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:
<Table>
[ ] 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
</Table>
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:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
(choice Point Logo)
CHOICEPOINT INC.
1000 ALDERMAN DRIVE
ALPHARETTA, GEORGIA 30005
March 22, 2002
Dear Shareholders,
You are cordially invited to attend the 2002 annual meeting of shareholders
of ChoicePoint Inc., which will be held at ChoicePoint's principal executive
offices, 1000 Alderman Drive, Alpharetta, Georgia, on Thursday, April 25, 2002
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/ Dereck V. Smith
DEREK V. SMITH
Chairman, President and Chief
Executive Officer
Alpharetta, Georgia
March 22, 2002
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY.
CHOICEPOINT INC.
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 25, 2002
---------------------
NOTICE IS HEREBY GIVEN that ChoicePoint Inc. will hold the annual meeting
of its shareholders on Thursday, April 25, 2002 at 11:00 a.m. local time, for
the following purposes:
(1) To elect three directors for terms expiring in 2005;
(2) To ratify the appointment of independent public accountants; and
(3) 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 4, 2002 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 22, 2002
CHOICEPOINT INC.
1000 ALDERMAN DRIVE
ALPHARETTA, GEORGIA 30005
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 2002
The 2002 Annual Meeting of Shareholders of ChoicePoint Inc. ("ChoicePoint"
or the "Company") will be held on April 25, 2002, 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 22, 2002.
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 three directors and (2)
the ratification of the appointment of Deloitte & Touche 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 4, 2002 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 also vote in person at the annual meeting. Written ballots will be
available to anyone who wants to vote at the annual meeting. If you hold your
shares in "street name" (through a broker or other nominee, such as a bank), you
must request a legal proxy from your stockbroker in order to vote at the annual
meeting.
HOW MANY SHARES REPRESENTED DO YOU NEED TO HOLD THE ANNUAL MEETING?
As of March 4, 2002, 63,686,893 shares of common stock were issued and
outstanding. Holders of a majority of the outstanding shares as of the record
date, equal to 31,843,447 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 three nominees for director;
- WITHHOLD AUTHORITY to vote for the three 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 three 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 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.
2
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 Deloitte & Touche
LLP as ChoicePoint's independent public accountants for fiscal year 2002, 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 three named director nominees 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 and the ratification of independent
public accountants. 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 also 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. You
are not being asked to vote on any non-routine matters at the annual meeting.
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 2002. 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.
3
ELECTION OF CHOICEPOINT DIRECTORS
The ChoicePoint board of directors has fixed the number of ChoicePoint
directors at ten. 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 Ron D. Barbaro, Charles G.
Betty, and Bernard Marcus will expire at the ChoicePoint annual meeting. Messrs.
Barbaro and Betty will retire from the board of directors effective at the
ChoicePoint annual meeting and therefore will not stand for reelection to the
board of directors.
The corporate governance and nominating committee has nominated Mr. Marcus
to stand for reelection at the ChoicePoint annual meeting and Dr. John J. Hamre
and Mr. Terrence Murray to stand for election to fill the vacancies that will be
created by the retirement of Messrs. Barbaro and Betty from the board of
directors.
Mr. Marcus is currently a director of ChoicePoint and has consented to
continue to serve as a director if reelected. Dr. Hamre and Mr. Murray are not
currently directors of ChoicePoint, but both have 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 2003 and 2004.
NOMINEES FOR TERMS EXPIRING IN 2005
Dr. John J. Hamre, 51, has been nominated to serve as a director of
ChoicePoint. Dr. Hamre has served as President and Chief Executive Officer of
the Center for Strategic and International Studies ("CSIS"), a non-partisan,
non-profit research institute, since January 2000. Dr. Hamre served as U.S.
Deputy Secretary of Defense from 1997 until 1999 and as Comptroller under the
Secretary of Defense from 1993 to 1997. Dr. Hamre received his Ph.D., with
distinction, in 1978 from the School of Advanced International Studies, John
Hopkins University.
Bernard Marcus, 72, has served as a director of ChoicePoint since May 2000.
Mr. Marcus is a co-founder and a director of The Home Depot, Inc. and served as
Chairman of the Board since its inception in 1978 until December 31, 2001. 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.
Terrence Murray, 62, has been nominated to serve as a director of
ChoicePoint. Mr. Murray has served as Chairman of the Board of FleetBoston
Financial Corporation since 1982, except from 1988 to 1989 and from 1995 to
1996, when he served as President. He served as Chief Executive Officer from
1982 until December 2001, except from 1988 to 1989, when he served as Chief
Operating Officer. Mr. Murray also serves as a director of A. T. Cross Company,
a producer of writing instruments, Allmerica Financial Corporation, a financial
services company, and CVS Corporation, a retail drugstore chain.
THE CHOICEPOINT BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
DR. HAMRE AND MESSRS. MARCUS AND MURRAY AS DIRECTORS TO HOLD OFFICE UNTIL THE
2005 MEETING OF SHAREHOLDERS, OR UNTIL THEIR RESPECTIVE SUCCESSORS ARE ELECTED
AND HAVE QUALIFIED.
4
INCUMBENT DIRECTORS WHOSE TERMS WILL EXPIRE IN 2003
Douglas C. Curling, 47, 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.
James M. Denny, 69, has served as a director of ChoicePoint since June
1997. From September 1995 to December 2000, Mr. Denny was Senior Advisor to
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.
Kenneth G. Langone, 66, 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 producer of textile
yarns, Tricon Global Restaurants, Inc., a food services company, and several
private corporations.
Charles I. Story, 47, 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.
INCUMBENT DIRECTORS WHOSE TERMS WILL EXPIRE IN 2004
Thomas M. Coughlin, 52, 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, 60, has served as a director of ChoicePoint since May 2001.
Ms. Hill has served as President of B. Hill Enterprises LLC, a corporate
governance consulting firm, since July 2001. She served as President and Chief
Executive Officer of The Times Mirror Foundation, a charitable foundation
affiliated with Tribune Company, from 1997 to 2001 and as Senior Vice President,
Communications and Public Affairs, of The Los Angeles Times from 1998 to 2001.
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, 47, 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. He also serves as a director of Metris
Companies Inc., a direct marketer of consumer-based services, and The Stanley
Works, a producer of tools and door products.
BOARD MEETINGS AND COMMITTEES
The board of directors of ChoicePoint met four times during 2001. The board
of directors has established several standing committees, which met at various
intervals as indicated below. Until the creation of the corporate governance and
nominating committee in January 2002, nominees for election to the board of
directors were selected and nominated by the executive committee of the board of
directors,
5
which was 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. Smith (Chairman), Denny
and Marcus. The executive committee met once during 2001. 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 the 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, until the creation of the corporate governance and
nominating committee in January 2002, the executive committee was 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 2001. 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 2001. 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 Ms. Hill (Chairman) and Messrs.
Coughlin and Curling. The privacy committee met once in 2001. This committee is
responsible for reviewing and monitoring legislation and recommending policies
to the board of directors as to privacy matters affecting ChoicePoint.
CORPORATE GOVERNANCE AND NOMINATING COMMITTEE
The members of the corporate governance and nominating committee are
Messrs. Langone (Chairman) and Coughlin and Ms. Hill. The corporate governance
and nominating committee was created in January 2002 to identify corporate
governance issues, create corporate governance policies, identify and recommend
potential candidates for election to the Board and review director compensation.
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. In 2001, each other ChoicePoint non-employee director was
paid an annual fee of $20,000 for services as a director, an additional fee of
$1,000
6
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. Derek V.
Smith became Chairman of the board of directors in May 1999 and Doug C. Curling,
Chief Operating Officer, became a member of the board of directors in 2000 and,
because they are salaried officers of ChoicePoint, do not receive this
compensation. Effective January 1, 2002, the annual retainer for a non-employee
Chairman was increased from $30,000 to $40,000 and for non-employee directors
the annual retainer was increased from $20,000 to $32,000.
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 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 5,000 shares of ChoicePoint common stock and the chairman of the board
of directors receives annual stock option awards of 7,500 shares. However,
Messrs. Smith and Curling do not receive these awards because they are salaried
employees of ChoicePoint. 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.
7
CHOICEPOINT SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table reflects information, as of March 1, 2002, 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 March 1, 2002 was 63,686,093. 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.
<Table>
<Caption>
NUMBER OF PERCENT OF
NAME AND ADDRESS SHARES(1) CLASS
- ---------------- --------- ----------
FMR Corp. .................................................. 9,174,440(2) 14.4%
Edward C. Johnson 3rd
Abigail P. Johnson
82 Devonshire Street
Boston, MA 02109
Baron Capital Group, Inc.................................... 8,416,753(3) 13.2
BAMCO, Inc.
Baron Capital Management, Inc.
Baron Asset Fund
Ronald Baron
767 Fifth Avenue
New York, NY 10153
Ron D. Barbaro.............................................. 22,158 *
Charles G. Betty............................................ 40,665 *
Thomas M. Coughlin.......................................... 673 *
Douglas C. Curling.......................................... 738,479(4) 1.2
J. Michael de Janes......................................... 194,188(5) *
James M. Denny.............................................. 20,184 *
John J. Hamre............................................... 0 *
Bonnie G. Hill.............................................. 1,363 *
Kenneth G. Langone.......................................... 1,533,386(6) 2.4
David T. Lee................................................ 396,040 *
Bernard Marcus.............................................. 91,342 *
Terrence Murray............................................. 0 *
Derek V. Smith.............................................. 2,338,282(7) 3.7
Charles I. Story............................................ 20,184 *
Michael S. Wood............................................. 32,187 *
All Executive Officers, Directors, and Nominees as a Group
(16 persons).............................................. 5,532,790 8.7
</Table>
- ---------------
* Represents beneficial ownership of less than 1% of the outstanding
ChoicePoint common stock.
(1) Includes shares issuable pursuant to stock options exercisable on March 1,
2002, or within 60 days thereafter, as follows: Mr. Barbaro -- 18,000
shares; Mr. Betty -- 39,375 shares; Mr. Curling -- 494,547 shares; Mr. de
Janes -- 165,093 shares; Mr. Denny -- 18,000 shares; Mr. Langone -- 157,500
8
shares; Mr. Lee -- 294,563 shares; Mr. Marcus -- 39,375 shares; Mr.
Smith -- 1,719,435 shares; Mr. Story -- 18,000 shares; and Mr.
Wood -- 16,875 shares. Also includes shares issuable pursuant to stock
options with respect to which it is assumed the performance-based criteria
will be met within 60 days of March 1, 2002, resulting in the vesting of
additional stock options as follows: Mr. Curling -- 93,750 shares; Mr. de
Janes -- 9,375 shares; Mr. Lee -- 26,250 shares; Mr. Smith -- 187,500 shares
and Mr. Wood -- 9,375 shares.
(2) This information is based on a Schedule 13G filed with the Securities and
Exchange Commission on February 14, 2002. 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 8,980,300 shares of ChoicePoint common stock.
(3) This information is based on a Schedule 13G filed with the Securities and
Exchange Commission on February 12, 2002. 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 7,836,753 shares of ChoicePoint common stock.
(4) Includes 300 shares held in a custodial account for a minor son, 300 shares
held in a custodial account for a minor daughter and 400 shares held in
custodial account for a minor son.
(5) Includes 75 shares owned by his wife.
(6) Includes 728,665 shares owned by Invemed Securities, Inc. and 157 shares
owned by his wife. Mr. Langone is Chairman of Invemed Securities, Inc.
(7) Includes 300 shares owned by his wife and 28,438 shares held in a trust.
9
CHOICEPOINT EXECUTIVE COMPENSATION
SUMMARY OF CASH AND OTHER COMPENSATION
The following table shows, for the fiscal years ended December 31, 2001,
2000 and 1999, 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.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM COMPENSATION
---------------------------------------
AWARDS PAYOUTS
ANNUAL -------------------------- ----------
COMPENSATION 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............. 2001 $817,306 $1,500,000 $3,217,500 375,000 $ -- $1,021,692
Chairman, President 2000 637,884 1,600,000 -- 225,000 -- 723,689
and CEO 1999 465,867 917,000 1,585,815 330,000 2,702,898 501,892
Douglas C. Curling......... 2001 465,383 725,000 1,608,750 187,500 -- 332,470
Chief Operating 2000 370,007 780,000 -- 112,500 -- 266,187
Officer 1999 280,405 465,000 726,626 165,000 756,585 171,490
David T. Lee............... 2001 252,499 275,000 429,000 52,500 -- 114,458
Executive Vice 2000 216,542 300,000 -- 52,500 -- 99,914
President 1999 196,494 235,000 171,282 82,500 -- 83,869
Michael S. Wood............ 2001 225,000 125,000 -- 26,250 -- 20,625
Chief Financial 2000 197,308 140,000 -- 26,250 -- 8,698
Officer 1999 -- -- -- -- -- --
J. Michael de Janes........ 2001 212,498 150,000 214,500 18,750 -- 34,614
General Counsel & 2000 181,524 147,500 -- 18,750 -- 28,584
Secretary 1999 153,624 125,000 146,813 28,800 -- 22,075
</Table>
- ---------------
(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 2001 to a selected group of key
officers to assure the key officers are retained through June 2004. 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,
2001, the total number of restricted stock awards outstanding and related
fair market value were as follows: Mr. Smith -- 181,593 shares ($9,204,949);
Mr. Curling -- 81,000 shares ($4,105,890); Mr. Lee -- 20,500 shares
($1,039,145); and Mr. de Janes -- 11,000 shares ($557,590).
(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 for 1999 represent the final long-term incentive payment made by
ChoicePoint pursuant to Equifax long-term incentive plans.
(5) For 2001, these amounts include: for Mr. Smith, $20,206 in contributions
under the ChoicePoint Inc. 401(k) profit sharing plan, referred to as the
"401(k) Plan", $980,178 accrued under ChoicePoint's deferred compensation
plan, referred to as the "DCP", $17,574 in term life insurance premiums,
referred to as the "Life Premiums," and $3,734 for employer contributions
for the salaried employee health-related benefit plan, referred to as the
"Health Plan Contributions"; for Mr. Curling, $15,910 in contributions under
the 401(k) Plan, $302,385 accrued under the DCP, $10,440 in Life Premiums,
and $3,734 in Health Plan Contributions; for Mr. Lee, $24,626 in
contributions under the 401(k) Plan, $86,097 accrued under the DCP, and
$3,734 in Health Plan Contributions; for Mr. Wood,
10
$10,540 in contributions under the 401(k) Plan, $6,351 accrued under the DCP,
and $3,734 in Health Care Contributions; and for Mr. de Janes, $20,206 in
contributions under the 401(k) Plan, $10,610 under the DCP and $1,758 in Health
Plan 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, 2001.
OPTION GRANTS IN LAST FISCAL YEAR
<Table>
<Caption>
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) 2001 SHARE DATE 5%(3) 10%(3)
- ---- ------------- ------------ --------- ---------- ----------- ------------
Derek V. Smith............ 375,000 19.58 $34.6667 1/30/2011 $8,175,638 $20,718,672
Douglas C. Curling........ 187,500 9.79 34.6667 1/30/2011 4,087,819 10,359,336
David T. Lee.............. 52,500 2.74 34.6667 1/30/2011 1,144,589 2,900,614
Michael S. Wood........... 26,250 1.37 34.6667 1/30/2011 572,295 1,450,307
J. Michael de Janes....... 18,750 0.98 34.6667 1/30/2011 408,782 1,035,934
</Table>
- ---------------
(1) All options were granted pursuant to the stock incentive plan. Share amounts
have been adjusted to reflect the three-for-two stock split effective March
7, 2001. Except as described in footnote (2) 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 the following
number of shares of ChoicePoint common stock: 187,500 shares for Mr. Smith;
93,750 shares for Mr. Curling; 26,250 shares for Mr. Lee; 16,875 shares for
Mr. Wood; and 9,375 shares for Mr. de Janes, 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 based on
achieving certain performance criteria within three years of the grant 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.
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
11
value of outstanding unexercised options to purchase ChoicePoint common stock
held at December 31, 2001.
<Table>
<Caption>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS AT
SHARES END(#)(1) FISCAL YEAR-END(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#)(1) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------------- ---------- ----------- ------------- ----------- -------------
Derek V. Smith.............. 90,546 $3,902,899 1,501,935 704,998 $57,357,007 $15,989,841
Douglas C. Curling.......... 49,659 $2,186,764 391,047 347,248 $13,640,824 $ 7,805,340
David T. Lee................ 8,746 $ 357,248 257,240 133,873 $ 9,760,525 $ 3,316,082
Michael S. Wood............. 0 $ 0 13,125 39,374 $ 313,119 $ 733,714
J. Michael de Janes......... 0 $ 0 130,293 62,923 $ 5,119,308 $ 1,679,037
</Table>
- ---------------
(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, 2001, 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, 2001 was $50.69 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.
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. Smith (Chairman), Denny and Marcus. 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.
12
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 and executive committee use 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
13
responsibilities and performance over the past year, as well as an assessment of
how well the individual 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 2001, 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 2001 and July 2001 ChoicePoint granted options and
restricted stock, respectively, under the stock incentive plan to named officers
(including the chief executive officer) and a number of employees. In July 2001
ChoicePoint included named officers that received restricted stock (including
the chief executive officer) in a long-term performance-based cash incentive
plan.
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. Factors considered in evaluating Mr. Smith's
performance included exceeding the financial targets established by the board of
directors,
14
executing strategic direction, and increasing shareholder value. No specific
weighting was assigned to these factors in the evaluation process.
The compensation committee believes that the compensation program serves
its intended objectives. It believes the use of fair market value stock options
minimizes the effect on ChoicePoint 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.
<Table>
<Caption>
Management Compensation and Benefits Committee Executive Committee
KENNETH G. LANGONE (Chairman) DEREK V. SMITH (Chairman)
RON D. BARBARO JAMES M. DENNY
CHARLES G. BETTY BERNARD MARCUS
</Table>
March 15, 2002
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.
15
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, 2001 with management.
In connection with their audit of the Company's financial statements for
the year ended December 31, 2001, 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 amended
and approved on January 31, 2002.
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 2001.
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, 2001
for filing with the Securities and Exchange Commission. The committee and the
board have also approved, subject to shareholder ratification, the selection of
Deloitte & Touche LLP as the Company's independent auditors for the year ending
December 31, 2002.
On the recommendation of the committee, the board of directors approved a
corporate policy, which dictates that the Company's independent public
accountants will not perform non-audit services for the Company.
James M. Denny (Chairman)
Ron D. Barbaro
Charles I. Story
March 15, 2002
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.
16
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, 2001. The comparison assumes an original investment of $100
on August 8, 1997 and assumes the reinvestment of any dividends.
(PERFORMANCE GRAPH)
<Table>
<Caption>
- -------------------------------------------------------------------------------------------------------------------------
8 AUG-97 DEC-97 JUN-98 DEC-98 JUN-99 DEC-99 JUN-00 DEC-00 JUN-01 DEC-01
- -------------------------------------------------------------------------------------------------------------------------
ChoicePoint Inc. 100 136 145 184 192 236 254 375 360 434
S&P Midcap 400
Index 100 107 117 128 137 147 160 172 174 159
S&P Smallcap 600
Index 100 106 112 104 110 117 126 131 139 140
S&P Smallcap
Services (Data
Processing) Index 100 101 122 134 127 117 117 178 224 238
Russell 2000 100 106 111 103 113 125 129 122 130 124
</Table>
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.
17
RATIFICATION OF APPOINTMENT OF
CHOICEPOINT INDEPENDENT PUBLIC ACCOUNTANTS
GENERAL
The ChoicePoint board of directors has selected Deloitte & Touche LLP as
ChoicePoint's independent public accountants for the fiscal year ending December
31, 2002 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 Deloitte & Touche LLP will be present at the annual meeting,
will have an opportunity to make a statement if he or she desires 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 DELOITTE & TOUCHE LLP AS CHOICEPOINT'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2002.
CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as ChoicePoint's independent public accountants
for the fiscal year ended December 31, 2001. On March 21, 2002 ChoicePoint
decided to dismiss Arthur Andersen, effective as of March 29, 2002. Also, on
March 21, 2002, ChoicePoint appointed Deloitte & Touche LLP as its new
independent public accountants, effective as of March 22, 2002. The appointment
of Deloitte & Touche is subject to ratification by ChoicePoint's shareholders at
the annual meeting. The decision to dismiss Arthur Andersen and to retain
Deloitte & Touche was approved by ChoicePoint's board of directors upon the
recommendation of its audit committee.
A representative of Arthur Andersen will be present at the annual meeting,
will have an opportunity to make a statement if he or she desires to do so and
will be available to respond to appropriate questions.
The audit reports of Arthur Andersen on the consolidated financial
statements of ChoicePoint and subsidiaries as of and for the fiscal years ended
December 31, 2001 and 2000 did not contain any adverse opinion or disclaimer of
opinion, nor were they qualified or modified as to uncertainty, audit scope, or
accounting principles.
During ChoicePoint's two most recent fiscal years ended December 31, 2001,
and the subsequent interim period through March 21, 2002, there were no
disagreements between ChoicePoint and Arthur Andersen on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to Arthur Andersen's
satisfaction, would have caused them to make reference to the subject matter of
the disagreements in connection with their reports.
None of the reportable events described under Item 304(a)(1)(v) of
Regulation S-K promulgated by the Securities and Exchange Commission occurred
within ChoicePoint's two most recent fiscal years ended December 31, 2001 and
the subsequent interim period through March 21, 2002.
During ChoicePoint's two most recent fiscal years ended December 31, 2001,
and the subsequent interim period through March 21, 2002, ChoicePoint did not
consult with Deloitte & Touche regarding any of the matters or events set forth
in Item 304(a)(2)(i) and (ii) of Regulation S-K promulgated by the Securities
and Exchange Commission.
Deloitte & Touche audited the financial statements of DBT Online, Inc.
("DBT") and subsidiaries as of and for the fiscal year ended December 31, 1999.
ChoicePoint acquired DBT on May 16, 2000 in a transaction accounted for as a
pooling of interests. The DBT financial statements are included in the
consolidated financial statements of ChoicePoint and subsidiaries as of and for
the fiscal years ended December 31, 2001 and 2000 and reflect revenue of 15% of
the related consolidated total for the year
18
ended December 31, 1999. Deloitte & Touche provided its audit report relating to
the DBT financial statements to Arthur Andersen, and Arthur Andersen's opinion
on the consolidated financial statements of ChoicePoint and subsidiaries as of
for the fiscal years ended December 31, 2001 and 2000, as such opinion relates
to the amounts included for DBT and subsidiaries, is based solely on Deloitte &
Touche's report.
AUDIT FEES, FINANCIAL INFORMATION SYSTEM FEES AND OTHER FEES
During fiscal year 2001, ChoicePoint retained Arthur Andersen LLP to
provide services in the following categories and amounts:
<Table>
Audit Fees.................................................. $413,000
Financial Information Systems Design & Implementation
Fees...................................................... $ 0
Audit-Related Fees.......................................... $ 92,500*
Other Fees.................................................. $ 0
Total All Other Fees........................................ $ 92,500
</Table>
- ---------------
* Audit-related fees include benefit plan audits, agreed-upon procedures
reports, acquisitions, due diligence and accounting consultations.
The audit committee considered whether the provision of non-audit services
by the independent auditors is compatible with maintaining auditor independence.
Commencing in 2002, as a matter of corporate policy, the Company's independent
auditors will not perform non-audit services.
19
OTHER MATTERS
CHOICEPOINT SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the proxy statement for
ChoicePoint's 2003 annual meeting of shareholders must be received by
ChoicePoint at its principal executive offices on or before November 22, 2002.
For a shareholder proposal to be properly brought before ChoicePoint's 2003
annual meeting of shareholders (other than a proposal to be considered for
inclusion in the proxy statement for ChoicePoint's 2003 annual meeting of
shareholders), it must be received by ChoicePoint at its principal executive
offices on or before November 22, 2002. 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 2003 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
5, 2003.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 2001 Mr. Marcus served as Chairman of the Board of The Home Depot,
Inc. and Ms. Hill and Mr. Langone both served as directors of The Home Depot,
Inc. During 2001, the Company performed pre-employment background and drug
testing services for The Home Depot, Inc. totaling approximately $4 million.
These services were the result of arm's length negotiations conducted in the
ordinary course of business.
Mr. Murray served as Chairman and Chief Executive Officer of FleetBoston
Financial Corporation in 2001. During 2001, the Company entered into a financing
arrangement for up to $52 million to finance the expansion of its headquarters
facilities, which will be constructed during 2002. FleetBoston Financial
Corporation participated in $15 million of the $52 million financing arrangement
and received $22,500 in fees for the transaction. In addition, the Company
provided public record information services in 2001 for FleetBoston Financial
Corporation for approximately $92,700. The financing arrangement and the
services performed were the result of arm's length negotiations conducted in the
ordinary course of business.
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 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 2001, except for Messrs. Langone and Marcus, who each inadvertently
under-reported 3,748 shares and 5,062 shares, respectively. The share amounts
were corrected on subsequent filings.
ANNUAL REPORT TO SHAREHOLDERS/ANNUAL REPORT ON FORM 10-K
The Annual Report to Shareholders of ChoicePoint Inc. for the year ended
December 31, 2001, 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
20
SHAREHOLDER WHO MAKES WRITTEN REQUEST TO THE OFFICE OF THE CORPORATE SECRETARY,
CHOICEPOINT INC., 1000 ALDERMAN DRIVE, ALPHARETTA, GEORGIA 30005.
OTHER MATTERS AT THE ANNUAL MEETING
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 James
J. MICHAEL DE JANES
Corporate Secretary
Alpharetta, Georgia
March 22, 2002
21
APPENDIX A
CHOICEPOINT INC.
The undersigned hereby appoints Derek V. Smith, Douglas C. Curling, and J.
Michael de Janes 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 April 25, 2002 at 11:00 a.m. local time, and at any
adjournment or postponement thereof, for the following purposes:
1. Election of Directors
<Table>
[ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below). to vote for all nominees listed below.
</Table>
Dr. John J. Hamre; Bernard Marcus; Terrence Murray
(INSTRUCTION: To withhold authority to vote for any individual nominee(s), write
the name(s) of such nominee(s) immediately below.)
- --------------------------------------------------------------------------------
2. Proposal to ratify the appointment of Deloitte & Touche LLP as
independent public accountants for ChoicePoint for the year ending December 31,
2002.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued on reverse -- please complete other side)
(continued from other side)
3. 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: , 2002
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Signature
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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.