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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ChoicePoint Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] 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:
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(4) Date Filed:
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[CHOICEPOINT LOGO]
CHOICEPOINT INC.
1000 ALDERMAN DRIVE
ALPHARETTA, GEORGIA 30005
MARCH 26, 2001
Dear Shareholders,
You are cordially invited to attend the 2001 annual meeting of shareholders
of ChoicePoint Inc., which will be held at ChoicePoint's principal executive
offices, 1000 Alderman Drive, Alpharetta, Georgia, on Wednesday, May 2, 2001 at
11:00 a.m. local time.
Information concerning the meeting, the nominees for the Board of Directors
and other business to be conducted at the meeting is contained in the Notice of
Annual Meeting of Shareholders and related Proxy Statement which follow.
It is important that your shares be represented at the meeting in order for
the presence of a quorum to be assured and for your vote to be counted. Please
sign, date and return your proxy promptly, whether or not you plan to attend the
meeting. Your vote is very important to ChoicePoint.
We are very proud of our accomplishments this past year that not only
maintained our momentum but also better positioned ChoicePoint for the future.
On behalf of the officers and directors of ChoicePoint, we wish to thank you for
your continuing confidence in ChoicePoint.
/s/ DEREK V. SMITH
Derek V. Smith
Chairman, President and Chief
Executive Officer
Alpharetta, Georgia
March 26, 2001
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY.
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CHOICEPOINT INC.
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 2, 2001
---------------------
NOTICE IS HEREBY GIVEN that ChoicePoint Inc. will hold the annual meeting
of its shareholders on Wednesday, May 2, 2001 at 11:00 a.m. local time, for the
following purposes:
(1) To elect two directors for terms expiring in 2003 and to elect three
directors for terms expiring in 2004;
(2) To approve an amendment to the ChoicePoint Inc. 1997 Omnibus Stock
Incentive Plan to increase the number of shares of common stock that may be
issued under the plan from 12,000,000 to 15,000,000;
(3) To ratify the appointment of independent public accountants; and
(4) To transact any other business properly brought before the annual
meeting or any adjournment or postponement thereof.
The board of directors is not currently aware of any other matters that
will come before the annual meeting. Only ChoicePoint shareholders of record at
the close of business on March 8, 2001 are entitled to notice of, and to vote
at, the annual meeting and any adjournments or postponements thereof.
Regardless of whether you plan to attend the annual meeting in person, you
are urged to vote promptly by dating, signing and returning the enclosed proxy
in the accompanying envelope.
By Order of the Board of Directors,
/s/ J. Michael de Janes
J. Michael de Janes
Corporate Secretary
Alpharetta, Georgia
March 26, 2001
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CHOICEPOINT INC.
1000 ALDERMAN DRIVE
ALPHARETTA, GEORGIA 30005
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 2, 2001
The 2001 Annual Meeting of Shareholders of ChoicePoint Inc. ("ChoicePoint"
or the "Company") will be held on May 2, 2001, at ChoicePoint's corporate
headquarters, located at 1000 Alderman Drive, Alpharetta, Georgia 30005,
beginning promptly at 11:00 a.m., local time. The enclosed form of proxy is
solicited by our board of directors. It is anticipated that this proxy statement
and the accompanying proxy card will first be mailed to holders of our common
stock on or about March 26, 2001.
ABOUT THE MEETING
WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY CARD?
You are receiving this proxy statement and proxy card because you own
shares of common stock in ChoicePoint Inc. This proxy statement describes issues
on which we would like you, as a shareholder, to vote. It also gives you
information on these issues so that you can make an informed decision.
When you sign the proxy card, you appoint Derek V. Smith, Douglas C.
Curling and J. Michael de Janes as your representatives at the annual meeting.
Messrs. Smith, Curling and de Janes will vote your shares, as you have
instructed them on the proxy card, at the annual meeting. This way, your shares
will be voted whether or not you attend the annual meeting. Even if you plan to
attend the annual meeting, it is a good idea to complete, sign and return your
proxy card in advance of the annual meeting in case your plans change.
If an issue comes up for vote at the annual meeting that is not on the
proxy card, Messrs. Smith, Curling and de Janes will vote your shares, under
your proxy, in accordance with their best judgment.
WHAT AM I VOTING ON?
You are being asked to vote on (1) the election of five directors, (2) the
approval of an amendment to the ChoicePoint Inc. 1997 Omnibus Stock Incentive
Plan to increase the number of shares of common stock that may be issued under
the plan from 12,000,000 to 15,000,000, and (3) the ratification of the
appointment of Arthur Andersen LLP as independent public accountants. No
cumulative voting rights are authorized and dissenters' rights are not
applicable to these matters.
WHO IS ENTITLED TO VOTE?
Shareholders as of the close of business on March 8, 2001 are entitled to
vote. This is referred to as the record date. Each share of common stock is
entitled to one vote.
HOW DO I VOTE?
You may vote by mail. You do this by signing your proxy card and mailing
it in the enclosed, prepaid and addressed envelope. We request that you vote by
proxy even if you plan to attend the annual meeting.
You may vote in person at the annual meeting. Written ballots will be
passed out to anyone who wants to vote at the annual meeting. If you hold your
shares in "street name" (through a broker or other nominee), you must request a
legal proxy from your stockbroker in order to vote at the annual meeting.
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HOW MANY SHARES REPRESENTED DO YOU NEED TO HOLD THE ANNUAL MEETING?
As of March 8, 2001, 62,016,284 shares of common stock were issued and
outstanding. Holders of a majority of the outstanding shares as of the record
date, equal to 31,008,143 shares, must be present at the annual meeting either
in person or by proxy in order to hold the meeting and conduct business. This is
called a quorum.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
It means that you have multiple accounts at the transfer agent and/or with
brokers. Please sign and return all proxy cards to ensure that all your shares
are voted. You may wish to consolidate as many of your transfer agent or
brokerage accounts as possible under the same name and address for better
customer service.
WHAT IF I CHANGE MY MIND AFTER I RETURN MY PROXY?
You may revoke your proxy and change your vote at any time before the polls
close at the meeting. You may do this by:
- sending written notice to our corporate secretary at 1000 Alderman
Drive, Alpharetta, Georgia 30005;
- signing another proxy with a later date; or
- voting again at the annual meeting.
HOW MAY I VOTE FOR THE NOMINEES FOR ELECTION OF DIRECTOR?
With respect to the election of nominees for director, you may:
- vote FOR the election of the five nominees for director;
- WITHHOLD AUTHORITY to vote for the five nominees; or
- WITHHOLD AUTHORITY to vote for one or more of the nominees and vote
FOR the remaining nominee or nominees.
HOW MANY VOTES MUST THE NOMINEES FOR ELECTION OF DIRECTOR RECEIVE TO BE ELECTED?
If a quorum is present at the meeting, the five nominees receiving the
greatest number of affirmative votes, known as a plurality, will be elected to
serve as directors. Shares that are not voted and shares whose votes are
withheld will not affect the outcome of the election for directors. Withholding
authority to vote for a particular nominee will not prevent that nominee from
being elected.
WHAT HAPPENS IF A NOMINEE IS UNABLE TO STAND FOR RE-ELECTION?
The board of directors may, by resolution, provide for a lesser number of
directors or designate a substitute nominee. In the latter event, shares
represented by proxies may be voted for a substitute nominee.
HOW MAY I VOTE FOR APPROVAL OF THE AMENDMENT TO THE CHOICEPOINT INC. 1997
OMNIBUS STOCK INCENTIVE PLAN?
With respect to the proposal to approve the amendment to the ChoicePoint
Inc. 1997 Omnibus Stock Incentive Plan, you may:
- vote FOR approval;
- vote AGAINST approval; or
- ABSTAIN from voting on the proposal.
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HOW MANY VOTES MUST THE APPROVAL OF THE AMENDMENT TO THE CHOICEPOINT INC. 1997
OMNIBUS STOCK INCENTIVE PLAN RECEIVE TO PASS?
If a quorum is present at the annual meeting, approval of the amendment to
the ChoicePoint Inc. 1997 Omnibus Stock Incentive Plan must receive the
affirmative vote of a majority of the votes cast at the annual meeting.
Abstentions are neither counted as votes cast for or against this proposal and,
as a result, have no effect on the outcome of the vote.
HOW MAY I VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT PUBLIC
ACCOUNTANTS?
With respect to the proposal to ratify the appointment of Arthur Andersen
LLP as ChoicePoint's independent public accountants for fiscal year 2001, you
may:
- vote FOR ratification;
- vote AGAINST ratification; or
- ABSTAIN from voting on the proposal.
HOW MANY VOTES MUST THE RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT
PUBLIC ACCOUNTANTS RECEIVE TO PASS?
If a quorum is present at the annual meeting, the ratification of the
appointment of the independent public accountants must receive the affirmative
vote of a majority of the votes cast at the annual meeting. Abstentions are
neither counted as votes cast for or against this proposal and, as a result,
have no effect on the outcome of the vote.
WHAT HAPPENS IF I SIGN AND RETURN MY PROXY CARD BUT DO NOT PROVIDE VOTING
INSTRUCTIONS?
If you return a signed proxy card but do not provide voting instructions,
your shares will be voted FOR the five named director nominees, FOR the approval
of the amendment to the ChoicePoint Inc. 1997 Omnibus Stock Incentive Plan and
FOR the ratification of the appointment of the independent public accountants.
If you mark your voting instructions on the proxy card, your shares will be
voted as you instruct.
WILL MY SHARES BE VOTED IF I DO NOT SIGN AND RETURN MY PROXY CARD?
If your shares are held in "street name", your brokerage firm may vote your
shares under certain circumstances. These circumstances include certain routine
matters, such as the election of directors. Therefore, if you do not vote your
proxy, your brokerage firm may either vote your shares on routine matters or
leave your shares unvoted. When a brokerage firm votes its customers' unvoted
shares on routine matters, these shares are counted for purposes of establishing
a quorum to conduct business at the meeting.
A brokerage firm cannot vote customers' shares on non-routine matters.
Therefore, if your shares are held in street name and you do not vote your
proxy, your shares will not be voted on non-routine matters. These "broker
non-votes" are counted for purposes of establishing a quorum; however, they are
neither counted as votes cast for or against a matter presented for shareholder
consideration and, as a result, have no effect on the outcome of the vote.
HOW DOES THE RECENT STOCK SPLIT AFFECT THE INFORMATION IN THIS PROXY STATEMENT?
All references to numbers of shares, stock option data and market prices of
ChoicePoint common stock in this proxy statement have been adjusted to reflect
the three-for-two stock split that was effective on March 7, 2001.
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WHERE DO I FIND THE VOTING RESULTS OF THE MEETING?
We will announce preliminary voting results at the meeting and will publish
the final results in our quarterly report on Form 10-Q for the second quarter of
fiscal 2001. The report will be filed with the Securities and Exchange
Commission, and you will be able to get a copy by contacting our corporate
secretary at (770) 752-6000, the Securities and Exchange Commission at (800)
SEC-0330 for the location of the nearest public reference room, or through our
web site at www.choicepoint.net or the SEC's EDGAR system at www.sec.gov.
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ELECTION OF CHOICEPOINT DIRECTORS
The ChoicePoint board of directors has fixed the number of ChoicePoint
directors at eleven. The ChoicePoint board of directors is divided into three
classes, with each class elected for a three-year term. Terms are staggered so
that one class is elected each year. The terms of Frank Borman, Thomas M.
Coughlin, Douglas C. Curling, Kenneth G. Langone, C.B. Rogers, Jr. and Derek V.
Smith will expire at the ChoicePoint annual meeting. Messrs. Curling and Langone
were elected to the board in connection with ChoicePoint's merger with DBT
Online, Inc. ("DBT") on May 16, 2000. Messrs. Rogers and Borman will retire from
the board of directors effective at the ChoicePoint annual meeting and will not
stand for reelection to the board of directors.
The ChoicePoint board of directors has nominated Messrs. Coughlin, Curling,
Langone and Smith to stand for reelection as directors at the ChoicePoint annual
meeting. Additionally, the executive committee of the ChoicePoint board of
directors has nominated Bonnie G. Hill to stand for election to fill the vacancy
that will be created by the retirement of Mr. Rogers from the board of
directors. The vacancy created by the retirement of Mr. Borman will not be
filled, and, upon his retirement, the ChoicePoint board of directors will reduce
the number of directors from eleven to ten.
Each of the individuals nominated for the board of directors, other than
Ms. Hill, is currently a director of ChoicePoint and has consented to continue
to serve as a director if reelected. Ms. Hill, who currently is not a director
of ChoicePoint, has consented to serve as a director if elected. If elected, the
nominees listed below will serve for the terms indicated or until their
successors are elected and have qualified. If any nominee for director shall be
unable to serve, the persons named in the proxy may vote for a substitute
nominee. There are no family relationships between any director, person
nominated to be a director or any executive officer of ChoicePoint or its
subsidiaries.
Set forth below is information about the director nominees and about the
incumbent directors whose terms will expire in 2002 and 2003.
NOMINEES FOR TERMS EXPIRING IN 2003
Douglas C. Curling, 46, has served as Chief Operating Officer and director
of the Company since May 2000. He served as Chief Operating Officer and
Treasurer from May 1999 to May 2000 and served as Executive Vice President,
Chief Financial Officer and Treasurer of the Company from the ChoicePoint
spinoff from Equifax Inc. in August 1997 until May 1999. Mr. Curling served as
Senior Vice President -- Finance and Administration of the Insurance Services
Group of Equifax from 1993 until the ChoicePoint spinoff. Mr. Curling also
serves as a director of Intertech Information Management, Inc., a document
imaging company.
Kenneth G. Langone, 65, has served as a director of ChoicePoint since May
2000. Mr. Langone has served as Chairman, President and Chief Executive Officer
of Invemed Associates LLC, an investment banking and brokerage firm, since 1974.
He also serves as a director of The Home Depot, Inc., The New York Stock
Exchange, Inc., General Electric Company, Unifi, Inc., a provider of facsimile
transmission delivery services, Tricon Global Restaurants, Inc., a food services
company, InterWorld Corporation, an e-commerce company, Microtune, Inc., a
silicon and systems company, and several private corporations.
NOMINEES FOR TERMS EXPIRING IN 2004
Thomas M. Coughlin, 51, has served as a director of ChoicePoint since
January 2001. Mr. Coughlin has served as President and Chief Executive Officer
of Wal-Mart Stores & Supercenters U.S.A. since 1998 and served as Chief
Operating Officer from 1995 to 1998. Since joining Wal-Mart in 1978, he has
served in a variety of positions including Vice President of Loss Prevention,
Vice President of Human Resources, Executive Vice President of Sam's Operations,
Executive Vice President of Specialty Groups and Executive Vice President and
Chief Operating Officer of Wal-Mart Store Operations.
Bonnie G. Hill, 59, has been nominated to serve as a director of
ChoicePoint. Ms. Hill has served as President and Chief Executive Officer of The
Times Mirror Foundation, a charitable foundation affiliated with
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Tribune Company, since 1997 and as Senior Vice President, Communications and
Public Affairs, of The Los Angeles Times since 1998. From 1992 to 1996, she
served as Dean of the McIntire School of Commerce of the University of Virginia.
Ms. Hill currently serves as a director of AK Steel Holding Corporation, a steel
producer, Hershey Foods Corporation, The Home Depot, Inc. and Niagara Mohawk
Holdings, Inc., an energy holding company.
Derek V. Smith, 46, has served as President, Chief Executive Officer and a
director of ChoicePoint since May 1997, and has served as Chairman since May
1999. Mr. Smith served as Executive Vice President of Equifax and Group
Executive of the Insurance Services Group of Equifax from 1993 until the
ChoicePoint spinoff in August 1997. From 1991 to 1993, he served as Senior Vice
President and Chief Financial Officer of Equifax. He also serves as a director
of Metris Companies Inc., a direct marketer of consumer-based services.
THE CHOICEPOINT BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
DOUGLAS C. CURLING AND KENNETH G. LANGONE AS DIRECTORS TO HOLD OFFICE UNTIL THE
2003 MEETING OF SHAREHOLDERS AND THE ELECTION OF THOMAS M. COUGHLIN, BONNIE G.
HILL AND DEREK V. SMITH AS DIRECTORS TO HOLD OFFICE UNTIL THE 2004 MEETING OF
SHAREHOLDERS, OR UNTIL THEIR RESPECTIVE SUCCESSORS ARE ELECTED AND HAVE
QUALIFIED.
INCUMBENT DIRECTORS WHOSE TERMS WILL EXPIRE IN 2002
Ron D. Barbaro, 69, has served as a director of ChoicePoint since July
1997. Mr. Barbaro has served as Chairman and Chief Executive Officer of the
Ontario Lottery and Gaming Corporation since June 1998. Since his retirement as
President of The Prudential Insurance Company of America in 1992, he has served
as a director of various corporations. He currently serves as a director of The
Thomson Corporation, an information and publishing company, Flow International
Corporation, a manufacturer of ultrahigh-pressure products, and VoxCom, Inc., a
home and commercial security company.
Charles G. Betty, 43, has served as a director of ChoicePoint since May
2000. Mr. Betty has served as President and Chief Executive Officer of
EarthLink, Inc. since January 1996, the nation's second largest Internet service
provider. He serves as a director of EarthLink, Inc. and Elastic Networks Inc.,
a provider of DSL technology and Internet access solutions.
Bernard Marcus, 71, has served as a director of ChoicePoint since May 2000.
Mr. Marcus is a co-founder and has been Chairman of the Board of The Home Depot,
Inc. since its inception in 1978. He also served as Home Depot's Chief Executive
Officer from 1978 to 1997. Mr. Marcus also serves as a director of Westfield
America, Inc., a real estate investment trust, and the National Foundation for
the Centers for Disease Control and Prevention and is Chairman of The Marcus
Institute, which provides support services for persons with developmental
disabilities and their families.
INCUMBENT DIRECTORS WHOSE TERMS WILL EXPIRE IN 2003
James M. Denny, 68, has served as a director of ChoicePoint since June
1997. From September 1995 to December 2000, Mr. Denny was a Managing Director of
William Blair Capital Partners, L.L.C., a private equity investment company. He
served as Vice Chairman of Sears, Roebuck & Co. from 1992 until his retirement
in 1995. He also serves as a director of The Allstate Corporation and GATX
Corporation, a diversified financial services company, and as Chairman of the
Board of Gilead Sciences, Inc., a bio-pharmaceutical company.
Charles I. Story, 46, has served as a director of ChoicePoint since June
1997. Mr. Story has been President, Chief Executive Officer and a director of
INROADS, Inc., an international non-profit training and development
organization, since January 1993. He also serves as a director of Briggs &
Stratton Corporation and as an advisory director to AmSouth Bank.
BOARD MEETINGS AND COMMITTEES
The board of directors of ChoicePoint met five times during 2000. The board
of directors has established several standing committees, which met at various
intervals as indicated below. Nominees for election to the board of directors
are selected and nominated by the executive committee of the board of directors,
which is
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authorized to perform the functions of a nominating committee. ChoicePoint
currently has no procedure whereby nominations are solicited from shareholders.
All directors attended at least 75% of the meetings of the board of directors
and the various committees of which they were members.
Executive Committee
The members of the executive committee are Messrs. Rogers (Chairman),
Marcus and Smith. The executive committee met two times during 2000. This
committee, in general, is authorized to exercise the powers of the board of
directors in the management of all of the affairs of ChoicePoint during the
intervals between board of directors meetings, subject to board of directors'
direction. The executive committee also establishes salaries for all executive
officers of ChoicePoint other than those officers who are members of the
executive committee. In addition, the executive committee is authorized to
perform the functions of a nominating committee.
Management Compensation and Benefits Committee
The members of the management compensation and benefits committee, referred
to as the "compensation committee," are Messrs. Langone (Chairman), Barbaro and
Betty. The compensation committee met two times during 2000. This committee is
responsible for all decisions regarding compensation of the chief executive
officer and incentive compensation awards for ChoicePoint's executive officers.
The compensation committee is also responsible for establishing and approving
compensation policies, management incentive compensation plans and other
material benefit plans, including the ChoicePoint Inc. 1997 Omnibus Stock
Incentive Plan, referred to as the "stock incentive plan."
Audit Committee
The members of the audit committee are Messrs. Denny (Chairman), Barbaro
and Story. The audit committee met three times during 2000. This committee is
responsible for reviewing and recommending to the board of directors the
engagement or discharge of independent auditors, reviewing with independent
auditors the scope, plan for and results of the audit engagement, reviewing the
scope and results of ChoicePoint's internal audit department, reviewing the
adequacy of ChoicePoint's system of internal accounting controls, reviewing the
status of material litigation and corporate compliance, and any other matters
the audit committee deems appropriate.
Privacy Committee
The members of the privacy committee are Messrs. Borman (Chairman), Curling
and Rogers. The privacy committee met twice in 2000. This committee is
responsible for reviewing and monitoring legislation and recommending policies
to the board of directors as to privacy matters affecting ChoicePoint.
DIRECTOR COMPENSATION
Directors who are salaried officers or employees of ChoicePoint receive no
additional compensation for services as a director or as a member of a committee
of the board of directors. Each director who is not a salaried officer or
employee of ChoicePoint is compensated as follows. The chairman of the board of
directors is paid an annual fee of $30,000 for his services and an additional
fee of $2,500 for attendance at each meeting of the board of directors or a
committee thereof. Derek V. Smith became Chairman of the board of directors in
May 1999 and, because he is a salaried officer of ChoicePoint, does not receive
this compensation. In 2000, each other ChoicePoint non-employee director was
paid an annual fee of $15,000 for services as a director, an additional fee of
$1,000 for attendance at each meeting of the board of directors, and $1,000 (or
$2,500 if designated as chairman) for attendance at each committee meeting.
During 2000, Mr. Borman, a director and employee of ChoicePoint, received the
director fees paid to non-employee directors. Effective January 1, 2001, the
annual retainer for non-employee directors was increased from $15,000 to
$20,000.
In addition, upon initial election to the board of directors, each
ChoicePoint non-employee director receives a one-time grant of restricted
ChoicePoint common stock with a market value of $25,000, which vests
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after 36 months or upon death or retirement from the board of directors,
whichever occurs first. ChoicePoint non-employee directors also receive annual
stock option awards of 3,000 shares of ChoicePoint common stock and the chairman
of the board of directors receives annual stock option awards of 5,000 shares.
However, Mr. Smith, Chairman of the board of directors, and Douglas C. Curling,
Chief Operating Officer, do not receive these awards because they are salaried
employees of ChoicePoint. During 2000, Mr. Borman, a director and employee of
ChoicePoint, received the restricted stock award and stock option award granted
to non-employee directors. The stock option awards vest after 24 months or upon
the director's earlier death or retirement from the board of directors.
Restricted stock and stock option awards are issued under the ChoicePoint stock
incentive plan.
ChoicePoint non-employee directors are eligible for participation in
ChoicePoint's deferred compensation plan, pursuant to which each ChoicePoint
non-employee director may elect to defer up to 100% of earned director
compensation into accounts that are credited with earnings or losses based upon
imputed investments in one or more of the following, as selected by the
individual director: (a) the market value of, and any dividends on, the
ChoicePoint common stock ("common share equivalents"), (b) a short-term income
fund, (c) an equity index fund, or (d) a fixed income fund. Funds invested in
common share equivalents may be redeemed only for cash on a fixed date or upon
termination of service as a director, as elected in advance by the director. No
director has voting or investment power with respect to the common share
equivalents.
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CHOICEPOINT SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table reflects information, as of January 1, 2001, with
respect to the beneficial ownership of the outstanding ChoicePoint common stock
by (1) persons known to ChoicePoint to be the beneficial owners of more than
five percent of the ChoicePoint common stock in accordance with Section 13(d) of
the Exchange Act, (2) each of the executive officers of ChoicePoint named in the
summary compensation table which follows, (3) each director and director nominee
of ChoicePoint, and (4) all of the directors, director nominees and executive
officers of ChoicePoint as a group. Share ownership information represents those
shares as to which the individual holds sole voting and investment power, except
as otherwise indicated. The number of outstanding shares of ChoicePoint common
stock as of January 1, 2001 was 61,565,799. Share amounts have been adjusted to
reflect the two-for-one stock split that was effective November 24, 1999 and the
three-for-two stock split that was effective March 7, 2001.
NUMBER OF PERCENT OF
NAME AND ADDRESS SHARES(1) CLASS
- ---------------- ----------- ----------
Baron Capital Group, Inc.................................... 8,540,979(2) 13.9%
BAMCO, Inc.
Baron Capital Management, Inc.
Baron Asset Fund
Ronald Baron
767 Fifth Avenue
New York, NY 10153
FMR Corp. .................................................. 4,794,398(3) 7.8
Edward C. Johnson 3rd
Abigail P. Johnson
82 Devonshire Street
Boston, MA 02109
Ron D. Barbaro.............................................. 13,158 *
Charles G. Betty............................................ 40,665 *
Frank Borman................................................ 158,368 *
Thomas M. Coughlin.......................................... 0 *
Douglas C. Curling.......................................... 500,754 *
James M. Denny.............................................. 11,184 *
Bonnie G. Hill.............................................. 0 *
Kenneth G. Langone.......................................... 2,017,735(4) 3.3
David T. Lee................................................ 251,941 *
Bernard Marcus.............................................. 86,280 *
Dan H. Rocco................................................ 413,922 *
C.B. Rogers, Jr............................................. 315,150 *
Derek V. Smith.............................................. 1,712,499(5) 2.8
Charles I. Story............................................ 11,184 *
Michael S. Wood............................................. 15,693 *
All Executive Officers, Directors, and Nominees as a Group
(17 persons).............................................. 5,988,564 9.7
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* Represents beneficial ownership of less than 1% of the outstanding
ChoicePoint common stock.
(1) Includes shares issuable pursuant to stock options exercisable on January 1,
2001, or within 60 days thereafter, as follows: Mr. Barbaro -- 9,000; Mr.
Betty -- 39,375; Mr. Borman -- 124,341; Mr. Curling -- 387,906 shares; Mr.
Denny -- 9,000; Mr. Langone -- 157,500; Mr. Lee -- 199,185 shares; Mr.
Marcus -- 39,375; Mr. Rocco -- 318,981 shares; Mr. Rogers -- 15,000; Mr.
Smith -- 1,278,309 shares; Mr. Story -- 9,000; and Mr. Wood -- 13,125
shares.
(2) This information is based on a Schedule 13G filed with the Securities and
Exchange Commission on February 14, 2001. According to the Schedule 13G, the
holders listed own the shares of ChoicePoint common stock directly or
indirectly, and collectively have shared voting and dispositive power with
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respect to an aggregate of 5,693,986 shares of ChoicePoint common stock,
which amount has been adjusted to reflect the three-for-two stock split that
was effective on March 7, 2001.
(3) This information is based on a Schedule 13G filed with the Securities and
Exchange Commission on February 13, 2001. According to the Schedule 13G, the
holders listed own the shares of ChoicePoint common stock directly or
indirectly, and collectively have shared voting and dispositive power with
respect to an aggregate of 3,196,265 shares of ChoicePoint common stock,
which amount has been adjusted to reflect the three-for-two stock split that
was effective on March 7, 2001.
(4) Includes 708,750 shares owned by Invemed Securities, Inc., 520,453 shares
owned by Invemed Catalyst Fund LP, and 157 shares owned by his wife. Mr.
Langone is Chairman, President and CEO of Invemed Securities, Inc. and a
general partner of Invemed Catalyst Fund LP.
(5) Includes 300 shares held by his wife and 69,300 shares held in two trusts.
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CHOICEPOINT EXECUTIVE COMPENSATION
SUMMARY OF CASH AND OTHER COMPENSATION
The following table shows, for the fiscal years ended December 31, 2000,
1999 and 1998, the compensation awarded to, earned by or paid to ChoicePoint's
chief executive officer and the four other most highly compensated executive
officers of ChoicePoint, referred to as the "named officers" in all capacities
in which they served during such fiscal years. Prior to the ChoicePoint spinoff
from Equifax Inc. in August 1997, the named officers, other than Mr. Wood, were
employees of, and received their compensation and benefits from, Equifax, rather
than from ChoicePoint. Accordingly, all amounts and awards identified in the
table below reflect payments or awards made by Equifax prior to the ChoicePoint
spinoff and by ChoicePoint subsequent to the ChoicePoint spinoff.
SUMMARY COMPENSATION TABLE
ANNUAL
COMPENSATION LONG-TERM COMPENSATION
--------------------- ---------------------------------------
AWARDS
-------------------------- PAYOUTS
RESTRICTED SECURITIES ----------
NAME AND STOCK UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) AWARDS(2) OPTIONS(#)(3) PAYOUTS(4) COMPENSATION(5)
- ------------------ ---- -------- ---------- ---------- ------------- ---------- ---------------
Derek V. Smith................... 2000 $637,884 $1,600,000 $ -- 225,000 $ -- $723,689
Chairman, President 1999 465,867 917,000 1,585,815 330,000 2,702,898 501,892
and CEO 1998 382,794 700,000 -- 300,000 4,306,134 413,787
Douglas C. Curling............... 2000 370,007 780,000 -- 112,500 266,187
Chief Operating 1999 280,405 465,000 726,626 165,000 756,585 171,490
Officer 1998 230,583 325,000 -- 108,000 650,676 137,799
Dan H. Rocco..................... 2000 240,762 250,000 -- 37,500 -- 123,340
Executive Vice 1999 216,917 245,000 310,657 66,000 756,585 119,913
President 1998 200,761 215,000 -- 81,000 650,676 111,310
David T. Lee..................... 2000 216,542 300,000 -- 52,500 -- 99,914
Executive Vice 1999 196,494 235,000 171,282 82,500 -- 83,869
President 1998 177,544 200,000 -- 40,500 -- 64,186
Michael S. Wood.................. 2000 197,308 140,000 -- 26,250 -- 8,698
Chief Financial 1999 -- -- -- -- --
Officer 1998 -- -- -- -- --
- ---------------
(1) Represents an annual cash incentive award earned upon achievement of
specified performance measurements and determined as a percentage of salary.
(2) ChoicePoint granted restricted stock during 1999 to a selected group of key
officers to assure the key officers are retained through April 2002. In the
event that any dividends are paid with respect to the ChoicePoint common
stock in the future, dividends will be paid on the shares of restricted
ChoicePoint common stock at the same rate. The value of restricted stock
awards shown in the table is as of the date of grant. As of December 31,
2000, the total number of restricted stock awards outstanding and related
fair market value were as follows: Mr. Smith -- 182,715 shares ($7,986,168);
Mr. Curling -- 61,371 shares ($2,682,424); Mr. Rocco -- 41,124 shares
($1,797,462); and Mr. Lee -- 17,499 shares ($764,852).
(3) Share amounts have been adjusted to reflect the two-for-one stock split that
was effective November 24, 1999 and the three-for-two stock split that was
effective March 7, 2001.
(4) Amounts included for 1998 represent the value of long-term incentive
compensation originally awarded by Equifax in 1995 and 1996 and which vested
on December 31, 1998 and was paid by ChoicePoint. The amounts for 1999
represent the final long-term incentive payment made by ChoicePoint pursuant
to Equifax long-term incentive plans.
(5) For 2000, these amounts include: for Mr. Smith $25,440 in contributions
under the ChoicePoint Inc. 401(k) profit sharing plan, referred to as the
"401(k) Plan", $677,144 accrued under ChoicePoint's deferred compensation
plan, referred to as the "DCP", $17,574 in term life insurance premiums,
referred
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to as the "Life Premiums" and $3,531 for employer contributions for the
salaried employee health-related benefit plan, referred to as the "Health
Plan Contributions"; for Mr. Curling, $20,772 in contributions under the
401(k) Plan, $231,444 accrued under the DCP, $10,440 in Life Premiums, and
$3,531 in Health Plan Contributions; for Mr. Rocco, $27,345 in contributions
under the 401(k) Plan, $93,325 under the DCP and $2,670 in Health Plan
Contributions; for Mr. Lee, $22,786 in contributions under the 401(k) Plan,
$69,233 accrued under the DCP, $4,364 in Life Premiums and $3,531 in Health
Plan Contributions; and for Mr. Wood, $2,285 in contributions under the
401(k) Plan, $4,216 accrued under the DCP, and $2,197 in Health Care
Contributions.
STOCK OPTIONS
The following table sets forth information concerning the grants to the
named officers of options to purchase ChoicePoint common stock during the fiscal
year ended December 31, 2000.
OPTION GRANTS IN LAST FISCAL YEAR
NUMBER OF
SHARES OF PERCENT OF POTENTIAL REALIZABLE VALUE
COMMON TOTAL AT ASSUMED RATES OF STOCK
STOCK OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ---------------------------
NAME GRANTED(1)(2) 2000 SHARE DATE 5%(3) 10%(3)
- ---- ------------- ------------ --------- ---------- ------------ ------------
Derek V. Smith............ 225,000 14.36% $25.3750 1/25/2010 $3,590,595 $9,099,273
Douglas C. Curling........ 112,500 7.18 25.3750 1/25/2010 1,795,298 4,549,637
Dan H. Rocco.............. 37,500 2.39 25.3750 1/25/2010 598,433 1,516,546
David T. Lee.............. 52,500 3.35 25.3750 1/25/2010 837,806 2,123,164
Michael S. Wood........... 26,250 1.68 26.8333 2/13/2010 442,978 1,122,592
- ---------------
(1) All options were granted pursuant to the stock incentive plan. Share amounts
have been adjusted to reflect the two-for-one stock split effective November
24, 1999 and the three-for-two stock split effective March 7, 2001. Except
as described in footnote (3) below, all options were granted as incentive
stock options that vest 100% on the third anniversary of the date of grant.
(2) The number of options reported includes options to purchase 112,500, 56,250,
18,750, 26,250 and 13,125 shares of ChoicePoint common stock by Messrs.
Smith, Curling, Rocco, Lee and Wood, respectively, pursuant to non-qualified
performance-based, fair market value stock options. Such options will vest
100% on the ninth anniversary of the grant or may be accelerated to within
three years of the grant based on achieving certain performance criteria and
upon certification that the performance criteria have been met.
(3) These amounts represent assumed rates of appreciation only. Actual gains, if
any, realized upon exercises of stock options are dependent on future
performance of the ChoicePoint common stock and overall market conditions.
There can be no assurance that the amounts reflected in these columns will
be achieved or, if achieved, will be realized at the time of any option
exercise.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information, with respect to each named
officer, concerning any exercise of options to purchase ChoicePoint common stock
during the fiscal year ended, and the fiscal year-end value of outstanding
unexercised options to purchase ChoicePoint common stock held at, December 31,
2000.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR-END(#)(1) FISCAL YEAR-END(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#)(1) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------------- ---------- ----------- ------------- ----------- -------------
Derek V. Smith........ 35,604 $ 757,572 1,428,760 588,784 $47,676,132 $14,181,531
Douglas C. Curling.... -- $ 0 447,156 264,987 $14,231,707 $ 6,202,829
Dan H. Rocco.......... 53,406 $1,654,581 360,606 126,655 $11,795,143 $ 3,194,996
David T. Lee.......... 12,555 $ 336,827 200,310 142,305 $ 6,582,058 $ 3,438,996
Michael S. Wood....... -- $ 0 -- 26,250 $ 0 $ 442,969
- ---------------
(1) Share amounts have been adjusted to reflect the two-for-one stock split
effective November 24, 1999 and the three-for-two stock split effective
March 7, 2001.
(2) The value of unexercised options equals the fair market value per share of
ChoicePoint common stock as of December 31, 2000, less the exercise price,
multiplied by the number of shares underlying the stock options. The closing
price of the ChoicePoint common stock on the New York Stock Exchange on
December 31, 2000 was $43.7083 per share.
EMPLOYMENT AGREEMENTS AND CHANGE-IN-CONTROL ARRANGEMENTS
ChoicePoint currently has in effect employment agreements with Messrs.
Smith, Curling and Lee. The employment agreements set forth minimum base salary
amounts and provide for participation in ChoicePoint's employee and executive
benefit plans and certain perquisites. The employment agreements vary in
duration, but all provide for automatic extensions if not otherwise terminated.
The employment agreements may be terminated by either ChoicePoint or by the
executive. The employment agreements provide that, under specified
circumstances, in the event of a termination, the executive would be entitled to
severance pay for a period of up to two years from the date of termination.
The employment agreements also contain provisions for severance pay and
specified benefits upon the occurrence of a "change in control" of ChoicePoint.
A "change in control" is defined by the employment agreements to mean: (1) a
merger, consolidation or other reorganization of ChoicePoint that results in the
shareholders of ChoicePoint holding less than a majority of the voting power of
the resulting entity after such a transaction; (2) a sale or transfer of all or
substantially all of ChoicePoint's assets to an entity in which the shareholders
of ChoicePoint hold less than a majority of the voting power of such entity
immediately following such sale or transfer; (3) the filing of a report with the
Securities and Exchange Commission pursuant to the provisions of the Exchange
Act disclosing that a person or entity beneficially owns shares representing at
least 30% of ChoicePoint's voting power; (4) disclosure by ChoicePoint, pursuant
to the requirements of the Exchange Act, that a change in control (as defined in
the Exchange Act) has occurred or may occur pursuant to a then-existing
agreement; or (5) in specified circumstances, the failure to reelect a majority
of the members of ChoicePoint's board of directors. In the event that the
executive's employment is terminated under conditions within five years after
the date of a change in control, then the executive is entitled to severance pay
and other benefits. The amount of the severance payment is based upon the
executive's annual compensation, with specified components of such compensation
multiplied by a factor ranging from 2 to 3 times.
In addition, Mr. Rocco is a party to a compensation agreement entered into
with Equifax in 1996, the obligations of which have been assumed by ChoicePoint.
Pursuant to this agreement, subject to specified conditions, since Mr. Rocco
remained continuously employed by ChoicePoint's subsidiary ChoicePoint Services
Inc. (f/k/a Equifax Services Inc.) through January 1, 1999, Mr. Rocco is
entitled to severance benefits in a lump sum of $150,000 upon leaving
ChoicePoint.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The compensation committee consists of Messrs. Langone (Chairman), Barbaro
and Betty. The executive committee, which is responsible for establishing
salaries for the executive officers other than officers who are members of the
executive committee, consists of Messrs. Rogers (Chairman), Marcus, and Smith.
Mr. Smith is the Chairman, President and Chief Executive Officer of ChoicePoint.
None of these directors have any interlocking relationships to be disclosed in
this proxy statement.
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MANAGEMENT COMPENSATION AND BENEFITS COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The compensation of ChoicePoint's executive officers is determined by two
committees of the board of directors. The compensation committee was established
by the board of directors and is composed entirely of directors who are not, and
have never been, officers or employees of ChoicePoint. The board of directors
designates the members and the chairman of this committee. The compensation
committee is responsible for all decisions regarding the compensation of the
chief executive officer and for establishing and administering ChoicePoint's
compensation and benefit policies and practices for the executive officers. The
compensation committee is also responsible for the administration of the stock
incentive plan. The executive committee, the members and chairman of which are
also designated by the board of directors, is responsible for establishing
salaries for executive officers other than officers who are members of the
executive committee, pursuant to guidelines prescribed by the compensation
committee.
The following report summarizes the philosophies and methods that the
compensation committee uses in establishing and administering ChoicePoint's
executive compensation and incentive programs, including the development of
compensation programs designed to provide key employees with immediate ownership
interests in ChoicePoint and motivation to build shareholder value.
EXECUTIVE COMPENSATION POLICIES
ChoicePoint's executive compensation policies are designed to attract and
retain qualified executives, to reward individual achievement appropriately and
to enhance the financial performance of ChoicePoint, and thus shareholder value,
by significantly aligning the financial interests of ChoicePoint's executives
with those of its shareholders. To accomplish these objectives, the executive
compensation program, as administered by the compensation committee, is
comprised of (1) annual cash compensation, the components of which are base
salary and an annual variable cash incentive award payable pursuant to
ChoicePoint's annual incentive compensation plan, (2) long-term incentive
compensation, consisting of restricted stock and fair market value stock options
awarded pursuant to the stock incentive plan, and (3) other benefits that are
intended to provide competitive capital accumulation opportunities and health,
welfare and other fringe benefits. Base salary and annual bonuses are designed
to recognize both individual performance and the achievement of corporate
business objectives each year. The value of long-term incentives is directly
linked to the performance of the ChoicePoint common stock. Executive officers
also are eligible to participate in a variety of other benefit plans, including
a deferred compensation plan, supplemental life and disability plans available
to key officers and benefit plans available to employees generally, including
the 401(k) Plan and health-related plans.
Decisions regarding the compensation of executive officers are based upon
(1) the policies described above, (2) ChoicePoint's operating performance, (3)
competitive practices for executive talent, and (4) the individual performance
of the executive. In addition to these principles, the committee uses experience
and judgment in determining the mix and level of compensation. The committee
considers market practices and compensation information drawn from a broad range
of companies, including, but not limited to, certain of the companies included
in the industry index used in the stock performance graph included in this proxy
statement. The compensation committee's policy, which is taken into
consideration by the executive committee, is to provide ChoicePoint's officers
with a competitive base salary and to offer variable performance-based elements
that provide the executive officers with the opportunity to achieve total
compensation packages that are generally in the top quartile of similar titled
positions for publicly traded companies.
ANNUAL SALARY AND INCENTIVE BONUSES
In determining the base salaries for ChoicePoint's named officers, the
compensation committee and executive committee took into consideration each
executive's experience and the responsibilities attendant to his position. Base
salaries for the named officers will be reviewed annually. In evaluating whether
an adjustment to an executive's base salary is appropriate, factors such as the
scope of the individual's job responsibilities and performance over the past
year, as well as an assessment of how well the individual
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performed in meeting or exceeding the personal goals set for that individual for
the applicable period, will be considered.
The purpose of ChoicePoint's annual incentive compensation plan is to unite
the interests of ChoicePoint's management employees with those of its
shareholders through annual payment of cash incentive awards to management
employees based upon attainment of (1) annually established corporate economic
value added goals and (2) individual performance goals. Target incentive cash
opportunities under the ChoicePoint annual incentive compensation plan for the
named officers other than the chief executive officer can range from 30% to 60%
of base salary, and for the chief executive officer represent 70% of his base
salary. Actual annual cash bonuses are determined by measuring corporate and
individual performance against goals established for the applicable period. The
goals take into account, depending upon the responsibility level of the
individual, one or more factors, including the individual's performance, the
performance of the functional group or unit with which the individual is
associated (primarily based upon the economic value added objective of such
unit), and the overall performance of ChoicePoint (primarily based upon economic
value added goals). Such goals may or may not be equally weighted and may vary
from one executive officer to another. Bonus awards under the ChoicePoint annual
incentive compensation plan, even in the event that ChoicePoint's maximum
economic value added goals are exceeded, also take into account an assessment of
the performance of the individual executive officer. For 2000, the economic
value added goals and individual performance goals were exceeded, and each of
the named officers, therefore, was awarded a total compensation package that
exceeded the target opportunity level.
LONG-TERM INCENTIVE COMPENSATION
ChoicePoint's long-term incentive compensation program for its executive
officers consists of a combination of fair market value stock options which vest
100% on the third anniversary of the grant, as well as fair market value stock
options which are performance-based, pursuant to the stock incentive plan. The
compensation committee's current philosophy is to grant fair market value stock
options, rather than restricted stock, as the primary type of award under the
stock incentive plan. The stock incentive plan is intended to provide a means of
encouraging an ownership interest in ChoicePoint by those employees who have
contributed, or are determined to be in a position to contribute, materially to
the success of ChoicePoint, thereby increasing their motivation for, and
interest in the achievement of, ChoicePoint's long-term success. Because the
value of a stock option bears a direct relationship to the price of shares of
the ChoicePoint common stock, the compensation committee believes that stock
options are a means of encouraging executives and other key management employees
to increase long-term shareholder value. In determining awards of stock options
under the stock incentive plan, the compensation committee has no specific
formula but rather makes grants based upon such factors as individual
contribution to corporate performance, market practices and management
recommendations. Consistent with the philosophy of the compensation committee
described above, in January 2000 ChoicePoint granted options under the stock
incentive plan to the named officers (including the chief executive officer) and
a number of employees.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The compensation committee generally applies the same compensation
philosophy described above for executive officers in order to determine the
compensation for Derek V. Smith, ChoicePoint's Chairman, President and Chief
Executive Officer. In setting both the cash-based and equity-based elements of
Mr. Smith's compensation, the compensation committee's objective was to
establish a compensation package at target levels that are competitive and
reflect market practice. The compensation committee determined that the total
compensation for the Chief Executive Officer was below market practice and made
adjustments accordingly. Factors considered in evaluating Mr. Smith's
performance included exceeding the financial targets established by the board of
directors, executing strategic direction, and augmenting the current key officer
team with additional talent. No specific weighting was assigned to these factors
in the evaluation process.
The compensation committee believes that the compensation program should
serve to achieve its intended objectives. It believes the use of fair market
value stock options minimizes the effect on ChoicePoint
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of Section 162(m) of the Internal Revenue Code, which section provides for an
annual $1,000,000 limitation on the deduction that an employer may claim for
compensation of executives. Section 162(m) provides exceptions to the deduction
limitation, and it is the intent of the compensation committee to qualify for
these exceptions to the extent feasible and in the best interests of
ChoicePoint, including the exceptions with respect to performance-based
compensation.
While it is the compensation committee's intention to maximize the
deductibility of compensation payable to ChoicePoint's executive officers,
deductibility will be only one among a number of factors used by the
compensation committee in ascertaining appropriate levels or methods of
compensation. ChoicePoint intends to maintain the flexibility to compensate
executive officers based upon an overall determination of what it believes to be
in the best interests of ChoicePoint and its shareholders.
CONCLUSION
To the extent that this report pertains to the determination of salaries
for executive officers other than the chief executive officer, it is jointly
submitted by the executive committee.
Management Compensation and Benefits Committee Executive Committee
Kenneth G. Langone (Chairman) C. B. Rogers (Chairman)
Ron D. Barbaro Bernard Marcus
Charles G. Betty Derek V. Smith
March 1, 2001
THE FOREGOING REPORT SHOULD NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY
GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY
FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (TOGETHER, THE "ACTS"), EXCEPT TO THE EXTENT
THAT CHOICEPOINT SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND
SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
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REPORT OF AUDIT COMMITTEE
The audit committee ("committee") oversees the Company's financial
reporting process on behalf of the board of directors. Management has the
primary responsibility for the financial statements and the reporting process
including the systems of internal controls. In fulfilling its oversight
responsibilities, the committee reviewed and discussed the audited financial
statements to be included in the Annual Report on Form 10-K for the fiscal year
ended December 31, 2000 with management.
The Company's independent public accountants, Arthur Andersen LLP
("Andersen"), are responsible for expressing an opinion on the conformity of the
Company's audited financial statements with generally accepted accounting
principles. The committee discussed with Andersen the matters required by
Statement of Accounting Standards No. 61.
In addition, the committee received from and discussed with Andersen the
written disclosures and letter from Andersen required by the Independence
Standards Board Standard No. 1 regarding their independence.
The members of the committee are independent as defined by the listing
requirements of the New York Stock Exchange.
The Company's board of directors has adopted a written charter for the
audit committee. The charter is reviewed annually and was most recently approved
and adopted on October 24, 2000. A copy of the charter is included within this
proxy statement as Annex A.
The committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The committee
meets with the internal and independent auditors, with and without management
present, to discuss the results of their examinations, their evaluations of the
Company's internal controls, and the overall quality of the Company's financial
reporting. The committee held three such meetings during fiscal year 2000.
In reliance on the reviews and discussions referred to above, the committee
recommended to the board of directors that the audited financial statements be
included in the Annual Report on Form 10-K for the year ended December 31, 2000
for filing with the Securities and Exchange Commission. The committee and the
board have also approved, subject to shareholder ratification, the selection of
the Company's independent auditors for the year ending December 31, 2001.
James M. Denny (Chairman)
Ron D. Barbaro
Charles I. Story
February 16, 2001
THE FOREGOING REPORT SHOULD NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY
GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY
FILING UNDER THE ACTS, EXCEPT TO THE EXTENT THAT CHOICEPOINT SPECIFICALLY
INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED
FILED UNDER SUCH ACTS.
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CHOICEPOINT STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total return on the ChoicePoint
common stock with a cumulative total return on the S&P Midcap 400 Index, the S&P
Smallcap 600 Index, the S&P Smallcap Services (Data Processing) Index, and the
Russell 2000 Index, for the period from August 8, 1997 (the date on which the
ChoicePoint common stock commenced trading on the New York Stock Exchange)
through December 31, 2000. The comparison assumes an original investment of $100
on August 8, 1997 and assumes the reinvestment of any dividends.
S&P
SMALLCAPSERVICES
S&P MIDCAP 400 S&P SMALLCAP 600 (DATA PROCESSING)
CHOICEPOINT INC. INDEX INDEX INDEX RUSSELL 2000
---------------- -------------- ---------------- ----------------- ------------
8 Aug-97 100 100 100 100 100
Dec-97 136 107 106 101 106
Jun-98 145 117 112 122 111
Dec-98 184 128 104 134 103
Jun-99 192 137 110 127 113
Dec-99 236 147 117 117 125
Jun-00 254 160 126 117 129
Dec-00 375 172 131 178 122
THE STOCK PRICE PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE ACTS, EXCEPT TO THE EXTENT THAT CHOICEPOINT
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED FILED UNDER SUCH ACTS.
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APPROVAL OF AN AMENDMENT TO THE
CHOICEPOINT INC. 1997 OMNIBUS STOCK INCENTIVE PLAN
GENERAL
The board of directors of ChoicePoint has adopted an amendment to the
ChoicePoint Inc. 1997 Omnibus Stock Incentive Plan, referred to as the "stock
incentive plan," and is recommending the amendment to the shareholders for
approval. The amendment would increase the number of shares of ChoicePoint
common stock available for issuance under the stock incentive plan by 3,000,000
shares. The stock incentive plan is intended to provide an equity interest in
ChoicePoint to certain of ChoicePoint's executive officers, directors and
employees and to provide additional incentives for such persons to devote
themselves to ChoicePoint's business. The stock incentive plan is also intended
to aid in attracting persons of outstanding ability to serve, and remain in the
service of, ChoicePoint. The stock incentive plan affords the board of directors
the ability to design compensatory awards that are responsive to ChoicePoint's
needs, and includes authorization for stock options, appreciation rights,
restricted shares, deferred shares, performance shares and performance units.
Any or all types of grants may require ChoicePoint or plan participants to meet
performance criteria in order to vest. Approximately forty percent of the
options granted with respect to the 12,000,000 shares of ChoicePoint common
stock currently available for issuance under the stock incentive plan were
granted in connection with (i) the conversion of options for Equifax Inc. common
stock at the time of the ChoicePoint spinoff from Equifax in August 1997 and
(ii) the retention of key management of companies acquired by ChoicePoint. The
3,000,000 additional shares are needed to facilitate the continued use of the
stock incentive plan because it is anticipated that substantially all of the
shares of ChoicePoint common stock currently available for issuance under the
plan will be exhausted in the near term.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE CHOICEPOINT INC. 1997 OMNIBUS STOCK INCENTIVE PLAN.
DESCRIPTION OF STOCK INCENTIVE PLAN
The following summary of the principal provisions of the stock incentive
plan is not intended to be exhaustive and is qualified in its entirety by the
terms of the stock incentive plan, a copy of which may be obtained from
ChoicePoint by writing to the Office of the Corporate Secretary, ChoicePoint
Inc., 1000 Alderman Drive, Alpharetta, Georgia 30005. Certain terms not
otherwise defined herein have the meanings assigned to such terms in the stock
incentive plan and summarized under "Certain Defined Terms" below.
PRINCIPAL PURPOSES OF THE STOCK INCENTIVE PLAN
The principal purposes of the stock incentive plan are to attract and
retain directors, officers and key employees of ChoicePoint and its subsidiaries
and to provide to such persons incentives and rewards for superior performance.
AVAILABLE SHARES
If the amendment to the stock incentive plan for an additional 3,000,000
authorized shares is approved by the shareholders, subject to adjustment as
provided in the stock incentive plan, the number of shares of ChoicePoint common
stock that may be issued or transferred under the stock incentive plan shall not
exceed in the aggregate 15,000,000 shares, plus (i) any shares relating to
awards that expire or are forfeited or canceled and (ii) the number of shares
repurchased by ChoicePoint after August 1, 1997 in the open market or otherwise
and having an aggregate purchase price no greater than the amount of cash
proceeds received by ChoicePoint from the sale of common shares under the stock
incentive plan. Such shares may be shares of original issuance or treasury
shares or a combination of the foregoing.
Notwithstanding any other provision of the stock incentive plan to the
contrary, if the amendment to the stock incentive plan for an additional
3,000,000 authorized shares is approved by the shareholders and subject to
adjustment as provided under the stock incentive plan, (i) the aggregate number
of common shares actually issued or transferred by ChoicePoint upon the exercise
of incentive stock options shall not exceed
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15,000,000 shares, (ii) no participant (as defined below) shall be granted
option rights for more than 750,000 common shares during any calendar year; and
(iii) in no event shall any participant in any calendar year receive more than
750,000 appreciation rights.
Notwithstanding any other provision of the stock incentive plan to the
contrary, in no event shall any participant in any calendar year receive an
award of performance shares, performance units or restricted shares that specify
management objectives (as defined below) having an aggregate maximum value as of
their respective dates of grant in excess of $2,000,000.
ELIGIBILITY
Officers and other key employees of ChoicePoint and its subsidiaries, or
anyone who has agreed to commence serving in any of such capacities within 90
days of the date of grant, including each non-employee officer or director who
receives an award of option rights pursuant to the stock incentive plan, or any
other person who renders significant services as a consultant or otherwise, may
be selected by the compensation committee to receive awards under the stock
incentive plan (each, a "participant").
OPTION RIGHTS
Option rights, other than a grant of a replacement award, may be granted
under the stock incentive plan that entitle the optionee to purchase common
shares at a price which shall not be less than 100 percent of the market value
per share on the date of grant.
Each grant of option rights shall specify whether the option price shall be
payable: (i) in cash or by check acceptable to ChoicePoint; (ii) by the actual
or constructive transfer to ChoicePoint of nonforfeitable, unrestricted
ChoicePoint common shares owned by the optionee having a value at the time of
exercise equal to the total option price; or (iii) by a combination of such
methods of payment.
If the compensation committee so determines, at or after the date of grant,
payment of the option price of any option (other than an ISO) may also be made
in whole or in part in the form of restricted shares or other common shares that
are forfeitable or subject to restrictions on transfer, deferred shares,
performance shares (based, in each case, on the market value per share on the
date of exercise), other option rights (based on the spread on the date of
exercise) or performance units. With respect to such payment, unless otherwise
determined by the compensation committee at or after the date of grant, the
common shares received upon the exercise of the option rights shall be subject
to such risks of forfeiture or restrictions on transfer as may correspond to any
that apply to the consideration surrendered, but only to the extent of (i) the
number of shares or performance shares, (ii) the spread of any unexercisable
portion of option rights, or (iii) the stated value of performance units
surrendered.
Any grant may provide for deferred payment of the option price from the
proceeds of sale through a broker on a date satisfactory to ChoicePoint of some
or all of the shares to which such exercise relates.
Any grant may, at or after the date of grant, provide for the automatic
grant of reload option rights to an optionee upon the exercise of option rights
(including reload option rights) using common shares or other consideration
specified in the stock incentive plan. Reload option rights shall cover up to
the number of common shares or other shares granted or awarded under the stock
incentive plan, surrendered to ChoicePoint upon any such exercise in payment of
the option price or to meet any withholding obligations. Reload options shall
specify an option price per share, which shall not be less than 100 percent of
the market value per share on the date of grant of the reload option right, and
shall be on such other terms as may be specified by the compensation committee,
which may be the same as or different from those of the original option rights.
Any grant of option rights may specify management objectives that must be
achieved as a condition to the exercise of such rights.
Option rights granted under the stock incentive plan may be options that
are intended to qualify under particular provisions of the Internal Revenue
Code, options that are not intended to so qualify, or combinations of the
foregoing.
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The compensation committee may, at or after the date of grant of any option
rights (other than the grant of an ISO), provide for the payment of dividend
equivalents to the optionee on either a current or deferred or contingent basis
or may provide that such equivalents shall be credited against the option price.
The exercise of an option right shall result in the cancellation on a
share-for-share basis of any tandem appreciation right authorized under the
stock incentive plan.
Each grant shall specify the term of the option right; provided, however,
that no option right shall be exercisable more than ten years from the date of
grant. Each grant shall specify the period of continuous service with
ChoicePoint or any subsidiary, if any, which is necessary before the option
rights will become exercisable and may provide for the earlier exercise of such
option rights in the event of a change in control (as defined below),
retirement, death or disability of the optionee or other similar transaction or
event. Successive grants may be made to the same optionee whether or not any
option rights previously granted to such optionee remain unexercised.
Each grant of option rights shall be evidenced by an agreement between
ChoicePoint and the optionee containing such terms and provisions, consistent
with the stock incentive plan, as the compensation committee may approve.
APPRECIATION RIGHTS
An appreciation right is a right of the participant to receive from
ChoicePoint an amount which shall be determined by the compensation committee
and shall be expressed as a percentage (not to exceed 100 percent) of the spread
at the time of the exercise of such right. Any grant may specify that the amount
payable on exercise of an appreciation right may be paid by ChoicePoint in cash,
in common shares or in any combination thereof, and may either grant to the
optionee or the compensation committee the right to elect among those
alternatives.
Any grant may specify that the amount payable on exercise of an
appreciation right may not exceed a maximum specified by the compensation
committee at the date of grant. Any grant may specify waiting periods before
exercise and permissible exercise dates or periods.
Any grant may specify that such appreciation right may be exercised only in
the event of a change in control or other similar transaction or event. Any
grant of appreciation rights may specify management objectives that must be
achieved as a condition to exercise such rights.
Each grant of tandem appreciation rights shall provide that a tandem
appreciation right may be exercised only (i) at a time when the related option
right (or any similar right granted under any other plan of ChoicePoint) is also
exercisable and the spread is positive and (ii) by surrender of the related
option right (or such other right) for cancellation. In addition, a tandem
appreciation right awarded in relation to an incentive stock option must be
granted concurrently with such incentive stock option.
Each grant shall specify in respect of each free-standing appreciation
right a base price per common share, which shall be equal to or greater than the
market value per share on the date of grant. Successive grants may be made to
the same participant regardless of whether any free-standing appreciation rights
previously granted to such participant remain unexercised. No free-standing
appreciation right granted under the stock incentive plan may be exercised more
than 10 years from the date of grant.
Each grant of free-standing appreciation rights shall specify the period or
periods of continuous service by the participant with ChoicePoint or any
subsidiary that is necessary before the free-standing appreciation rights or
installments thereof become exercisable, and any grant may provide for the
earlier exercise of such rights in the event of a change in control, retirement,
death or disability of the participant or other similar transaction or event as
approved by the compensation committee.
Each grant of appreciation rights shall be evidenced by an agreement
between ChoicePoint and the participant containing such terms and provisions,
consistent with the stock incentive plan, as the compensation committee may
approve.
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RESTRICTED SHARES
A grant of restricted shares involves the immediate transfer by ChoicePoint
to a participant of ownership of a specific number of common shares in
consideration of the performance of services, entitling such participant to
voting, dividend and other ownership rights in such shares. The transfer may be
made without additional consideration or in consideration of a payment by the
participant that is at or less than the market value per share at the date of
grant.
Restricted shares must be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Internal Revenue Code for a period of
not less than one year to be determined by the compensation committee at the
date of grant, or less than one year if so determined by the compensation
committee in the case of a replacement award. An example would be a provision
that the restricted shares would be forfeited if the participant ceased to serve
ChoicePoint as an officer or key employee during a specified period of years. In
order to enforce these forfeiture provisions, the transferability of restricted
shares will be prohibited or restricted in a manner and to the extent prescribed
by the compensation committee at the date of grant. The compensation committee
may provide for a shorter period during which the forfeiture provisions apply in
the event of a change in control, retirement, or death or disability of the
optionee or other similar transaction or event.
Any grant of restricted shares may specify management objectives which, if
achieved, will result in termination or early termination of the restrictions
applicable to such shares. See "Management Objectives" described below. Each
grant may specify in respect of such specified management objectives, a minimum
acceptable level of achievement and may set forth a formula for determining the
number of restricted shares on which restrictions will terminate if performance
is at or above the minimum level, but below full achievement of the specified
management objectives.
Any such grant or sale of restricted shares may require that any or all
dividends or other distributions paid thereon during the period of such
restrictions be automatically deferred and reinvested in additional restricted
shares, which may be subject to the same restrictions as the underlying award.
Each grant of restricted shares shall be evidenced by an agreement between
ChoicePoint and the participant containing such terms and provisions, consistent
with the stock incentive plan, as the compensation committee may approve.
DEFERRED SHARES
A grant of deferred shares constitutes an agreement by ChoicePoint to
deliver common shares to the participant in the future in consideration of the
performance of services, but subject to the fulfillment of such conditions as
the compensation committee may specify during the deferral period, which period
shall be determined by the compensation committee at the date of grant, but
shall not be less than one year. The compensation committee may provide for a
shorter deferral period in the case of a change in control or other similar
transaction or event. During the deferral period, the participant has no rights
of ownership in the deferred shares, no right to vote such shares and, except as
provided under the stock incentive plan, no right to transfer any rights under
the award, but the compensation committee may, at or after the date of grant,
authorize the payment of dividend equivalents on such shares on either a current
or deferred or contingent basis, either in cash or in additional common shares.
Awards of deferred shares may be made without additional consideration or in
consideration of a payment by such participant that is at or less than the
market value per share at the date of grant.
Each grant of deferred shares shall be evidenced by an agreement between
ChoicePoint and the participant containing such terms and provisions, consistent
with the stock incentive plan, as the compensation committee may approve.
PERFORMANCE SHARES AND PERFORMANCE UNITS
A performance share is the equivalent of one common share and a performance
unit is the equivalent of $1.00. A participant may be awarded any number of
performance shares or performance units, subject to
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certain limitations under the stock incentive plan. Any grant of performance
shares or performance units shall specify management objectives which, if
achieved within a specified period that commences on the date of grant, and
shall not be less than one year, except in the case of a change in control or
other similar transaction or event, as determined by the compensation committee
(the "performance period"), will result in payment or early payment of the
award, and each grant shall specify in respect of such specified one or more
management objectives a minimum acceptable level of achievement and a formula
for determining the number of performance shares or performance units that will
be earned if performance is at or above the minimum level, but falls short of
full achievement of the specified management objectives. Each grant of
performance shares or performance units shall specify that, before the
performance shares or performance units are deemed earned and paid, the
compensation committee must certify that the management objectives have been
satisfied.
Each grant shall specify a minimum acceptable level of achievement in
respect of the specified management objectives below which no payment will be
made and shall set forth a formula for determining the amount of payment to be
made if performance is at or above such minimum but short of full achievement of
the management objectives.
Each grant shall specify the time and manner of payment of performance
shares or performance units which have been earned. Any grant may specify that
the amount payable may be paid in cash or common shares or any combination
thereof and may grant to either the participant or the compensation committee
the right to elect among those alternatives. At or after the date of grant of
performance shares, the compensation committee may provide for the payment of
dividend equivalents to the holder thereof on either a current or deferred or
contingent basis, in cash or in additional common shares. In addition, any grant
of performance shares may specify that the amount payable with respect thereto
may not exceed a maximum specified by the compensation committee at the date of
grant. Any grant of performance units may specify that the amount payable or
number of common shares issued with respect thereto may not exceed maximums
specified by the compensation committee at the date of grant.
Each grant of performance shares or performance units shall be evidenced by
an agreement between ChoicePoint and the participant containing such terms and
provisions, consistent with the stock incentive plan, as the compensation
committee may approve.
AWARDS TO NON-EMPLOYEE OFFICERS OR DIRECTORS
Immediately following his or her initial election to the board of
directors, restricted shares with a fair market value of $25,000, if
unrestricted, shall be granted to each non-employee officer or director. Such
restricted shares shall become transferable and nonforfeitable three years from
the date of grant; provided, however, that such restricted shares shall
immediately become transferable and nonforfeitable in the event of (i) a change
in control, or (ii) the participant's death while a non-employee officer or
director, or (iii) the participant's retirement from the board of directors.
Immediately following each annual meeting of shareholders, 3,000 option
rights shall be granted to each non-employee officer or director, other than the
chairman of the board who shall be granted 5,000 option rights, immediately
following each annual meeting. The exercise price for such option rights shall
be the market value per share on the date of grant. Such option rights shall
become exercisable two years from the date of grant; provided, however, that
such option rights shall immediately become exercisable in the event of (i) a
change in control, or (ii) the participant's death while a non-employee officer
or director, or (iii) the participant's retirement from the board of directors.
Each grant of restricted shares or option rights shall be evidenced by an
agreement between ChoicePoint and the non-employee officer or director
containing such terms and provisions, consistent with the stock incentive plan,
as the compensation committee may approve. In addition, the board of directors
retains the discretion at any time to alter the provisions applicable to awards
to non-employee officers or directors and to add any additional terms as it, in
its discretion, deems appropriate or to make any awards on terms that the board
of directors determines to be appropriate.
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OTHER AWARDS
The compensation committee shall have the authority to specify the terms
and provisions of the other equity-based or equity-related awards not described
above ("other awards") which the compensation committee determines to be
consistent with the purpose of the stock incentive plan and the interests of
ChoicePoint, which awards may provide for the acquisition or future acquisition
of common shares by participants.
MANAGEMENT OBJECTIVES
The stock incentive plan requires that the compensation committee establish
"management objectives" for purposes of performance shares and performance
units. When so determined by the compensation committee, option rights,
appreciation rights, restricted shares and dividend credits may also specify
management objectives. Management objectives may be described in terms of either
ChoicePoint-wide objectives or objectives that are related to the performance of
the individual participant or the subsidiary, division, department, region or
function within ChoicePoint or a subsidiary in which the participant is
employed. Management objectives may be made relative to the performance of other
corporations. Management objectives applicable to an award to a participant who
is, or is determined by the compensation committee likely to become, a "covered
employee" within the meaning of Section 162(m) of the Internal Revenue Code
shall be limited to specified levels of or growth or improvement in the
following criteria: earnings; earnings per share (calculated without regard to
any change in accounting standards that may be required by the Financial
Accounting Standards Board after the goal is established); share price;
shareholder return; return on invested capital, equity or assets; operating
earnings; sales; productivity; cash flow; market share; profit margin; customer
service; and/or economic value added.
Except where a modification would result in an award to a "covered
employee" no longer qualifying as performance-based compensation within the
meaning of Section 162(m) of the Internal Revenue Code, the compensation
committee may modify such management objectives or the related minimum
acceptable level of achievement, in whole or in part, as the compensation
committee deems appropriate and equitable in light of certain events and
circumstances (such as changes in ChoicePoint's business, operations, corporate
structure or capital structure).
TRANSFERABILITY
Except as otherwise determined by the compensation committee, no option
right, appreciation right or other derivative security granted under the stock
incentive plan is transferable by an optionee other than by will or the laws of
descent and distribution. Except as otherwise determined by the compensation
committee, option rights and appreciation rights are exercisable during the
optionee's lifetime only by the optionee or the optionee's guardian or legal
representative.
The compensation committee may specify at the date of grant that part or
all of the common shares that are to be issued or transferred by ChoicePoint
upon exercise of option rights or appreciation rights, upon termination of the
deferral period applicable to deferred shares or upon payment under any grant of
performance shares or performance units or are no longer subject to the
substantial risk of forfeiture and restrictions on transfer referred to in stock
incentive plan, shall be subject to further restrictions on transfer.
ADJUSTMENTS
The compensation committee may make or provide for such adjustments in the
numbers of common shares covered by outstanding option rights, appreciation
rights, deferred shares, performance shares and other awards, the prices per
share applicable thereto, and the kind of shares covered thereby, as the
compensation committee, in its sole discretion and in good faith, determines is
required to prevent dilution or enlargement of participants' rights that
otherwise would result in the event of stock dividends, stock splits,
combinations of shares, recapitalizations, mergers, consolidations, spinoffs,
reorganizations, liquidations, issuances of rights or warrants, and similar
events. In the event of any such transaction or event, the compensation
committee, in its discretion, may provide, in substitution for any or all
outstanding awards under the stock incentive plan,
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such alternative consideration as it, in good faith, may determine to be
equitable in the circumstances and may require the surrender of all awards so
replaced. The compensation committee may also make or provide for such
adjustments in the numbers of shares available for issuance under the stock
incentive plan as the compensation committee may determine appropriate to
reflect any transaction or event described above.
CHANGE IN CONTROL
A "Change in Control" shall mean if at any time any of the following events
shall have occurred:
- ChoicePoint is merged or consolidated or reorganized into or with another
corporation or other legal person, and as a result of such merger,
consolidation or reorganization less than a majority of the combined
voting power of the then-outstanding securities of such corporation or
person immediately after such transaction is held in the aggregate by the
holders of voting shares immediately prior to such transaction;
- ChoicePoint sells or otherwise transfers all or substantially all of its
assets to any other corporation or other legal person, and as a result of
such sale or transfer, less than a majority of the combined voting power
of the then-outstanding securities of such corporation or person
immediately after such sale or transfer is held in the aggregate by the
holders of voting shares immediately prior to such sale or transfer;
- There is a report filed on Schedule 13D or Schedule TO (or any successor
schedule, form or report), each as promulgated pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act"), disclosing that any person (as
the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) has become the beneficial owner (as the term "beneficial
owner" is defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing 30% or
more of the Voting Shares;
- ChoicePoint files a report or proxy statement with the Securities and
Exchange Commission pursuant to the Exchange Act disclosing in response
to Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) that a change in control of ChoicePoint has or may have
occurred or will or may occur in the future pursuant to any then-existing
contract or transaction; or
- If during any period of two consecutive years, individuals who at the
beginning of any such period constitute the directors of ChoicePoint
cease for any reason to constitute at least a majority thereof, unless
the election, or the nomination for election by ChoicePoint's
shareholders, of each director of ChoicePoint first elected during such
period was approved by a vote of at least two-thirds of the directors of
ChoicePoint then still in office who were directors of ChoicePoint at the
beginning of any such period.
- Notwithstanding the foregoing provisions, a "change in control" shall not
be deemed to have occurred for purposes of the stock incentive plan (i)
solely because (A) ChoicePoint, (B) a subsidiary, (C) any
ChoicePoint-sponsored employee stock ownership plan or other employee
benefit plan of ChoicePoint or (D) any employee of ChoicePoint or a
subsidiary, either files or becomes obligated to file a report or proxy
statement under or in response to Schedule 13D, Schedule TO, Form 8-K or
Schedule 14A (or any successor schedule, form or report or item therein)
under the Exchange Act, disclosing beneficial ownership by it of shares
of voting shares, whether in excess of 30% or otherwise, or because
ChoicePoint reports that a change of control of ChoicePoint has or may
have occurred or will or may occur in the future by reason of such
beneficial ownership or (ii) solely because of a change in control of any
subsidiary.
- Notwithstanding the foregoing, if prior to any event described above
instituted by any person who is not an officer or director of
ChoicePoint, or prior to any disclosed proposal instituted by any person
who is not an officer or director of ChoicePoint which could lead to any
such event, management proposes any restructuring of ChoicePoint which
ultimately leads to an event described above pursuant to such management
proposal, then a "change in control" shall not be deemed to have occurred
for purposes of the stock incentive plan.
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ADMINISTRATION
The stock incentive plan is to be administered by a committee of the board
of directors of not less than three non-employee directors. The stock incentive
plan is currently administered by the compensation committee. The compensation
committee is authorized to interpret the stock incentive plan and related
agreements and other documents and such interpretation shall be final and
conclusive.
AMENDMENTS
The compensation committee may amend the stock incentive plan at any time
and from time to time in whole or in part; provided, however, any amendment that
must be approved by the shareholders of ChoicePoint in order to comply with
applicable law or the rules of the principal national securities exchange upon
which the common shares are then trading or quoted will not be effective until
such approval has been obtained.
FOREIGN EMPLOYEES AND PROVIDERS OF SERVICES
The compensation committee may provide for special terms for awards to
participants who are foreign nationals or who are employed by, or provide
services to, ChoicePoint or any of its subsidiaries outside of the United States
of America as the compensation committee may consider necessary or appropriate
to accommodate differences in local law, tax policy or custom. The compensation
committee may approve supplements, amendments, restatements or versions of the
stock incentive plan as it deems necessary for such purposes so long as such
supplements, amendments, restatements and versions are consistent with the stock
incentive plan.
TERMINATION
No grant (other than an automatic grant of reload option rights) shall be
made under the stock incentive plan more than ten years after the date on which
the stock incentive plan is first approved by shareholders of ChoicePoint, but
all grants made on or before such date shall continue in effect thereafter
subject to the terms thereof and of the stock incentive plan.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the stock incentive plan based on
federal income tax laws in effect on January 1, 2001. This summary is not
intended to be complete and does not describe state or local tax consequences.
Section 162(m) Considerations
Section 162(m) of the Internal Revenue Code disallows a publicly held
company's deduction for compensation in excess of $1 million (per taxable year)
paid to ChoicePoint's chief executive officer and other four most highly
compensated executives unless certain exceptions are satisfied. One of these
exceptions allows for the deduction of performance-based compensation in excess
of $1 million where a number of criteria are satisfied. These criteria include
(i) payment only on satisfaction of one or more pre-established,
non-discretionary, objective performance goals; (ii) awards being granted at the
discretion of a compensation committee comprised of two or more "outside
directors" (as defined under Section 162(m) of the Internal Revenue Code); (iii)
stockholder approval after disclosure of material terms of the plan; and (iv)
payment of awards only after certification by the compensation committee that
the material terms were satisfied.
Under the stock incentive plan, awards of option rights generally are
intended to qualify, and awards of restricted shares and performance shares may
be intended to qualify, as performance-based compensation under Section 162(m)
of the Internal Revenue Code.
Shareholder approval of the stock incentive plan is, therefore, required in
order for ChoicePoint to comply with the performance-based compensation
exception set forth in Section 162(m) and the regulations thereunder, and to
permit, to the extent possible, the compensation paid under the stock incentive
plan to be
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fully deductible by ChoicePoint. Shareholder approval of the original stock
incentive plan was obtained at ChoicePoint's 1999 annual meeting of
shareholders, and shareholder approval of the amendment to the stock incentive
plan increasing the number of shares of common stock under the plan from
12,000,000 to 15,000,000 is being sought at ChoicePoint's 2001 annual meeting of
shareholders.
Tax Consequences to Participants
Non-Qualified Stock Options. In general, (i) no income will be recognized
by an optionee at the time a non-qualified option right is granted; (ii) at the
time of exercise of a non-qualified option right, ordinary income will be
recognized by the optionee in an amount equal to the difference between the
option price paid for the shares and the fair market value of the shares, if
unrestricted, on the date of exercise; and (iii) at the time of sale of shares
acquired pursuant to the exercise of a non-qualified option right, appreciation
(or depreciation) in value of the shares after the date of exercise will be
treated as either short-term or long-term capital gain (or loss) depending on
how long the shares have been held.
Incentive Stock Options. No income generally will be recognized by an
optionee upon the grant or exercise of an ISO. If common shares are issued to
the optionee pursuant to the exercise of an ISO, and if no disqualifying
disposition of such shares is made by such optionee within two years after the
date of grant or within one year after the transfer of such shares to the
optionee, then upon sale of such shares, any amount realized in excess of the
option price will be taxed to the optionee as a long-term capital gain and any
loss sustained will be a long-term capital loss.
If common shares acquired upon the exercise of an ISO are disposed of prior
to the expiration of either holding period described above, the optionee
generally will recognize ordinary income in the year of disposition in an amount
equal to the excess (if any) of the fair market value of such shares at the time
of exercise (or, if less, the amount realized on the disposition of such shares
if a sale or exchange) over the option price paid for such shares. Any further
gain (or loss) realized by the participant generally will be taxed as short-term
or long-term capital gain (or loss) depending on the holding period.
Appreciation Rights. No income will be recognized by a participant in
connection with the grant of a tandem appreciation right or a free-standing
appreciation right. When the appreciation right is exercised, the participant
normally will be required to include as taxable ordinary income in the year of
exercise an amount equal to the amount of cash received and the fair market
value of any unrestricted common shares received on the exercise.
Restricted Shares. A recipient of restricted shares generally will be
subject to tax at ordinary income rates on the fair market value of the
restricted shares (reduced by any amount paid by the participant for such
restricted shares) at such time as the shares are no longer subject to
forfeiture or restrictions on transfer for purposes of Section 83 of the
Internal Revenue Code ("restrictions"). However, a recipient who so elects under
Section 83(b) of the Internal Revenue Code within 30 days of the date of
transfer of the shares will have taxable ordinary income on the date of transfer
of the shares equal to the excess of the fair market value of such shares
(determined without regard to the restrictions) over the purchase price, if any,
of such restricted shares. If a Section 83(b) election has not been made, any
dividends received with respect to restricted shares generally will be treated
as compensation that is taxable as ordinary income to the participant.
Deferred Shares. No income generally will be recognized upon the award of
deferred shares. The recipient of a deferred share award generally will be
subject to tax at ordinary income rates on the fair market value of unrestricted
common shares on the date that such shares are transferred to the participant
under the award (reduced by any amount paid by the participant for such deferred
shares), and the capital gains/loss holding period for such shares will also
commence on such date.
Performance Shares and Performance Units. No income generally will be
recognized upon the grant of performance shares or performance units. Upon
payment in respect of the earn-out of performance shares or performance units,
the recipient generally will be required to include as taxable ordinary income
in the year
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of receipt an amount equal to the amount of cash received and the fair market
value of any unrestricted common shares received.
Tax Consequences to ChoicePoint or a Subsidiary
To the extent that a participant recognizes ordinary income in the
circumstances described above, ChoicePoint or subsidiary for which the
participant performs services will be entitled to a corresponding deduction
provided that, among other things, the income meets the test of reasonableness,
is an ordinary and necessary business expense, is not an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code and is
not disallowed by the $1,000,000 limitation on certain executive compensation
under Section 162(m) of the Internal Revenue Code.
CERTAIN DEFINED TERMS
As used in this section of the proxy statement, the following terms have
the meanings set forth below:
"Appreciation right" means a stock appreciation right granted pursuant to
the stock incentive plan, including a free-standing appreciation right or a
tandem appreciation right.
"Base price" means the price to be used as the basis for determining the
spread upon the exercise of a free-standing appreciation right.
"Common shares" means shares of common stock, or any security into which
common stock may be changed by reason of certain transactions or events
specified in the stock incentive plan.
"Covered employee" means a participant who is, or is determined by the
compensation committee to be likely to become, a "covered employee" within the
meaning of Section 162(m) of the Internal Revenue Code (or any successor
provision).
"Date of grant" means the date specified by the compensation committee on
which a grant of option rights, appreciation rights, performance shares or
performance units or a grant or sale of restricted shares or deferred shares
shall become effective.
"Deferral period" means the period of time during which deferred shares are
subject to deferral limitations under the stock incentive plan.
"Free-standing appreciation right" means an appreciation right granted
pursuant to the stock incentive plan that is not granted in tandem with an
option right or similar right.
"Incentive stock options" or "ISOs" means option rights that are intended
to qualify as "incentive stock options" under Section 422 of the Internal
Revenue Code or any successor provision.
"Market value per share" means, as of any particular date, the fair market
value of the common shares as determined by the compensation committee, which at
the discretion of the compensation committee may be based on an average price at
which the common shares have traded over a period of time specified by the
compensation committee or any price or combination of prices on a particular
date specified by the compensation committee. In any case in which the
compensation committee has not established a specific procedure, market value
per share shall be the mean of the high and low trading prices for the common
shares on a national stock exchange on the date in question.
"Non-employee officer or director" means an officer or director of
ChoicePoint who is not an employee.
"Optionee" means the optionee named in an agreement evidencing an
outstanding option right.
"Option price" means the purchase price payable on exercise of an option
right.
"Option right" means the right to purchase common shares upon exercise of
an option granted pursuant to the stock incentive plan.
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"Performance period" means, in respect of a performance share or
performance unit, a period of time established pursuant to the stock incentive
plan within which the management objectives relating to such performance share
or performance unit are to be achieved.
"Performance share" means a bookkeeping entry that records the equivalent
of one common share awarded pursuant to the stock incentive plan.
"Performance unit" means a bookkeeping entry that records a unit equivalent
to $1.00 awarded pursuant to the stock incentive plan.
"Reload option rights" means additional option rights granted automatically
to an optionee upon the exercise of option rights pursuant to the stock
incentive plan.
"Replacement awards" means option rights or restricted shares that are
issued in substitution of awards of option rights or restricted shares that were
granted under the Equifax Inc. Omnibus Stock Incentive Plan, the Equifax Inc.
1993 Employee Stock Incentive Plan or the Equifax Inc. 1995 Employee Stock
Incentive Plan to former employees of Equifax or subsidiaries of Equifax who
were employees of ChoicePoint as of the date of the ChoicePoint spinoff from
Equifax Inc. or who became employees of ChoicePoint pursuant to the spinoff.
"Restricted shares" means common shares granted or sold pursuant to the
stock incentive plan as to which neither the substantial risk of forfeiture nor
the prohibition on transfers has expired.
"Spread" means the excess of the market value per share of the common
shares on the date when an appreciation right is exercised, or on the date when
option rights are surrendered in payment of the option price of other option
rights, over the option price provided for in the related option right.
"Subsidiary" means a corporation, company or other entity (i) more than 50
percent of whose outstanding shares or securities (representing the right to
vote for the election of directors or other managing authority) are, or (ii)
which does not have outstanding shares or securities (as may be the case in a
partnership, joint venture or unincorporated association), but more than 50
percent of whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by ChoicePoint except that for purposes of determining
whether any person may be a participant for purposes of any grant of incentive
stock options, "subsidiary" means any corporation in which at the time
ChoicePoint owns or controls, directly or indirectly, more than 50 percent of
the total combined voting power represented by all classes of stock issued by
such corporation.
"Tandem appreciation right" means an appreciation right granted pursuant to
the stock incentive plan that is granted in tandem with an option right or any
similar right granted under any other plan of ChoicePoint.
"Voting shares" means at any time, the then-outstanding securities entitled
to vote generally in the election of directors of ChoicePoint.
PLAN BENEFITS
It is not possible to determine the specific awards that will be granted
under the stock incentive plan in the future. As of February 28, 2001, the
following information was available regarding awards previously made under the
plan: Derek V. Smith, Chairman, President and Chief Executive Officer, had
options to acquire 2,273,745 shares of ChoicePoint common stock and owned
182,715 shares of restricted ChoicePoint common stock; Douglas C. Curling, Chief
Operating Officer, had options to acquire 774,132 shares of ChoicePoint common
stock and owned 61,371 shares of restricted ChoicePoint common stock; Dan H.
Rocco, Executive Vice President, had options to acquire 524,761 shares of
ChoicePoint common stock and owned 41,124 shares of restricted ChoicePoint
common stock; David T. Lee, Executive Vice President, had options to acquire
395,115 shares of ChoicePoint common stock and owned 17,499 shares of restricted
ChoicePoint common stock; Michael S. Wood, Chief Financial Officer, had options
to acquire 52,500 shares of ChoicePoint common stock and owned no shares of
restricted ChoicePoint common stock; all ChoicePoint executive officers (7
persons) had options to acquire 4,327,180 shares of ChoicePoint common stock and
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owned 313,395 shares of restricted ChoicePoint common stock; all non-executive
ChoicePoint directors (9 persons) had options to acquire 480,591 shares of
ChoicePoint common stock and owned 4,169 shares of restricted ChoicePoint common
stock; and all ChoicePoint employees, excluding ChoicePoint executive officers
(1,086 persons), had options to acquire 5,521,569 shares of ChoicePoint common
stock and owned 51,249 shares of restricted ChoicePoint common stock.
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RATIFICATION OF APPOINTMENT OF
CHOICEPOINT INDEPENDENT PUBLIC ACCOUNTANTS
The ChoicePoint board of directors has selected Arthur Andersen LLP as
ChoicePoint's independent public accountants for the fiscal year ending December
31, 2001 and recommends that the shareholders vote for the ratification of such
appointment. Notwithstanding the selection, the board of directors, in its
discretion, may direct the appointment of new independent public accountants at
any time during the year if the board of directors determines that such a change
would be in the best interests of ChoicePoint and its shareholders. A
representative of Arthur Andersen LLP will be present at the annual meeting,
will have an opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
THE CHOICEPOINT BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS CHOICEPOINT'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2001.
AUDIT FEES, FINANCIAL INFORMATION SYSTEM FEES AND OTHER FEES
During fiscal year 2000, ChoicePoint retained Arthur Andersen LLP to
provide services in the following categories and amounts:
Audit Fees.................................................. $300,000
Financial Information Systems Design & Implementation
Fees...................................................... $ 0
All Other Fees.............................................. $443,000
The audit committee considered whether the provision of non-audit services
by the independent auditors is compatible with maintaining auditor independence.
OTHER MATTERS
CHOICEPOINT SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the proxy statement for
ChoicePoint's 2002 annual meeting of shareholders must be received by
ChoicePoint at its principal executive offices on or before November 26, 2001.
For a shareholder proposal to be properly brought before ChoicePoint's 2002
annual meeting of shareholders (other than a proposal to be considered for
inclusion in the proxy statement for ChoicePoint's 2002 annual meeting of
shareholders), it must be received by ChoicePoint at its principal executive
offices on or before November 26, 2001. In accordance with the rules of the
Securities and Exchange Commission and ChoicePoint's bylaws, ChoicePoint may
exercise discretionary authority to vote proxies with respect to any shareholder
proposal to be presented at ChoicePoint's 2002 annual meeting of shareholders,
but not included in ChoicePoint's proxy statement for such meeting, if the
shareholder making the proposal has not given notice to ChoicePoint by February
9, 2002.
CHOICEPOINT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act and the regulations of the Securities and
Exchange Commission require ChoicePoint's executive officers, directors and
persons who beneficially own more than 10% of the ChoicePoint common stock to
file initial reports of ownership and changes in ownership of the ChoicePoint
common stock with the Securities and Exchange Commission and the New York Stock
Exchange. Executive officers, directors and ChoicePoint 10% shareholders are
required by the regulations of the Securities and Exchange Commission to furnish
ChoicePoint with copies of all reports that they file pursuant to Section 16(a).
In addition, Item 405 of Regulation S-K requires ChoicePoint to identify in its
Proxy Statement each reporting person that failed to file on a timely basis
reports required by Section 16(a) during the most recent fiscal year or prior
fiscal years. To ChoicePoint's knowledge, based upon a review of the copies of
such forms furnished to ChoicePoint and written representations from
ChoicePoint's executive officers and
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directors, all filing requirements applicable to ChoicePoint's executive
officers, directors and persons who beneficially own more than 10% of the
ChoicePoint common stock were complied with for 2000.
ANNUAL REPORT TO SHAREHOLDERS/ANNUAL REPORT ON FORM 10-K
The Annual Report to Shareholders of ChoicePoint Inc. for the year ended
December 31, 2000, including audited financial statements, accompanies this
proxy statement. The Annual Report does not form any part of the material for
the solicitation of proxies. Additionally, ChoicePoint files an Annual Report on
Form 10-K with the Securities and Exchange Commission. A COPY OF CHOICEPOINT'S
MOST RECENT FORM 10-K REPORT WILL BE FURNISHED WITHOUT CHARGE TO ANY SHAREHOLDER
WHO MAKES WRITTEN REQUEST TO THE OFFICE OF THE CORPORATE SECRETARY, CHOICEPOINT
INC., 1000 ALDERMAN DRIVE, ALPHARETTA, GEORGIA 30005.
OTHER MATTERS
ChoicePoint is unaware of any matter to be presented at the ChoicePoint
annual meeting other than as described in this proxy statement. If other matters
are properly presented at the ChoicePoint annual meeting, the persons named in
the enclosed form of proxy will have authority to vote all properly executed
proxies in accordance with their judgment on any such matter, including, without
limitation, any proposal to adjourn or postpone the ChoicePoint annual meeting.
EXPENSES OF SOLICITATION
ChoicePoint has retained Morrow & Co., Inc. to aid in the solicitation of
proxies. ChoicePoint estimates the cost of these services to be approximately
$6,000, plus out-of-pocket expenses. The cost of soliciting proxies will be
borne by ChoicePoint. Proxies may be solicited by personal interview, mail or
telephone. In addition, ChoicePoint may reimburse brokerage firms and other
persons representing beneficial owners of shares of ChoicePoint common stock for
their expenses in forwarding solicitation materials to beneficial owners.
Proxies may also be solicited by ChoicePoint's executive officers, directors and
regular employees, without additional compensation, personally or by telephone
or facsimile transmission.
By Order of the Board of Directors,
/S/ J. MICHAEL DE JANES
J. Michael de Janes
Corporate Secretary
Alpharetta, Georgia
March 26, 2001
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ANNEX A
CHOICEPOINT INC.
AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS CHARTER
There shall be an Audit Committee of the Board of Directors (the
"Committee"), which shall serve at the pleasure of the Board of Directors and be
subject to its control. The Committee shall have the following membership and
powers:
1. The Committee shall have at least three members comprised of outside
Directors, each of whom shall be financially literate. These directors
shall be independent of the management of the Company and free of any
relationship that, in the opinion of the Board of Directors, would
interfere with their exercise of independent judgment as a committee
member.
2. The Committee shall review and update, if necessary, its charter on an
annual basis and request approval of the charter, or any changes to the
charter, by the Board of Directors.
3. The Committee shall meet a minimum of three times per year, or more
frequently as circumstances require.
4. The Committee shall review and discuss with the independent auditors the
independence of the auditors and shall recommend to the Board of
Directors for its action the appointment or discharge of the Company's
independent auditors, who will be accountable to the Board of Directors.
Pending approval by the Board of Directors, the Committee's
recommendation to appoint the Company's independent auditors shall also
be presented to the shareholders for approval at each annual meeting. If
the auditors must be replaced, the Committee shall recommend to the
Board of Directors for its action the appointment of new auditors until
the next annual meeting of shareholders.
5. When necessary, the Committee shall review and concur in the
appointment, replacement, reassignment, or dismissal of the Vice
President of Internal Audit.
6. The Committee shall review and approve the scope and plan of the
Company's audit and shall annually review and discuss with the auditors
the judgments about the quality of the Company's accounting principles
as applied in its financial reporting.
7. The Committee shall review with the independent auditors and the Vice
President of Internal Audit the coordination of audit efforts to assure
completeness of coverage, reduction of redundant efforts, and the
effective use of audit resources.
8. The Committee shall meet with the independent auditors at appropriate
times to review, among other things, the results of the audit, the
Company's financial statements and any certification, report, or opinion
that the auditors propose to render in connection with such statements.
9. Management shall review with the chairman, or the full committee when
either the chairman or management deems it appropriate, all proposed
earnings releases, the annual report, Form 10-K, proxy statement and any
other SEC filings containing new or amended disclosures which are or
could be material.
10. The Committee shall annually review and confirm the independence and
objectivity of the outside auditors and receive a formal written
statement from the auditor regarding its independence and objectivity.
11. The Committee shall meet with the Company's Vice President of Internal
Audit at appropriate times to review the results of completed audits,
the status of any unresolved audit recommendations, the adequacy of the
Company's system of internal controls and such other matters as the
Committee may deem appropriate.
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12. The Committee shall meet with the Company's General Counsel at
appropriate times to review the status of material litigation and
corporate compliance in general. The Committee shall annually review
compliance with the Corporate Code of Conduct.
13. The Committee shall review the adequacy of internal controls and
procedures related to executive travel and entertainment, including the
use of Company assets. The Committee shall have the power to direct the
independent auditors and the internal audit staff to inquire into and
report to it with respect to any of the Company's contracts,
transactions, or procedures, or the conduct of the parent company, or
any division, profit center, subsidiary, or other unit, or any other
matter having to do with the Company's business and affairs. The
Committee is not expected to initiate or conduct special investigations
in these regards unless specifically requested to do so by the Board of
Directors.
14. The Committee is not expected to resolve disagreements, if any, between
management and the independent public accountants.
15. The Committee is not required to plan or conduct audits to determine
that the Company's financial statements are complete and accurate and
are in accordance with generally accepted accounting principles. This
is the responsibility of management and the independent public
accountants.
16. The Committee shall review fees charged for both audit and nonaudit
services and approve each professional service engagement of a nonaudit
nature to be provided by the outside auditors with fees in excess of
$100,000.
17. The Committee shall have such other duties as may be lawfully delegated
to it from time to time by the Board of Directors.
Approved and adopted this 24th day of October, 2000.
/s/ JAMES. M. DENNY
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James M. Denny
Chairman, Audit Committee
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APPENDIX A
CHOICEPOINT INC.
The undersigned hereby appoints Douglas C. Curling, J. Michael de Janes,
and Derek V. Smith, and each of them, to act, with or without the other and with
full power of substitution and revocation, as proxies to appear and vote on
behalf of the undersigned at the Annual Meeting of Shareholders of ChoicePoint
Inc. to be held on May 2, 2001 at 11:00 a.m. local time, and at any adjournment
or postponement thereof, for the following purposes:
1. Election of Directors
[ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below). to vote for all nominees listed below.
Thomas M. Coughlin, Douglas C. Curling; Bonnie G. Hill;
Kenneth G. Langone; Derek V. Smith
(INSTRUCTION: To withhold authority to vote for any individual nominee(s), write
the name(s) of such nominee(s) immediately below.)
- --------------------------------------------------------------------------------
2. Proposal to approve an amendment to the ChoicePoint Inc. 1997 Omnibus
Stock Incentive Plan to increase the number of shares of common stock that may
be issued under the plan from 12,000,000 to 15,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the appointment of Arthur Andersen LLP as independent
public accountants for ChoicePoint for the year ending December 31, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued on reverse -- please complete other side)
(continued from other side)
4. In their discretion, upon such other matters in connection with the
foregoing or otherwise as may properly come before the meeting and any
adjournment or postponement thereof; all as set forth in the Notice of Annual
Meeting of Shareholders and the Proxy Statement, receipt of which is hereby
acknowledged.
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS INDICATED,
WILL BE VOTED "FOR" THE ABOVE MATTERS.
THIS PROXY IS SOLICITED ON BEHALF OF THE CHOICEPOINT BOARD OF DIRECTORS.
Dated:
---------------------, 2001
------------------------------
Signature
------------------------------
Signature if held jointly
IMPORTANT: Please date
this proxy and sign exactly as
your name or names appear
above. If stock is held
jointly, signature should
include both names. Executors,
administrators, trustees,
guardians and others signing
in a representative capacity,
please give your full
title(s).
Do you plan to attend the Annual Meeting of Shareholders? [ ] Yes [ ] No
IMPORTANT: PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME OR NAMES APPEAR ABOVE.
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APPENDIX B
FIRST AMENDMENT TO THE
CHOICEPOINT INC.
1997 OMNIBUS STOCK INCENTIVE PLAN
THIS AMENDMENT to the ChoicePoint Inc. 1997 Omnibus Stock Incentive
Plan is made this _____ day of _________________, 2001, by ChoicePoint Inc., as
authorized by the Compensation Committee of its Board of Directors on January
31, 2001. This amendment shall not be effective until approved by the vote of a
majority of the shareholders of ChoicePoint Inc. present in person or by proxy
at a meeting thereof.
I.
Subsections 3(a) and 3(d) are hereby amended by increasing the number
of shares contained in said sections by 3,000,000, so that the number
12,000,000 (having been increased by virtue of prior stock splits from the
original number of 4,000,000) shall be 15,000,000 in each of said subsections.
II.
The remaining provisions of said Plan are hereby ratified and
confirmed.
IN WITNESS WHEREOF, the Company has executed this Amendment the day
and year first above mentioned.
CHOICEPOINT INC.
By:
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Title:
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