall determine when the Option is granted.

(b) No Option will be exercisable (and any attempted exercise will be
deemed null and void) if such exercise would create a right of recovery for
"short-swing profits" under Section 16(b) of the Securities Exchange Act of
1934.

(c) No Option will become exercisable if the exercisability of such
Option would cause the aggregate fair market value (as determined at the time of
grant in accordance with the provisions of paragraph 5 hereof) of the Stock with
respect to which Option issued by the Company are first exercisable during such
calendar year to exceed $100,000. If the grant of an Option hereunder would
cause a violation of the foregoing limitation, the exercisability of the portion
of the Option granted hereunder shall be reduced to the extent necessary such
that no violation of the foregoing limitation will occur. Any Option with
respect to which exercisability has been deferred shall become first exercisable
on the first day of the calendar year in which such exercisability would not
cause a violation of the limitations contained in Section 422(b)(7) of the Code;
provided, however, if the exercisability is required to be deferred beyond the
expiration of such Option, the grant of such Option shall be null and void.

8. METHOD OF EXERCISE

(a) When the right to purchase shares accrues, Options may be exercised
by giving written notice to the Company stating the number of shares for which
the Option is being exercised, accompanied by payment in full by cash or its
equivalent, as is acceptable to the Company, of the purchase price for the
shares being purchased. The Company shall issue a separate certificate or
certificates of Stock for each Option exercised by an Optionee.

(b) In the Committee's discretion, determined at the time an Option is
granted, payment of the purchase price for shares may be made in whole or in
part with other shares of Stock of the Company which are free and clear of all
liens and encumbrances. The value of the shares of Stock tendered in payment for
the shares being purchased shall be the Fair Market Value Per Share on the date
of the Optionee's notice of exercise.

(c) Notwithstanding the foregoing, the Company shall have the right to
postpone the time of delivery of any shares for such period as may be required
for the Company, with reasonable diligence, to comply with any applicable
listing requirements of any national securities exchange or the National
Association of Securities Dealers, Inc. or any Federal, state or local law. If
the Optionee, or other person entitled to exercise an Option, fails to timely
accept delivery of and pay for the shares specified in such notice, the
Committee shall have the right to terminate the Option and the exercise thereof
with respect to such shares.

9. NONTRANSFERABILITY OF OPTIONS

No Option granted under the Plan shall be assignable or transferable by
the Optionee, either voluntarily or by operation of law, other than by Will or
the laws of descent and distribution, and, during the lifetime of the Optionee,
shall be exercisable only by the Optionee.

10. CONTINUANCE OF EMPLOYMENT

Nothing contained in the Plan or in any Option granted under the Plan
shall confer upon any Optionee any rights with respect to the continuation of
employment by the Company or interfere in any way with the right of the Company
(subject to the terms of any separate employment agreement to the contrary) at
any time to terminate such employment or to increase or decrease the
compensation of the Optionee from the rate in existence at the time of the
granting of any Option.

11. RESTRICTIONS ON SHARES

If the Company shall be advised by counsel that certain requirements
under Federal or state securities laws must be met before Stock may be issued
under the Plan, the Company shall notify all persons who have been issued
Options, and the Company shall have no liability for the failure to issue Stock
under any exercise of Options because of any delay while such requirements are
being met or the inability of the Company to comply with such requirements.

12. PRIVILEGE OF STOCK OWNERSHIP

No person entitled to exercise any Option granted under the Plan shall
have the rights or privileges of a stockholder of the Company for any shares of
Stock issuable upon exercise of such Option until such person has become the
holder of record of such shares. No adjustment shall be made for dividends or
other rights for which the record date is prior to the date on which such person
becomes the holder of record, except as provided in paragraph 13.

13. ADJUSTMENT

(a) If the number of outstanding shares of Stock are increased or
decreased, or such shares are exchanged for a different number or kind of shares
or securities of the Company, through reorganization, merger, recapitalization,
reclassification, stock dividend, stock split, combination of shares, or other
similar transaction, the aggregate number of shares of Stock subject to the
Plan, as provided in paragraph 3, and the shares of Stock subject to issued and
outstanding Options under the Plan shall be appropriately and proportionately
adjusted by the Committee. Any such adjustment in an outstanding Option shall be
made without change in the aggregate purchase price applicable to the
unexercised portion of the Option but with an appropriate adjustment in the
price for each share or other unit of any security covered by the Option.

(b) Notwithstanding paragraph (a), upon: (i) the dissolution or
liquidation of the Company, (ii) a reorganization, merger or consolidation of
the Company with one or more corporations in which the, Company is not the
surviving corporation, (iii) a sale of substantially all of the assets of the
Company or (iv) the transfer of more than 80% of the then outstanding Stock of
the Company to another entity or person, in a single transaction or series of
transactions, the Board shall accelerate the time in which any outstanding
Options granted under the Plan may be exercised to a time prior to the
consummation of the transaction, and the Plan shall terminate upon such
consummation of the transaction. However, the acceleration of the time of
exercise of such Options and the termination of the Plan shall not occur if
provision is made in writing in connection with the transaction, in a manner
acceptable to the Board, for: (A) the continuance of the Plan and assumption of
outstanding Options, or (B) the substitution for such Options of new options to
purchase the stock of a successor corporation (or parent or subsidiary thereof),
with appropriate adjustments as to number and kind of shares and option price.
The Board of Directors shall have the authority to amend this paragraph to
provide for a requirement that a successor corporation assume any outstanding
Options.

(c) Adjustments under this paragraph 13 shall be made by the Committee,
whose determination as to what adjustments shall be made, and the extent thereof
shall be final, binding and conclusive. No fractional shares of Stock shall be
issued under the Plan or in connection with any such adjustment.

14. INVESTMENT PURPOSE

Each Option granted hereunder may be issued on the condition that any
purchase of Stock by the exercise of an Option which is not the subject of a
registration statement permitting the sale or other distribution thereof shall
be for investment purposes and not with a view to resale or distribution (the
"Restricted Stock"). If requested by the Company, each Optionee must agree, at
the time of the purchase of any Restricted Stock, to execute an "investment
letter" setting forth such investment intent in the form acceptable to the
Company and must consent to any stock certificate issued to him thereunder
bearing a restrictive legend setting forth the restrictions applicable to the
further resale, transfer or other conveyance thereof without registration under
the Securities Act of 1933, as amended, and under the applicable securities or
blue sky laws of any other jurisdiction (together, the "Securities Laws"), or
the availability of exemptions from registration thereunder and to the placing
of transfer restrictions on the records of the transfer agent for such stock. No
Restricted Stock may thereafter be resold, transferred or otherwise conveyed
unless:

(1) an opinion of the Optionee's counsel is received. in form and
substance satisfactory to counsel for the Company, that
registration under the Securities Laws is not required; or

(2) such Stock is registered under the applicable Securities Laws;
or

(3) A "no action" letter is received from the staff of the
Securities and Exchange Commission and from the administrative
agencies administering all other applicable securities or blue
sky laws, based on an opinion of counsel for Optionee in form
and substance reasonably satisfactory to counsel for the
Company, advising that registration under the Securities Laws
is not required.

15. AMENDMENT AND TERMINATION OF PLAN

(a) The Board of Directors of the Company may, from time to time, with
respect to any shares at the time not subject to Options, suspend or terminate
the Plan or amend or revise the terms of the Plan; provided that any amendment
to the Plan shall be approved by a majority of the shareholders of the Company
if the amendment would (i) materially increase the benefits accruing to
participants under the Plan; (ii) increase the number of shares of Stock which
may be issued under the Plan, except as provided under the provisions of
paragraph 13; or (iii) materially modify the requirements as to eligibility for
participation in the Plan.

(b) Subject to the provisions of paragraph 13, the Plan shall terminate
ten (10) years from the earlier of the adoption of the Plan by the Board of
Directors or its approval by the shareholders.

(c) Subject to the provisions of paragraph 13, no amendment, suspension
or termination of this Plan shall, without the consent of each Optionee, alter
or impair any rights or obligations under any Option granted to such Optionee
under the Plan.

16. EFFECTIVE DATE OF PLAN

The Plan shall become effective upon adoption by the Board of Directors
of the Company and approval by the Company's shareholders; provided, however,
that prior to approval of the Plan by the Company's shareholders but after
adoption by the Board of Directors, Options may be granted under the Plan
subject to obtaining such approval.

17. TERM OF PLAN

No Option shall be granted under the Plan after ten (10) years from the
earlier of the date of adoption of the Plan by the Board of Directors of the
Company or the date of approval by the Company's shareholders.

Adopted by the Board of Directors as of August 23, 1995, amended as of
June 26, 1997, further amended as of October 7, 1998, further amended as of July
7, 1999, further amended as of March 28, 2000, as further amended September 20,
2002.

THE SOURCE INFORMATION MANAGEMENT COMPANY

By:

S. Leslie Flegel, Chairman of the Board and Chief
Executive Officer

EXHIBIT B

THE SOURCE INFORMATION MANAGEMENT COMPANY 1998 OMNIBUS PLAN

ARTICLE I
PURPOSE OF THE PLAN

The Source Information Management Company 1998 Omnibus Plan ("Plan") is intended
to provide additional incentive to certain valued and trusted employees,
officers, and directors of The Source Information Management Company, a Missouri
corporation (the "Company"), by encouraging them to acquire shares of the $0.01
par value Common Stock of the Company (the "Stock") through options to purchase
Stock granted pursuant to the Plan ("Options"), and, in the case of directors,
conversion of their director retainer fees into Stock for payment, thereby
increasing such employees', officers', and directors' interest in the business
of the Company and providing them with an increased personal interest in the
continued success and progress of the Company, the result of which will promote
both the interests of the Company and its shareholders.

ARTICLE II
ADMINISTRATION OF PLAN

2.1 The entire Board of Directors of the Company ("Board") will administer the
Plan.

2.2 The Board shall have the sole power:

(a) subject to the provisions of the Plan, to determine the terms and conditions
of all Options; to construe and interpret the Plan and Options granted under it;
to establish, amend and revoke rules and regulations relating to the Plan and
its administration; to determine the time or times an Option may be exercised,
the number of shares as to which an Option may be exercised at any one time, to
accelerate the time or times at which an Option may be exercised and increase
the number of shares as to which an Option may be exercised at any one time, and
when an Option may terminate; and to correct any defect, supply any omission, or
reconcile any inconsistency in the Plan, or any Option Agreement, in a manner
and to the extent it shall deem necessary, all of which determinations and
interpretations made by the Board shall be conclusive and binding on all
Optionees and on their legal representatives and beneficiaries; and

(b) to determine all questions of policy and expediency that may arise in the
administration of the Plan and generally exercise such powers and perform such
acts as are deemed necessary or expedient to promote the best interests of the
Company.

2.3 The day-to-day administration of the Plan may be carried out by such
officers and employees of the Company as shall be designated from time to time
by the Board. All expenses and liabilities incurred by the Board in connection
with the administration of the Plan shall be borne by the Company. The Board may
employ attorneys, consultants, accountants, appraisers, brokers or other
persons, and the Board, the Company and the officers and employees of the
Company shall be entitled to rely upon the advice, opinions or valuations of any
such persons. The interpretation and construction by the Board of any provision
of the Plan and any determination by the Board under any provision of the Plan
shall be final and conclusive for all purposes. Neither the Board nor any member
thereof shall be liable for any act, omission, interpretation, construction or
determination made in connection with the Plan in good faith, and the members of
the Board shall be entitled to indemnification and reimbursement by the Company
in respect of any claim, loss, damage or expense (including attorneys' fees)
arising therefrom to the fullest extent permitted by law.

ARTICLE ILL
SHARES SUBJECT TO THE PLAN

Subject to the provisions of Article IX below, the Stock which may be issued
under the Plan shall not exceed in the aggregate 2,000,000 shares, which Stock
may be authorized but unissued Stock or Stock previously issued and

outstanding and reacquired by the Company. If any Options granted under the Plan
terminate, expire or are surrendered without having been exercised in full, the
number of shares of Stock not purchased under such Options shall be available
again for the Plan.

ARTICLE IV
NONQAUALIFLED STOCK OPTIONS

4.1 All employees, officers, and directors of the Company shall be eligible to
receive the grant of Options under the Plan. The Board shall determine the
employees, officer and directors to whom Options shall be granted, the time or
times such Options shall be granted, the number of shares to be subject to each
Option and the times when each Option may be exercised. The Board shall seek
information, advice and recommendations from management to assist the Board in
its independent determination as to the persons to whom Options shall be
granted. An employee, officer or director who has been granted an Option (an
"Optionee"), if he or she is otherwise eligible, may be granted additional
Options. Each Optionee shall enter into an agreement with the Company (the
"Option Agreement") setting forth the terms and conditions of the Optionee's
Option, as determined in accordance with this Plan.

4.2 Options granted under the Plan are not intended to qualify as "incentive
stock options" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").

4.3 The purchase price of each share of Stock covered by each Option ("Purchase
Price") shall not be less than one hundred percent (100%) of the Fair Market
Value Per Share (as defined in Section 10.1) of the Stock on the date the Option
is granted.

4.4 Any outstanding Option and all unexercised rights thereunder shall expire
and terminate automatically upon the earliest of: (i) the cessation of the
employment or engagement of the Optionee by the Company for any reason other
than retirement (under normal Company policies), death or disability; (ii) the
date which is three months following the effective date of the Optionee's
retirement from the Company's service; (iii) the date which is one year
following the date on which the Optionee's service with the Company ceases due
to death or disability; (iv) the date of expiration of the Option determined by
the Board at the time the Option is granted and specified in such Option; or (v)
the tenth (10th) annual anniversary date of the granting of the Option. However,
the Board shall have the discretion, but not the obligation, to extend the
expiration of the Options held by an Optionee whose service with the Company has
ceased for any reason to the end of their original terms. Such discretion may be
exercised at the time of grant by express statement in the Option Agreement or
prior to expiration and termination of the Option by resolution duly adopted by
the Board.

4.5 An Option may be exercisable in installments or otherwise upon such terms as
the Board shall determine when the Option is granted. In the event that an
Option is exercisable only in installments, such Option shall become fully
exercisable upon the termination of employment of the Optionee by reason of
retirement (under normal Company policies), death, disability or a Change in
Control (as defined in Section 10.2).

4.6 Upon exercise of an Option, the full Exercise Price for the shares with
respect to which the Option is being exercised shall be payable to the Company:
(i) in cash or by check payable and acceptable to the Company; (ii) if expressly
permitted in the Option Agreement, by tendering to the Company shares of Stock
owned by the Optionee having an aggregate Fair Market Value Per Share as of the
date of exercise that is not greater than the full Exercise Price for the shares
with respect to which the Option is being exercised and by paying any remaining
amount of the Exercise Price as provided in (i) above; or (iii) if expressly
permitted in the Option Agreement and to such instructions as the Board may
specify, at the Optionee's written request the Company may deliver certificates
for the shares of Stock for which the Option is being exercised to a broker for
sale on behalf of the Optionee, provided that the Optionee has irrevocably
instructed such broker to remit directly to the Company on the Optionee's behalf
the full amount of the Exercise Price from the proceeds of such sale. In the
event that the Optionee elects to make payment as allowed under clause (ii)
above, the Board may, upon confirming that the Optionee owns the number of
shares of Stock being tendered, authorize the issuance of a new certificate for
the number of shares being acquired pursuant to the exercise of the Option less
the number of shares being tendered upon the exercise and return to the Optionee
(or not require surrender of) the certificate for the shares of Stock

being tendered upon the exercise. Payment instruments will be received subject
to collection.

4.7 No shares will be issued upon exercise of an Option until the Company has
received full payment of the Exercise Price for the shares. The Optionee shall
have no rights as a stockholder until the shares are reflected as issued on the
Company's stock transfer records.

4.8 Notwithstanding the foregoing, the Company shall have the right to postpone
the time of delivery of any shares for such period as may be required for the
Company, with reasonable diligence, to comply with any applicable listing
requirements of any national securities exchange or the Nasdaq Stock Market or
any Federal, state or local law. If the Optionee, or other person entitled to
exercise an Option, fails to timely accept delivery of and pay for the shares
specified in such notice, the Board shall have the right to terminate the Option
and the exercise thereof with respect to such shares.

4.9 No Option granted under the Plan shall be assignable or transferable by the
Optionee, either voluntarily or by operation of law, other than by will or the
laws of descent and distribution, and, during the lifetime of the Optionee,
shall be exercisable only by the Optionee, except as otherwise provided in this
paragraph. If the Optionee becomes disabled, the Option will be exercisable
either by the Optionee's attorney-in-fact under a Durable Power of Attorney or
by a duly appointed legal representative.

ARTICLE V
DIRECTORS' RETAINER STOCK

5.1 Subject to the availability of shares of Stock under the Plan, each present
or future member of the Board of Directors of the Company who is not also an
employee of the Company or of any subsidiary of the Company shall, unless such
director shall elect not to participate in this Plan, receive, in the form of
Stock, all amounts payable from time to time for service on the Board, including
any amounts payable with respect to service as chairperson of any committee of
the Board or attendance at any meeting of the Board of Directors or any
committee (collectively, "Retainer Fees").

5.2 A director may elect not to participate in the Plan by filing a written
election ("the Election Agreement") with the Company before the beginning of
each fiscal year of the Company. Any person who becomes a director during a
fiscal year, and who was not a director prior to the beginning of such fiscal
year, may file an Election Agreement to withdraw from participation in the Plan
for fiscal year before his term begins. The Election Agreement shall continue
until the director terminates or modifies such election by filing a new Election
Agreement with the Company. An Election Agreement, once made by a director,
shall be irrevocable with respect to all Retainer Fees otherwise payable while
such Election Agreement is in effect. No Election Agreement, or any modification
or termination thereof, shall apply to any portion of the Retainer Fee otherwise
payable within six months of the date of such Election Agreement, modification
or termination.

5.3 The Company shall establish and maintain a Stock Account for each
participating director, which shall reflect all entries required to be made
pursuant to the terms and conditions of the Plan. Credits made pursuant to
Section 5.4 shall be reflected on the books and records of the Company as an
obligation to issue and deliver a number of shares of Stock on the specified
payment date. No stock certificate shall be created or registered until the
payment date.

5.4 As of each date that any portion of the Retainer Fee would otherwise be
payable to a participating director, the Company shall credit to such director's
Stock Account a number of shares (rounded to the nearest whole share) equal to
portion of the director's Retainer Fee divided by the Fair Market Price Per
Share on such day.

5.5 The Company shall provide each participating director with an annual
statement indicating the number of shares of Stock credited to his Stock Account
as of the end of the preceding fiscal year.

5.6 Stock credited to a participating director's Stock Account shall not be
subject to forfeiture for any reason.

5.7 Stock credits to a participating director's Stock Account shall be payable
not later than ninety (90) days after the end of the Company's fiscal year. Upon
the occurrence of a Change of Control, the Stock credits to a participating
director's Stock Account as of the day immediately prior to the effective date
of the event constituting the Change of Control shall be paid in full on such
date.

ARTICLE VI
CONTINUANCE OF EMPLOYMENT

Nothing contained in the Plan or in any Option granted under the Plan shall
confer upon any participant any rights with respect to the continuation of
employment or engagement by the Company or interfere in any way with the right
of the Company (subject to the terms of any separate employment agreement to the
contrary) at any time to terminate such employment, to remove any director or to
increase or decrease the compensation of the participant from the rate in
existence at the time of the granting of any Option or the credit of any Stock
to any Stock Account.

ARTICLE VII
RESTRICTIONS ON SHARES

If an Optionee gives notice to the Company of the exercise of any Option under
the Plan or any Stock credits are payable under the Plan and the Company is
advised by counsel that Stock cannot be issued pursuant to such exercise until
the requirements of Federal or state securities laws are met, the Company shall
so notify the participant and the Company shall have no liability for any delay
in issuing or failure to issue such Stock until such requirements are met or as
a result of the inability of the Company to comply with such requirements.
However, no option which is prevented from being exercised pursuant to this
paragraph shall expire until the later of (i) its expiration date pursuant to
its terms or (ii) 30 days after the Company has advised the Optionee that the
Company is no longer prevented by Federal or state securities laws from issuing
Stock to the Optionee.

ARTICLE VIII
PRIVILEGE OF STOCK OWNERSHIP

No participant entitled to be issued Stock under this Plan shall have the rights
or privileges of a stockholder of the Company for any shares of Stock issuable
until such person has become the holder of record of such shares. No adjustment
shall be made for dividends or other rights for which the record date is prior
to the date on which such person becomes the holder of record, except as
otherwise expressly provided in this Plan.

ARTICLE IX
ADJUSTMENT

9.1 If the number of outstanding shares of Stock is increased or decreased, or
such shares are exchanged for a different number or kind of shares or securities
of the Company through reorganization, merger, recapitalization,
reclassification, stock dividend, stock split, combination of shares, or other
similar transaction, (a) the aggregate number of shares of Stock subject to the
Plan as provided in Article III above, (b) the number of shares of Stock and the
Purchase Price applicable thereto specified in outstanding Option Agreements
executed under the Plan, and (c) the number of Stock credits to each Stock
Account, shall be appropriately and proportionately adjusted by the Board.

9.2 In the event of the payment of an extraordinary dividend by the Company on
the Stock (an "extraordinary dividend" being a payment or series of payments
within any 12 consecutive months in the aggregate in excess of twenty-five
percent (25%) of the book value attributable to the Stock of the Company at the
time of the payment of the extraordinary dividend), (a) adjustment shall be made
in the purchase price of Stock under the Option for the amount of the
extraordinary dividend, and (b) each participating director's Stock Account
shall be credited with that number of shares (rounded to the nearest whole
share) determined by multiplying the dividend amount per share by the total
number of shares credited to such director's Stock Account as of the record date
for such

dividend and dividing the product by the Fair Market Price Per Share on the
dividend payment date.

9.3 Adjustments under this Article IX shall be made by the Board, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. No fractional shares of Stock shall be
issued nor shall cash in lieu of fractional shares be paid under the Plan or in
connection with any such adjustment.

ARTICLE X
DEFINITIONS

10.1 "Fair Market Value Per Share" of the Stock shall mean: (i) if the Stock is
traded only otherwise than on a securities exchange and is quoted on the NASDAQ
Stock Market ("Nasdaq"), the closing quoted selling price of the Stock on the
date of grant of the Option, as reported by the Wall Street Journal; (ii) if the
Stock is admitted to trading on a securities exchange, the closing quoted
selling price of the Stock on the date of grant of the Option, as reported in
the Wall Street Journal; or (iii) if the Stock is traded only otherwise than on
a securities exchange and is not quoted on Nasdaq, the closing quoted selling
price of the Stock on the date of grant of the Option as quoted on the Nasdaq
OTC Bulletin Board. In any case, if there were no sales of the Stock on the date
of the grant of an Option, the Fair Market Value Per Share shall be determined
by the Board in accordance with Section 20.2031-2 of the Federal Estate Tax
Regulations.

10.2 "Change in Control" shall mean the occurrence of any of the following
events: (i) any "person" (together with its "affiliates" and "associates")
becoming the "beneficial owner" (each term as defined in the Securities Exchange
Act of 1934, as amended, or the rules and regulations promulgated thereunder) of
30% or more of the voting power of all outstanding securities of the Company
entitled to vote for the election of directors of the Company, unless a majority
of the Board as constituted prior to that time have determined in their sole
discretion that, for purposes of the Plan, a Change in Control of the Company
has not occurred; (ii) as a result of or in connection with any cash tender
offer, merger or other business combination, sale of assets or contested
election of directors, or any combination of the foregoing, the persons who were
members of the Board immediately prior to such event shall cease to constitute a
majority of the Company's Board; or (iii) the Board or shareholders of the
Company approve an agreement providing for a transaction in which the Company
will cease to be an independent publicly-owned corporation or the occurrence of
a sale or other disposition of all or substantially all of the assets of the
Company.

ARTICLE XI
AMENDMENT AND TERMINATION OF PLAN

11.1 The Board of Directors of the Company may, from time to time, with respect
to any shares at the time not subject to Options, suspend or terminate the Plan
or amend or revise the terms of the Plan; provided that any amendment to the
Plan shall be approved by a majority of the shareholders of the Company if the
amendment would (i) materially increase the benefits accruing to participants
under the Plan; (ii) increase the number of shares of Stock which may be issued
under the Plan, except as provided under the provisions of Article IX; or (iii)
materially modify the requirements as to eligibility for participation in the
Plan.

11.2 Subject to the provisions of Article IX, the Plan shall terminate ten (10)
years from the earlier of the adoption of the Plan by the Board of Directors or
its approval by the shareholders.

11.3 Subject to the provisions of Article IX, no amendment, suspension or
termination of this Plan shall, without the consent of each Optionee, alter or
impair any rights or obligations under any Option granted to such Optionee under
the Plan.

ARTICLE XII
EFFECTIVE DATE OF PLAN

The Plan shall become effective upon adoption by the Board of Directors of the
Company.

ARTICLE XIII
TERM OF OPTIONS GRANTED UNDER THE PLAN

No Option shall be granted and the Board shall credit no Stock to any Stock
Account under this Plan more than ten years from the date of adoption of the
Plan.

Adopted by the Board of Directors as of the 1st day of February, 1998, amended
March 28, 2000, further amended October 25, 2000 and as further amended
September 20, 2002.

THE SOURCE INFORMATION MANAGEMENT COMPANY

By: _________________________________
S. Leslie Flegel, Chairman
of the Board and Chief Executive Officer